No Stopping This Apple Cart: New Macs to Extend Chip Dominance

  • Apple’s new Mac will upend the Intel-dominated PC market and open up new opportunities, while the PC will be the next battleground for existing smartphone application processor (AP) vendors.
  • Apple is now a step ahead, as it controls both the operating system and the hardware, as well as the electronics manufacturing services (EMS) environment. Others are unlikely to follow suit.
  • Apple’s service revenue has been steadily growing since 2016 and accounted for 19% of the total revenue in 2020. The new Macs would also help to boost sales.
  • Rather than ARM’s imminent mass adoption in PCs, customized RISC SoCs’ influence on PC architectures will grow.

On November 10, 2020, Apple introduced three new Mac devices — MacBook Air, MacBook Pro and Mac Mini. On April 20, 2021, Apple debuted the new iMac. All these are powered by the Apple M1 SoC. Apple has mastered both its software (OS and APP) and hardware system architectures, thanks to its years of experience designing customized RISC SoCs for its smartphones and tablets. Apple would like to extend this advantage to its future PC chips. As a result, Apple’s first high-performance SoC and architecture for the entry-level Mac has demonstrated its dominance over rival devices in its class.

Unlike Intel’s general-purpose processors which can be used in different models/brands of notebooks, Apple’s first SoC for Macs, the M1, is an ASIC (application-specific integrated circuit) to be only used in Apple-designed PCs. However, it can satisfy more than 80% of the requirement for entry-level PCs. In addition, Apple’s customized high-performance core (Firestorm) has many advantages over other ARM SoCs and x86 CPUs, such as high-density L1-L3 cache, eight-bit decoder, eight transmit (Dispatch) and 630 ROB.

counterpoint apple m1 ipad pro soc
Source – Apple

Apple has added many dedicated cores which have better computing performance and less power consumption. Developers can enjoy both the benefits as long as they design their apps based on the APIs provided by Apple. The integration of these cores in a single SoC results in significant cost savings and provides additional features. These investments are expensive but provide solid and differentiated functionalities that are difficult for competitors to deal with.

 Apple’s motivation for releasing new Macs

Apple intends to build an updated PC ecosystem based on the popularity of Apple chips in the iPhone and iPad. Furthermore, the new chips have the potential to unify the architecture of the iPhone and Mac, resulting in a unified ecosystem that Apple can completely control. M1 Macs will run iOS (iPhone and iPad) apps, with Apple’s Catalyst project enabling iOS and macOS developers to share code. Some apps are likely to be incompatible with the new framework due to the switch from Intel processors to Apple Silicon. More native iOS apps are expected to move to the macOS over time.

counterpoint apple ios apps
Source – Apple

Advantage of new Macs over Intel CPU-based counterparts

  • Power saving/always on/fast booting speed: The latest M1 Macs’ architecture is similar to the iPhones’. In the MacBook Air, Apple has replaced the fan with a passive cooler. Active cooling (fan) is present in the MacBook Pro and iMac, but it is seldom used, minimizing the amount of energy lost. ‘Always on’ devices will go from standby to active mode in a matter of seconds.
  • Running iOS apps on macOS: Developers can easily port apps from the iOS platform to the Mac using Mac Catalyst. ‘Continuity’ allows iOS and macOS devices to communicate easily and seamlessly for a better user experience.
  • Enhanced AI capability: The iOS 11, launched in 2017, included machine-learning APIs and Core ML. Core ML turns existing server-trained models into Core ML models. A Core ML model that has been optimized will run many times faster.
  • Faster data access speeds in storage: The storage design of the M1 Mac is identical to that of the iPhone. Apple has used the Non-Volatile Memory express (NVMe) communications protocol since the iPhone 6s, which provides considerably faster storage than its rivals. OSX (iOS, macOS) can also aid in data fragmentation reduction and access speed improvements.
counterpoint apple mac apps
Source – Apple

Suitable use cases for M1 Macs

  • Basic usage and office applications: Outlook, Word, Excel, PowerPoint and OneNote now can all run natively on the M1 Mac to take advantage of performance improvements. M1-based Excel VBA runs three to four times faster than on x86 CPUs, making it faster than on Intel processor-based Macs, according to our measurements.
  • Content creators: Most video/photo editing applications for Mac can support M1 Mac natively, or at the very least via Rosetta2. Adobe Photoshop and Lightroom have seen significant efficiency, power, and memory consumption improvements.
  • Programmers: The M1 is designed to work with Xcode to create macOS or iOS apps. For this reason, many third-party libraries must be recompiled. The M1 is the new currency.

Benefits of new Macs

Apple moved to new Mx SoCs for a variety of reasons. Cost was one of them but not the most significant. Moving to a system architecture takes time, but there are several benefits in terms of hidden costs:

  • Increase in the quantity and consistency of Mac Apps: Apple would make it possible for iOS and macOS to share tools and architecture, allowing iOS developers to work on macOS as well. The aim is to make applications run smoothly on both platforms. The new framework will also pass the iPhone and iPad user experience.
  • Reduction in the number of chips outsourced: Apple’s use of in-house SoCs has allowed the company to build an ecosystem that is not dependent on chip partners such as Intel and AMD. It also means Apple will be able to better handle software-hardware vulnerabilities.
  • Increase in service revenue: Apple’s service revenue has grown rapidly over the past five years, with a five-year CAGR of 21.8%. Apple’s continuous introduction of new hardware helps increase the stickiness of its products, which in turn raises service revenue. Apple’s censorship also helps maintain the platform’s security, and will encourage more developers to sell their apps in Apple’s marketplace.

Future Apple Silicon and Macs

We believe the M1 is seen by Apple as the Apple Silicon for entry-level Macs. We expect Apple to launch an Apple Silicon upgrade for the MacBook Pro in Q4 2021 to differentiate it from the MacBook Air and the next Apple Silicon in 2021 for the iMac Pro. The new Apple Silicon is likely to use TSMC’s 4nm process for cost reduction and efficiency improvement. The primary goal of the Apple Silicon for MacBook Air and MacBook Pro would be to have a balance between performance and power consumption. The highly integrated PCB and the laptop-grade SoC, which is smaller than Intel’s CPU, can reserve more space for battery packs. However, Apple Silicon for desktop would need high-performance CPU cores, plus the improved NPUs and GPUs. Conversely, in situations where battery life and chip size are not major concerns (like in a desktop Mac), the chip’s performance can be maximized.

A detailed report, ‘Apple M1 Macs Review’, is available on our website for paying subscribers.

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Brady Wang has more than 20 years working experience in high-technology companies from semiconductor manufacturing to market intelligence, and strategy advisory. Brady’s major coverage in Counterpoint is semiconductors. Prior to joining Counterpoint, Brady Wang worked for Gartner for 11 years. He started his career at TSMC as an engineer for 6 years.

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