Sidharth Moorthy
5 years later at Apple’s first ever virtual only WWDC 2020 Tim Cook announces that there would be no more Intel chips for Apple’s Macs!
‘Don’t ever be conceited’, I remember my school principal Sister Mary saying this every morning in the assembly, almost 12 years later I can say that, I get it!
In 2005, when Steve Jobs announced Apple’s shift to Intel from PowerPC, Apple was not even a fraction of Intel’s size but today Apple has a market value which is over 6x Intel’s market value.
The processors that Apple designs for its mobile phones are pegged to be at par if not more powerful than what Intel makes for the PCs!
Arm Holdings, the company which has been developing the iPhone’s coveted A series bionic chips, is going to be the company to develop the Apple designed, Apple Silicon chips for the Macs. Apart from curbing the operating costs associated with Intel’s supply constraint and technological backwardness, the new chip is expected to provide better battery life & faster processing speeds. Also, as per analysts, the switch could provide us the customers with a savings of $75-$150 on our new Macbooks!
Now for the repercussions to be faced by Intel:
Short Run: Minimal, given the 2 years’ time that it is expected to take for complete transition the jolt won’t be felt as yet.
Long Run: It is estimated to cost Intel $3B/yr, which is approximately 4.16% of its revenue, considering the FY2019 revenue of $72B
This doesn’t mean that it is end of Intel and Apple’s run. Apple will still remain a client of Intel’s as its technology supports the behemoth’s cloud computing service. But this is hardly a silver lining for intel, as with this transition it isn’t just the brand image and revenue that would get hurt but would also make Intel’s future prospects questionable.
It is true that not a lot of companies currently hold the position of achieving a similar feat as Apple, but you never know who could in the long run, given the cost-effectiveness of this move.
What this teaches us is, we shouldn’t be so conceited by our success that we fail to acknowledge our competitors’ abilities. I say this because Stacy Smith’s statement in 2015 was made due to the rumors of Apple moving towards making their own processors, so Intel had 5 years to make advancements to avoid this loss.
Learn from your mistakes and come back bigger and stronger!
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