Arms Rise

Analyzing the implications of apple’s latest innovation on its competition
Technology
Author

Ashwin Thillai

Published

March 20, 2022

This article was originally published in my blog post: Quant Reserve at blogger.com. Its been roughly two years since I wrote this and its interesting to see how my predictions matched (or missed the target by miles) with Apple’s product decisions. I did not cover the environmental benefits to having one master chip that could power our phone and computer. Nevertheless I present my thoughts on Apple silicon from the summer of 2020


Apple recently announced plans to transition its MAC line-up of computer products to a system-on-a-chip silicon (loosely termed as Apple Silicon) [1]. The company displayed this in-house developed chips during an online developers conference called WWDC. Apple’s MAC line-up of laptops and desktop computers are currently using products from external vendor like Intel and NVIDIA for CPU and GPU needs.

Apple’s reasoning

  1. The transition will help establish a common architecture across all Apple products and make it easier for developers
  2. Using Apple’s own SoCs could give Mac industry leading performance per watt and higher performance GPUs Apple’s promise
  3. Convert existing apps to run on Apple silicon with ease.
  4. Developers can enable their iOS and iPadOS apps to work on the Mac without any modifications.
  5. Apple wants to ship its first Mac with Apple silicon by end of 2020 and a complete transition in two year transition period


The technology

Apple silicon is a common name for its ARM based System-on-a-Chip (SoC) and system in package processor. This silicon has more advantages over the regular Intel x86 processors which are currently used in most personal computers. Apple’s proposed chip will consume lesser energy and has a smaller footprint. These SoCs are basically multiple components integrated into a single chip [2]. Advanced features like graphics card, internet support, wireless connections, GPS, dedicated security and machine learning chips will be packed into one single silicon chip. Apple has been using this technology in its iPhone and iPad for over a decade and these chips usually outperform the best intel processors. Thus Apple’s SoC silicon can provide deeper integration of hardware and software functionalities.


Predicting Apple Mac’s product strategy going forward

Apple will probably introduce touchscreen laptops in the future with thinner and sleek looking hardware. These products may also have improved cameras, fan less design with a greater emphasize on performance. But I don’t believe Apple will blur the line between its iPad and Mac design any soon, making sure not to cannibalize its iPad sale. I see no logic in reducing the number of apple products each of its customer can own. May be down the road (in three years or so) we could see more powerful iPad Pro like Macs or a laptop computer that mimics the design of existing two-in-one laptop offerings from Windows vendors.


Why will this affect Microsoft vendors or its Windows ecosystem?

Touchscreen laptops are nothing new to Microsoft Windows. In fact they were the pioneers in this product. There is no trouble for Windows or its vendors from Mac’s new design or perceived touchscreen features. It’s the above mentioned apple silicon that could be a make or break for the Windows. Microsoft had already released an ARM based version of Windows and like Apple it is also working with its developer community to extend support for the new ARM based Windows OS. So what is the disruption we are talking about? Let’s see,

  1. Opportunities for PC vendors: PC vendors like Lenovo, Dell, HP etc., finally have an opportunity to make more unique products if they could start designing in-house SoC chips themselves. This gives them a way to differentiate themselves from other PC makers. But unlike Apple, Microsoft will find it difficult to integrate its software for all its vendor specific needs. Though its nothing new for Microsoft or its vendors, this might delay the product development and create openings for other type of disruptions.
  2. A third ecosystem: Chrome OS is fast catching up as a potential alternative to Windows in low cost PC market. By transitioning to its own silicon, Apple may have unintentionally opened up potential competitors for Microsoft’s share in PC market. In 2007, Microsoft and Nokia’s delay in recognizing market shift towards touchscreen phones gave Google an opening and the rest is history [4]. The key takeaway is that there is a huge potential for catering “non-apple” users with powerful and compact computer machines that can genuinely rival Apple’s future Macs. Google with its android app ecosystem can slowly but steadily give Microsoft Windows tough competition in PC market.

Most PC users (laptops, notebooks, workstations) in the world today are non-apple users and its very likely they already own an android powered smartphone. This is an incredible opportunity for Google. Products like Samsung Dex [4] have shown that Android phones can be a great value proposition for users moderate needs. Google may not have the advantage of legacy software products, but it can very well entice users with light usage needs and users in developing economies thereby attracting developers to consider its platform.

Also companies like Qualcomm, Samsung, Hawaii (or any other smartphone maker with deep pockets, Intel including) who competes with Apple in the smartphone business may likely be the next source of disruption. They can come up with radical new form factors and hybrid Phone-PC products. These companies can afford to be radical in their approach to product conceptions as they have nothing but to gain in the PC of market share.


Why should Windows PC makers transition to ARM in the first place?

Two reasons for moving to ARM (provided Apple’s transition succeeds!):

  1. Maintain relevance: To keep up with the onslaught from Apple and a probable third ecosystem, Windows and it vendors may be forced to move to ARM based processor architecture to maintain relevance among PC users.
  2. Developers aren’t going to maintain multiple versions of their software. Its not sustainable to expect developers to support multiple processor version Windows ARM, Windows x86.

To conclude, these are exciting times. Apple’s ARM adaptation will test competition’s readiness to market shifts, especially Microsoft. A third ecosystem is an eventuality and I believe Microsoft has been getting ready for this future well before we realized it. Its been strategically moving away from Windows development [5] and focusing on Cloud, Apps, AI, Experiences & Devices. Users will only benefit from these disruptions and that’s nothing but awesome!


Reference:

  1. Apple announced Mac transition to Apple silicon: https://anysilicon.com/what-is-a-system-on-chip-soc/
  2. Why SoC: https://anysilicon.com/what-is-a-system-on-chip-soc/
  3. Market place tech blog: https://www.marketplace.org/2017/10/16/how-apple-and-android-took-over-smartphone-market/
  4. Samsung Dex: https://www.samsung.com/us/explore/dex/
  5. Satya Nadella email to employees: Embracing our future https://news.microsoft.com/2018/03/29/satya-nadella-email-to-employees-embracing-our-future-intelligent-cloud-and-intelligent-edge/