The problem IBM is facing is that it can't spread the R&D costs for a new Power chip over the same volume of sales as Intel is able to for the x86 architecture.
The obvious solution would have been to buy Apple, and license the 680x0 architecture from Freescale, and put together PowerPC Macintoshes that shipped with chips that seamlessly ran both PowerPC and 68020/68882 code at native speed, and which shipped with both OS X and Power PC and 680x0 editions of OS 9, all running concurrently.
Either in a dual-boot configuration that also includes a PowerPC port of OS/2, or with the base operating system allowing either the OS X user interface (with OS 9 present) or Presentation Manager to be started from an OS/2 text prompt.
Including, of course, quality keyboards made by Unicomp.
And, unlike the Macintosh, the hardware platform would be open, like the IBM PC. So, when other manufacturers make peripherals for the new standard in computing, the choice of peripherals and software would be initially comparable to, and hopefully shortly greater than, that for the obsolete Windows/Intel platform that IBM abandoned.
Of course, that's a nice trick if you can pull it off. The IBM PC did not succeed because of the IBM name on it - it succeeded because it was the first 16-bit system that wasn't much more expensive than a serious business 8-bit CP/M system. The IBM name helped to give reason to believe that software would be as available for it as for CP/M (and, hey, in one standardized disk format)... but that's all.
There is no way that is obvious to me that IBM could today make a desktop PowerPC-based system that was so obviously superior to a typical Wintel PC as to persuade people to switch over. This is unfortunate, because that is the trick that IBM needs to pull off. Otherwise, the PowerPC could end up forgotten before the Itanium.