To me this description sounds like a specialist high performance computing company rather than a consumer technology company. That may be a perfectly reasonable market to be in, but is that type of company worth $200bn? I'm not sure.
Roughly 40% of their revenue is consumer chips where, apart from some games optimisation, they are no longer standing out from the crowd, and the leader is arguably Apple, with AMD doing well. The next ~30% of their business is servers, where there may be a significant number of HPC clients, but the bulk of this is again likely to be VMs running non-Intel specific software, and this market is starting to realise that Intel is nothing special here.
Looking at their revenue breakdown, I struggle to put more than 20% into the things that you mention they are great at. Should they focus on this? It would lose them much of their market cap if they did.
>Roughly 40% of their revenue is consumer chips where, apart from some games optimisation, they are no longer standing out from the crowd, and the leader is arguably Apple, with AMD doing well.
You lost me at Apple. Apple owns around 15% of the PC market space and almost the entirety of that is Intel-based systems. Outside of HN, nobody cares about the M1 chip, it isn't a selling point to my mom or her friends. If someone at the Apple store recommends it they might buy it instead of an intel-based system but it definitely isn't something they're seeking out.
The only threat Intel has right now in the consumer space is AMD, and it's a very real threat. AMD won both Sony and Microsoft console designs, and the mobile Ryzen 5000 chips released at CES look to have enough OEM design wins to put a serious hurt on Intel in 2021.
Even if Apple goes 100% M1, there's the other 85% of the market that Intel is likely far more concerned about.
I get your point, but I think the M1 is more significant as proof of what is possible than because I think everyone will buy a Mac.
I can absolutely see Qualcomm offering laptop chips off the back of the M1's success. They may not be as good, but they might be much cheaper. I can also see Microsoft pushing Windows on ARM harder, and rolling out their own chips at some point.
Also once the market gets "used to" multi-architecture software (again), I think we'll see a renaissance of chip design as many more players crop up, because of the lower barrier to entry.
Maybe. Apple has solved the chicken and egg problem regarding software compatibility by forcing everyone to move on to ARM in the near future. Microsoft will not abandon x64 though, so there are far less incentives to port things. Also Microsoft cares far more about compatibility (e.g. 32-bit software). That means means a lot of things will run under a Rosetta 2 like system (probably less efficient if you need to support 32-bit as well). If you add the fact that Qualcomm is unlikely to match Apple in performance, the resulting product might not be very appealing compared to a classic x64 system.
> An ARM transition isn't a fait accompli just because Apple introduced M1 at the lower end of the Mac lineup. There's a huge lump of inertia there.
If you're just referring to Apple's future, the endgame is already a done deal. They don't roll back something this fundamental once it's public.
Their last Intel computers will be manufactured and sold within 3 years; I'd wager a month's salary on that if I had it lying around.
If they can't make it perform at the top level like AMD, which seems unlikely but obviously it's too soon to tell, they'll make up for it in other ways or simply live with the performance hit until they can.
Apple doesn't believe in inertia. Their partners and customers can either make the transition or get left behind. Microsoft's business model depends on making enterprises happy; Apple doesn't care.
> Apple has solved the chicken and egg problem regarding software compatibility by forcing everyone to move on to ARM in the near future.
I don't see "everyone" moving to ARM in the near future. I don't even see myself buying an Apple Silicon machine in the near future. I don't see corporate users going to ARM in the near future, and I certainly don't see government users going to ARM in the near future.
Even if the Mac lineup goes exclusively to ARM in two years as planned, I'd be shocked if Dell, Lenovo, and other manufacturers follow suit. Lenovo just announced that the fully specced Thinkpad X1 Carbon Gen 9 will run on an Intel 11th Gen CPU. They're not even going to AMD, let alone ARM.
Apple switched to Intel from PowerPC for a reason. Apart from raw performance at that time, Intel's draw was practical: dual boot, software compatibility, and so forth. Now, Apple is leaving Intel because the lithography has fallen behind, the chips run hot, Intel's share of the profit eats into Apple's profit margins, and x86 impedes their dream of iOS/MacOS app singularity. However, the masses are not clamoring for a move away from x86, so there's no pent-up demand to be had with a switch to ARM.
Let's assume that Apple follows through on its two-year plan to offer an exclusively ARM Mac lineup. What's the bear case?
If Apple is the only player to move to ARM, and the market doesn't follow, it could end up as the first existential setback that the Mac has faced in a long time. In my view, Apple has been out of touch with Mac users for a while now. When they eliminated MagSafe for Macbooks, users shrugged. When they introduced TouchBar, users stared blankly. When they removed all but one format of accessory port, users groaned. When they introduced the butterfly keyboard that put thinness above function, users complained. Eventually if you make enough weird moves, you start to alienate customers.
There are bound to be gaps in the respective software libraries of x86 and ARM, and that is going to matter to regular folks and application-specific power users alike. Apple itself is having problems getting Big Sur to run properly on all the machines it supports. "Supported" 2013 and 2014 machines are getting bricked, and even brand-new machines are experiencing bugs with basic functions like managing external displays. I can attest that Intel-based 2020 four-port MBP13s were still shipping with Catalina at the end of December (I don't know if that has changed in the past two weeks). If the OS itself is having problems, that isn't exactly a good sign for the applications that run atop it.
Apple has gotten used to saying "whatever, I do what I want," and getting its way. Remember 3.5mm audio ports on flagship mobile phones? Me neither. But what happens if complacency about that kind of market power carries Apple a bridge too far? They will have been so used to success that they will miss the early signs of market distaste, and may be unable to adapt mid-flight. There's a certain sense of bravado and self-fulfilling prophecy in saying that -- come what may -- the Mac is moving to Apple Silicon, but it'd be smarter to eschew the bravado and see how things go with the M1 before announcing plans to transition the entire lineup.
So to answer your question, I was talking about ARM vs x86 in general. A transition from x86 to ARM isn't something that one firm with minority market share can force unilaterally. However, I also think the Apple Silicon two-year timeline is overly ambitious and that Apple risks losing market share as a result. If that happens, the stock will suffer drastically, and there will be a reshaping of Apple's C-suite.
I agree Apple's in a tough spot, facing multiple risks with the transition, but if they waffle they become Microsoft, and they can't afford that.
If they express any interest in keeping Intel around, the transition is at great risk, because software developers can just trust that Rosetta will continue to make their software work, and customers will keep buying Intel machines that Apple will have to support for years to come.
And I believe that was what the parent was saying:
> Apple has solved the chicken and egg problem regarding software compatibility by forcing everyone to move on to ARM in the near future.
Clearly there's no way that every computer user is going to be moving to ARM, but every new macOS user will, so the sentence only makes sense in the narrow scope of Apple customers.
I certainly don't claim to know what the author meant when those words were written. What I know is that Apple serves and represents an influential minority of the personal computing market, other manufacturers are unveiling new machines that run on Intel, and even Apple hasn't put out a single high-end machine with ARM. I personally haven't been forced onto ARM; I bought an Intel Macbook Pro after the M1 release.
You're absolutely right that the challenge is to get developers to build software that doesn't just depend on Rosetta 2. But at present, a developer has to think about users on x86 Windows, x86 MacOS, ARM MacOS, and Linux (ignoring ARM64 Windows and a few other OSes). The ARM MacOS devices at present are lower-end -- 2 TB3 ports, etc -- and less likely to be used by the customer cohorts that are the most profitable for software developers (except maybe the big-ticket names like Office, Photoshop, etc). I run x86 Mac and I still can't run all the APIs and software that I want to use. M1 would be totally untenable for me. For example, I use a brokerage whose software runs on Windows, but they have a cloud version that runs on Citrix Receiver. That used to work for me on Mojave, but I haven't been able to get it running on Catalina.
I don't think Apple has solved the chicken-and-egg problem, not even within the Apple landscape. If anything, Apple has made the problem more pressing and relevant by introducing a two-year cliff.
As Ludacris says, "tomorrow's not promised today." It's unwise to treat every large market segment as massless. Forced market shifts and state changes can be a neat trick when Apple pulls them off, but eventually they'll hit an immovable object. A two-year timeframe is an eternity for PCs and semiconductors; moreover, demand is astronomical at present, but the term structure of that demand is anything but predictable right now.
Apple is going to be supporting x86 Mac well past that two-year timeline, so even if ARM Mac takes over on schedule, developers are going to have to build for both setups for some time to come. I don't think that's particularly prohibitive if you set up your abstraction layers and work on one shared core before tailoring it to fit your supported platforms, but it's definitely added work and more planning.
Yes, I meant everyone in the Apple ecosystem: developers and users alike. Some will be left behind, most will transition, and I'm sure Apple is hoping some premium Windows/Linux users will be converted by the incredible efficiency.
True, but Apple has been the harbinger for a LARGE number of advances in consumer computing adoption. Mouse/windows desktop interface? Apple. Font libraries? Apple. USB? Apple. Touch interfaces? Apple. Modern smartphone? Apple.
The list goes on and on. M1 could be such a harbinger. Who knows if anyone else can compete, and likely Apple will be in the pole position for some time, but Apple has shown everyone it can be done.
I'm not so sure, since a lot of software is somewhat cross-platform now anyway. You need to port the JVM, .NET, and Chromium (for electron), and you've effectively ported a large part of the desktop application space already.
Web applications are portable if you have a browser
Many modern languages that compile to native, like Rust, trivially recompile for multiple target architectures.
Others are dynamic and don't need recompilation.
Of course some major software is written in non-portable C and C++. But the question is whether some emulation isn't acceptable here.
I know, I'm just thinking in today's day and age an architecture change isn't that hard anymore. We're already paying for all these abstractions, why not use them.
I don't think that there is a high performance JVM implementation for RISC-V. A vendor would have to do a lot more work if they picked an architecture other than AArch64.
You misunderstand the point of the M1 out of Apple, and for that matter the graviton2 instances out of AWS. What was demonstrated in the marketplace is that the biggest tech companies are now able to develop in-house processors that are more cost efficient and more performant. These processors are based on ARM and have minimal overhead licensing costs, as compared to buying Intel or AMD chips for their vast fleets / products.
If AWS and Apple can do it, soon other very large companies will, but in a few years, even OEMs will be able to develop their own chips. The market for high end gaming is unlikely to be touched, but the vast consumer market is going to be eaten by custom made ARM-based chips.
So in a world where processor design becomes a commodity, what does that mean for Intel and AMD? And what does that mean for the overall datacenter, consumer markets?
> So in a world where processor design becomes a commodity, what does that mean for Intel and AMD? And what does that mean for the overall datacenter, consumer markets?
Processor design is already a commodity, and has been for many years. Any company with the cash can buy a license to the ARM64 instruction set and the reference core design, and have someone like TSMC or Samsung manufacture it.
These designs haven't taken over desktop market from x86 yet because those designs simply weren't performance-competitive with what AMD and Intel are pumping out, and it's not clear that that'll change anytime in the foreseeable future.
Apple knocked it out of the park with the M1, but they've been kicking ass for years, including their competition in the ARM processor space. Just because Apple's processors happened to use an ARM instruction set, doesn't imply that an ARM revolution is upon us.
For who? My mom uses her laptop at home 99% of the time, if the battery gets low she plugs it in. She needs a battery that will last 1-2 hours for the 3 times a year she flies.
You can find a place to plug in at basically any coffee shop or library you go to. My mom isn't spending 10 hours in a datacenter, so it doesn't really matter to her if the battery life is 3 hours or 12. For the average consumer, battery life has just been another stat on the spec sheet for years now.
> For the average consumer, battery life has just been another stat on the spec sheet for years now.
I'm not sure I agree with this. I think if you asked someone whether battery life was a priority, they might say no. And if you asked them to rank tech specs I'm not sure it would necessarily be that high either. But the experience of using a laptop with a noticeably better battery is, for me, quite likely to be one of those things that you didn't know you were missing, even if you just charge it every now and then.
Even if your mom doesn't care about battery life, she will probably buy a product that is also sold to buyers who do care about battery life, and if the product can meet those buyer's needs with a smaller battery, then your mom's laptop will be lighter.
So, does your mom also not care about the weight of her laptop?
The Macbook air with intel CPU weighs 2.75 lbs, the Macbook air with M1 weighs 2.8 lbs. The macbook pro is 3.0 vs 3.1 lbs.
The weight is a non-factor. Quite frankly until you start cracking 5lbs nobody even cares in my experience. Apple's maniacal focus on making laptops skinnier and lighter has done a disservice to the entire product line, which they seemingly acknowledged with the 16" Pro.
Apple had the option of making the M1 Air lighter (by choosing a smaller battery) but decided instead to greatly increase battery life. The point remains that Apple has choices that vendors of laptops reliant on Intel CPUs do not have, which might end up eating into Intel's market share.
Strongly disagree. I'm writing this on a 12" MacBook with a partly broken screen - by far my favourite machine (I have a 2020 MacBook Pro too). I'm not alone too.
I expect we'll see an M series MacBook again but this time it won't be underpowered.
the m1 isn’t competing on many of the same axes as an intel or amd cpu, because it’s necessarily packaged inside of an entire computer built around it. that computer is a mac, which might be different from the purchaser’s current os so they decide not to switch, or they already bought software for windows and want to use it there, or they’re married to the microsoft ecosystem, etc.
Seriously, I predict we will see Apple successfully attack the sub $1000 laptop market within two years. They sell the iPhone SE with an A13 for $399 so they could easily do so now they no longer have the 'Intel tax'. And the products will be a lot better than the Windows equivalents.
Most home users might use Office and that's about it. The allure of the Apple ecosystem will be strong especially for iPhone users.
Apple’s bread and butter, as far as Macs go, is the MacBook Air. And by all accounts, they sell a lot of those, and will presumably sell even more, with better margins, now that they’ve gone ARM.
Do they really want to undercut that with a cheaper laptop? I suppose it’s possible, if the volume/margins works out, but I’d bet they just keep plugging along with $999–$1500 13-inch laptops.
All fair points but I think that with higher margins it tips the balance towards market share growth. Key issues are 1) can they make an acceptable margin on a good $800 laptop and 2) can they genuinely significantly grow market share rather than lowering average selling price - i.e. can they maintain distinction between $800 and $1000 products. Given what we've seen them do on iPhone and iPad I bet then answer is yes to both of these.
Bear in mind too that after a generation or two they can put the last gen M chips in cheaper products.
I think there's an economic principle here (and I don't know the sign), but this is all assuming a frictionless vacuum - in practice, Apple cannot sell 25% more M1 Macs if they lower their price to $800, or whatever, since their marginal costs rise in that case (because TSMC is totally booked!).
I'm not really sure to be honest. We've moved on from laptops that you can't watch movie on without charging few years ago. I don't really care if my laptop works for 10 hours or 15.
It’s the same reason battery life is so critical in EV’s. Smaller batteries need to be charged more often which eats up more of their remaining lifespan. It’s a downward spiral that means a 50% extra lifespan up front can be worth 100% extra lifespan in 3 years.
Laptop batteries are also expensive in terms of money, weight, and bulk which puts Intel into a much larger bind.
My mom would love to be able to use the same apps on her phone and her computer. I've been thinking about suggesting her next computer be an apple one since she got her first iphone and this makes it easier. Your Mom May Vary.
Not sure of the source of your 15% but I'm willing to bet that by value it's more - no Celerons in Apple's line up. Plus Apple wouldn't be going down this route if it didn't expect to grow market share - and although people don't care if it's M1 or i5 they do care if the experience is better.
Then Apple's success with the M1 will spur others - I would not be surprised if Microsoft follow them down the same route.
> Apple wouldn't be going down this route if it didn't expect to grow market share
Marketshare is not what Apple is about. Apple is about profitability and control. Their move to own silicon is driven by improvements in the reliability of their build pipeline (no more waiting for tic-tocs and whatnot) and tighter control / integration of their whole stack (same arch on phones and pc). That these chips happen to perform so well that they are potential market-growers, is a welcome coincidence.
Growing marketshare but profitably and without impairing the brand is what Apple is about. That's why we have the iPhone SE. The M series lets them do that with the Mac now. And more Macs implies more Apple services sales.
It's certainly partly defensive - they were frustrated with Intel - but Apple would only make a move of this scale if it thought it created business opportunities for them.
I think you are vastly underestimating how hard IT departments will kick you if you request or bring a device that cannot properly execute the company-critical legacy Windows x64 software. Like SAP, for example.
(SAP is the largest non-American software company by revenue and does business management, workflow automation, and bookkeeping)
My prediction is that outside of hipster startups, M1 will have no effect on business laptop sales.
But then again, the current version of SAP is S/4 HANA, and unless you are a developer or admin for that, you will be using their Fiori based web clients, so a normal browser is enough. I am a developer in an S/4 rollout project in a Windows-only shop, but for our future system landscape I could see the normal people using the SAP systems using any kind of laptop or tablet. Even we are testing iPads and laptops at least.
>My prediction is that outside of hipster startups, M1 will have no effect on business laptop sales.
This is what everyone always says but the iPhone kicked off a whole BYOD trend that has ended up with many high-value employees caring a lot about what tools they have to use, and a lot of software engineers want Macs.
I’ve used (and developed software for, and helped administer) SAP from my Mac on and off for 20 years. Tends to be easier these days now that everything is mobile and web.
A lot bigger companies than “Hipster startups” use Macs, this tends to start with the C-suite and people follow suit.
My point also wasn’t that everyone was going to switch to Mac. It was that M1 proves you can build a “better in every way” PC with an ARM architecture. Linux ARM is also being pushed by AWS heavily from the server side with impressive price/performance numbers.
Windows ARM has been failing for many years, but I suspect this is going to change. Microsoft has a talented virtualization group, where the HyperV roots go back to the Connectix Virtual PC team that built PPC/x86 emulation for the Mac. I suspect they can pull off something like Rosetta - they just need a chipmaker to collaborate with. Might even be Intel! Pat Gelsinger is an outside of the box thinker.
You remind me of folks that thought the iPhone / iPad would have no impact on Blackberry sales, as real businesses need keyboards.
No, SAP is more like an Operating System for your factories. It contains EVERYTHING, from payroll to inventory management. Think of it more like an Exchange server plus all Microsoft office apps combined. To connect to the Exchange server and get all features, you need Outlook. It's the same with the SAP database and SAP client GUIs.
The official GUI is C++ and Windows only. They do have a Java port for other OSes, and some 3rd party GUIs, but none of that is feature-complete or even halfway there.
> I think you are vastly underestimating how hard IT departments will kick you if you request or bring a device that cannot properly execute the company-critical legacy Windows x64 software. Like SAP, for example.
Many companies have long ago set up some beefy Citrix servers for those application.
I think you are vastly overestimating the "revolution" of what the M1 represents to the industry. Apple isn't selling it to any other PC makers, and corporations aren't pivoting away from Microsoft for a CPU. Every single ARM chip that's been targeted at the Windows world has produced yawn-inducing performance.
> it isn't a selling point to my mom or her friends
Really? That's surprising to me. I'd imagine that for the demographic of her and her friends, quality of life increases for their phones are far more material than for their computers.
That's not what I'm getting at. What I'm getting at is that to say that "even if Apple goes 100% M1, there's the other 85% of the market that Intel is likely far more concerned about." is somewhat far-fetched. Apple can make their own desktop chips because it's an easier problem than making a phone chip (performance/thermal efficiency), but Intel can't make because they've sacrificed thermal efficiency time and time again -- not just this time but a decade ago. Remember Prescott?
I think that is why Intel should be (and probably is) worried about Apple. They will make Intel redundant by having solved a harder problem which their own problem becomes a subset of.
I agree with your market breakdown, but surely not with your assessment.
In the consumer segment, you have regular people trying to make vacation videos with software like Adobe Premiere and Adobe Media Encoder, or Magix. Nvenc quality is bad. AMD is horribly slow. The only fast high quality encode is with Intel's dedicated CPU instructions, which both apps heavily promote to their users.
And the 30% that you mention that run VMs... Wouldn't they be pretty happy if Intel added dedicated CPU instructions to make VMware better?
I agree that for the work that I do, AMD is as good as or better. But people doing highly parallelizable tasks like compiling are the minority.
I think you might over estimate the prevalence of video editing software like this. Adobe don't appear to sell consumer versions anymore, it's only pro subscriptions now. Magix is sold at a "vacation video friendly" price, but doesn't mention Intel in their marketing material.
I just don't think the market for home devices is thinking about their video encoding time when they buy a laptop, but I do think they'll use an M1 Mac and find it surprisingly fast, or hear from a friend or family member that they are really good.
Intel just haven't been optimising for the main user experience seen by these people, or those writing "normal" server software either. They've been pushing AVX512 instead, which looks good for video or things like that, but not for regular use-cases.
Another good example is how fast the M1 chips (and the A chips in iPhones) perform at Javascript benchmarks. Those benchmarks look a lot more like what most people are doing most of the time than video encoding benchmarks.
Plus, as a user of the software, I can tell you that if you tick the "Hardware Acceleration" checkbox on AMD, a popup will tell you to buy a supported Intel CPU and then turn the checkbox off again.
BTW I'm picking Magix here because in the local electronics store, that's the video software that you can buy as a box and that is featured in bundles with Intel laptops. So if someone clueless walks in there and says they need video editing, this is most likely what they will end up with.
It's not just marketing but also uses Intel QSV. AMD RADEON has similar feature VCE but its quality is relatively bad and its adoption isn't well, compared to QSV/NVEnc.
Not sure where you're getting that these days? Absolutely in the days of Bulldozer, but AMD's Zen 3 architecture has taken even the single core lead from Intel, not to mention the multi core lead they've held for several years now.
Uh, those numbers are more than three/five years old at this point. Beyond comments on the test bench not being properly set up, Ryzen has improved significantly since then.
AMD's latest consumer-level chips significantly outperform Intel's chips in both price and performance. When talking about prosumer video editing performance, the Ryzen 9 5900x, the second most expensive "new" chip from AMD is a 3.4% performance improvement over Intel's most expensive "new" chip 10980XE. Additionally, the 5900x retails for $549 USD while the 10980XE retails for about $1,000 USD.
On first generation Ryzen AVX2 instructions were executed as 2 AVX instructions as the AVX pipeline was 128 bits wide. This was fixed in Zen 2 and nowadays we are at Zen 3.
> And the 30% that you mention that run VMs... Wouldn't they be pretty happy if Intel added dedicated CPU instructions to make VMware better?
They have this today. What would make them happier is cutting power utilization by half or more, which is looking quite possible with non-Intel Silicon.
Roughly 40% of their revenue is consumer chips where, apart from some games optimisation, they are no longer standing out from the crowd, and the leader is arguably Apple, with AMD doing well. The next ~30% of their business is servers, where there may be a significant number of HPC clients, but the bulk of this is again likely to be VMs running non-Intel specific software, and this market is starting to realise that Intel is nothing special here.
Looking at their revenue breakdown, I struggle to put more than 20% into the things that you mention they are great at. Should they focus on this? It would lose them much of their market cap if they did.