On Tuesday night, without much surprise, Apple announced its new laptop lineup proudly running its own Apple Silicon processors. The new M1 chips are faster, more powerful, use less electricity, and everything else promised in an Apple launch event.
The M1 processors are based on the mobile chips that power the iPhone and iPad ranges. For a long time, it’s been unfolding before our eyes that mobile is eating the world. This industry adage describes how the new technologies (wireless broadband, portability, more powerful smartphones and apps) have usurped the older, traditional ones (desktop computers, dial-up and ADSL).
Spawned by the desktop era of Intel chips powering Windows computers, mobile is now dominated by Qualcomm chips, based on the mobile ARM architecture, and Google’s Android software. Microsoft canned its hardware ambitions, even after buying Nokia, and has focused on its cloud, gaming and apps businesses. And Apple has ditched Intel, which is itself struggling to compete in the semiconductor space.
The shock announcement in June that Apple was abandoning Intel’s chips sent the chipmaker’s shares plummeting. This was exacerbated by Intel’s own revelations that it might outsource manufacturing to third-party factories. Intel is a largely spent force.
But it wasn’t so when Steve Jobs returned as CEO in 1998. One of the most strategic things he did was switch to Intel in 2005.
It was a masterstroke. Apple’s biggest problem back then was a lack of software programs. Processors are the computer’s brains and have a particular architecture.
The Intel chips Windows computers used in the early 2000s were very different from those used by Apple. They proved a barrier to entry for developers, as Apple’s 5% of global market share didn’t justify the development. But Jobs’s switch to Intel chips reduced developers’ workload to convert their software to run on Mac operating systems.
It quickly ramped up the programs available for Macs and gave a new lease of life to the original product line that made Apple what it is today.
Meanwhile, poor Intel. Rarely are the kings of one era the kings of the next.
But Apple has expertly managed its transitions between the power players of these eras. And now, off the back of the device that it unveiled in 2007 and that has propelled its profits and share surges, it is reinventing that PC again. This time with its own chips.
There are immediate advantages for Apple. The most pressing, which caused the break-up of the 15-year Intel relationship, was the slow pace of Intel’s multiyear chip production process.
Apple has been churning out a new processor every year since it began using its own silicon. Now it can bring that pace to its original computer range, starting with the new MacBook Air, Pro and Mac Mini announced this week.
Additionally, and in a cruel ironic twist, it means an instant, and massive, installed base of available apps, because everything that can run on an iPhone and the new iPad Pros will now work on the new M1-running Macs and the new Big Sur operating system.
It is a clever consolidation of the various ranges of technology Apple uses, which all tie very neatly back into its expanded services offerings. These include the App Store, iTunes, the new Arcade gaming subscription services and Apple TV, as well as a combination using Apple One group subscription. Such offerings are pushing up this service revenue, which is growing at a healthy click.
By offering compelling content, apps and gaming, Apple is trying to keep its users consuming inside its walled garden. In Apple’s case, this garden comes with its own hardware. It is ultimately a further sign that mobile is eating the world. Perhaps, even, ate the world. BM/DM