It's official.

Not only is Apple switching its chip supply contract from IBM to Intel, but it is moving to Intel processors in the bargain.

In making the announcement this morning, Steve Jobs said he didn't see how he could continue making great products beyond next year "based on the Power roadmap."

Right after his speech he had a cagey interview with CNBC's Ron Insana. "It’s not as dramatic as you’re characterizing it," he insisted.

"This is going to be a gradual transition. Hopefully a year from today we’ll have Intel-based Macs in the market. It’s going to be a two-year transition.

"As we look into the future, where we want to go is different (from IBM's product roadmap). A year or two in the future Intel’s processor roadmap aligns with where we want to go.

"I think this will get us where we want to be a year or two down the road." Jobs refused repeated requests by Insana to explain what he meant by that. (Jobs is also shaving even more closely than this picture shows. He's down to tiny stubble around a a still-brownish moustache. Hey, Steve, I'm 50 too.)

What I think he means, simply, is video.

Beyond this, most of what I wrote last week holds. This deal is not material to Intel, which continues to face loss of major market share to AMD among Windows and Linux users.

But there are also vital lessons here for followers of Moores Law, lessons I need to impart.

• Moore's Second Law bites. -- When development and manufacturing costs bite even IBM in the back end, it bites big-time.
• It's All About Patents and Copyright -- Given the heat problems that come up when you move from 90 nm lines to 65 nm, the development horizon is now based in on patents and copyright. Essentially hardware is software.
• DRMs are a chip property -- One important bit of software certain to go into chips is Digital Rights Management (DRM). Apple will now depend on Intel's DRM, DTCP-IP, This will have huge impacts up and down the line.
• Pressure on Intel Marketing -- Intel Inside, the biggest "ingredient brand" in technology, is now under big-time pressure to deliver. Apple lost market share when it switched to the PowerPC from Motorola. Jobs was careful to note in his interview with Insana that the iPod channel is now fully-stocked, something that didn't used to happen. He expects it to happen with Intel Inside.

AP's pre-launch story on this, by Greg Sandoval and Matt Fordahl, emphasized Apple's "miniscule" market share and called this a "risky move." That's pretty heavy opinion for an AP news lede. But the risk in this case is shared by both sides, which may be why Jobs finally signed on the line that was dotted.

Intel is facing tough times, thanks to AMD. Apple is facing tough times, thanks to Dell and Microsoft. Sometimes tough times make good partnerships.

Time for talk is over. It's time for Intel to deliver. The pressure now shifts to Paul Otellini (right).

Here's hoping he's up to it.