With Apple Silicon, the Mac Is Now Capable of Market Dominance

But will Tim Cook be bold enough to go for it?

Photo: Justin Sullivan/Getty Images

Apple makes some bold claims about the capabilities of its M1 processor — the new “Apple Silicon” system on a chip that powers its latest MacBook Air, MacBook Pro, and Mac mini.

World’s fastest CPU core in low-power silicon

World’s best CPU performance per watt

World’s fastest integrated graphics in a personal computer

…a quantum leap in performance at a fraction of the power.

Apple claims the MacBook Air, for example, has an “up to 3.5x faster CPU” and “up to 5x faster graphics” than its Intel-powered predecessor, despite no longer requiring a fan.

Obviously the use of the phrase, “up to,” gives Apple some wiggle room for making the performance leap sound bigger than it actually is.

Nevertheless, early benchmark results suggest the performance improvements are substantial and real, if slightly less dramatic than Apple’s marketing might imply.

Less haste, more speed

We see now why Apple took so long to ditch Intel and put its own ARM-based chips in its Macs.

Apple could have put its own silicon in its laptops years ago. The A-series chips it uses in its iPhones and iPads have long been capable of powering a Mac to browse the web, watch videos, and perform basic productivity tasks.

Such a move, however, would have required a trade-off. It would, most likely, have involved sacrificing some performance in exchange for better battery life and improved portability. And Apple did not want to give the impression that buying an Apple product is, in any way, a compromise.

So Apple waited until such trade-offs were no longer required. They waited until they could confidently claim that Apple Silicon would provide both improved efficiency and improved performance.

And if the reality is anywhere even close to matching Apple’s marketing claims, this really is a very big deal indeed.

Source: Apple

Double cost savings

Apple Silicon brings opportunities galore for the Mac. It can supercharge the Mac’s computing performance. It can also supercharge the Mac’s market share. But does Apple have the ambition to make that happen?

Apple has long benefited from not having to pay the “Windows Tax.” While other companies feel obliged to pay to install Windows on their computers, Apple has its own operating system, macOS.

And now, Apple no longer has to pay the “Intel Tax,” either.

It is true that it costs vast amounts of money to develop and maintain your own operating system and your own chip designs, but per-unit costs diminish with scale. And Apple has plenty of scale — especially when you consider that much of the software and chip development costs are shared with the iPhone and iPad.

Apple won’t disclose details about its chip development and manufacturing costs, but it is overwhelmingly likely that the move to Apple Silicon will lower the cost of making a Mac. Analysts from Forbes estimated that the switch could save an average of about $110 per machine — but that could increase considerably with scale.

Apple could simply continue selling their Macs at the same price levels and sit back and enjoy even larger profit margins. But that would be a ludicrously timid approach to take.

What would Steve do?

It’s at this point that Apple fans may be tempted to ask, “But what would Steve Jobs do?” And I think the answer to that is clear.

In a famous 2007 interview, Steve Jobs, with Tim Cook sitting on his immediate right, addressed the possibility of making cheaper Macs.

Our goal is to make the best personal computers in the world and to make products we are proud to sell and would recommend to our family and friends. And we want to do that at the lowest prices we can.

In other words, while insisting that Apple would never “ship junk,” Jobs was making it clear that his ambition was to get Apple’s Mac computers into as many people’s hands as possible. And he was absolutely prepared to compete on price — or, at least, on value-for-money — as well as on quality and style.

Opportunities galore

Thanks to its in-house ARM processors, Apple now has one of its best opportunities to apply Steve Jobs’ philosophy and fulfill his ambitions.

It’s true that Apple has yet to lower the price on the new 13-inch MacBook Air or the 13-inch MacBook Pro. At this stage. Apple is seeking to establish an outstanding reputation for its M1 processor and exploit any extra demand that may arise out of performance gains and improved battery life.

The Mac mini, however, has seen a price cut. Prices will start at $699 — a $100 reduction on the price of its predecessor. Could this be an indication of Apple’s intentions for the future?

Apple could bring the price considerably lower, if it chooses to do so. Consider the Apple TV 4K device. It contains all the key elements of a computer — processor, RAM, and storage. It too uses Apple Silicon. And yet it retails for just $179.

The new Mac mini costs $520 more than the Apple TV 4K and will have superior internals. But it’s a very safe bet that the Mac mini does not cost anything like an extra $520 to manufacture. So there can be no doubt that an Apple Silicon Mac mini can be produced and sold at a profit for a lot less than the $699 Apple is currently charging.

And what about cheaper MacBooks? If an iPad can be produced and sold at a profit for $329, it follows that Apple could produce a quality MacBook for hundreds of dollars less than the current $999 starting price of the MacBook Air.

Previously, the biggest difference in manufacturing costs between a Mac and an iPad would have been the Intel processor. But with both Macs and iPads using Apple Silicon, that wedge disappears.

I don’t imagine we’ll see a MacBook in the price range of an entry level iPad, but I wouldn’t be surprised if a starting price of $799 prompted a substantial increase in the Mac’s market share.

Apple currently has only a 7.7% share of the PC market — which is a long way behind the 25.7% of market leader, Lenovo. So, for each Mac user, there are multiple potential Mac users. And many of those potential users will have previously rejected the Mac because of the price. But with Apple Silicon, Apple now has the means to let the Mac reach those users and finally fulfill its potential.

Apple Silicon gives Macs performance and efficiency capabilities that may be beyond the reach of any of Apple’s rivals. At the same time, it gives Apple scope to significantly lower prices, whilst maintaining healthy profit margins.

Apple has a golden opportunity to dramatically increase the Mac’s market share over the next few years. Arguably, it would be a betrayal of Steve Jobs if it failed to take that opportunity.

Tech Fan, Philosopher, Economist and Basic Income advocate. tiny.cc/RJMedStuff

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