What the Apple transition to in-house components means for tech leaders

what-the-apple-transition-to-in-house-components-means-for-tech-leaders

Apple has announced new in-house components, most notably its CPUs. Here’s how this could change the IT landscape.

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As has been long-rumored, Apple recently announced a transition to in-house designs for all of its products, including its desktop processors. This marks the end of a 14-year partnership with Intel for its desktop and laptops and continues a trend that started with the iPhone and iPad adopting Apple-designed CPUs several generations ago. 

SEE: WWDC 2020: The biggest takeaways (free PDF) (TechRepublic)

While the CPU is the headliner, Apple is also bringing most other component-level designs in-house. This accomplishes several things for the company, from providing more control over product performance and power use, to reducing the ability of other companies to copy Apple features by using the same off-the-shelf components. The move is also somewhat intriguing as Tim Cook is broadly credited for designing Apple’s far-flung and complex supply chain, which will be dramatically overhauled as Apple brings the engineering portion of that supply chain in-house.

This is not the first time Apple has bucked the Intel-dominated desktop market, as prior to the Intel transition Apple used Motorola CPUs in its core products.

A return to the proprietary era?

The Intel-driven computing world has been with us for such a long time that it almost seems like an immutable law of the universe; however, the early days of computing, particularly in the enterprise, were largely based on end-to-end vendor platforms. If your company bought IBM, the CPUs, storage, and operating system were all from IBM. Similarly, a “DEC shop” has workstations, mainframes, networks, and software from the company.

The theory behind this integration is the same one that Apple has advanced as justification for its transition to Apple-designed components: If one company controls every aspect of the hardware and software, the performance will be optimized. This is an obvious benefit on mobile devices, where battery power is limited and users are demanding ever-increasing capabilities and performance.

SEE: WWDC 2020: iOS 14, iPadOS 14, watchOS 7, Apple Silicon chip and everything business pros need to know (TechRepublic)

While power constraints are less severe on desktops and laptops, the ability to “one up” competitors in an increasingly commoditized hardware market is even more compelling. Apple can theoretically introduce a new feature or function unique to its hardware design that remains unique, whereas Intel adding a feature to its processors makes it available for any hardware manufacturer who includes the new chip. Perhaps this is a recognition that other companies have caught up to Apple in their physical hardware designs, combined with a recognition that dwindling desktop and laptop sales are a sign that the Intel platform has grown “good enough” that enterprise and consumer buyers don’t see a need to purchase new machines with any regularity. What better way to compel Apple users to upgrade their machines than to create an entirely new hardware architecture that forces users to upgrade if they want the new stuff?

Winners and losers

Like any major technology shift, this is a bit of a gamble for Apple as there is really only one obvious winner and several losers in this transition. The winner is clearly Apple, which will gain more control over its ability to differentiate features and functions of its machines and set the stage to further blur the lines between its mobile and desktop/laptop platforms. If my iPhone, iPad, and MacBook all use the same core computing platform, it should be an easy matter to allow the same software to run on all platforms. It’s not difficult to envision an iPad-like device that works as my desktop when plugged into an Apple dock, and a highly-effective tablet/laptop hybrid that allows me to use iPad-like apps when needed, and full blown desktop apps when I need those. Apple also locks competitors out of its engineering advancements and is no longer constrained by Intel, who must factor in hundreds of demands and constraints as it designs its next CPUs.

The list of losers is far longer in the near term. Software developers will need a significant investment to transition to the new platform. While Apple has downplayed the difficulty of this transition in its announcements, at a minimum developers will need to rebuild their applications and retest them, while likely asking users to pay for an “upgrade” that will probably add minimal new features.

SEE: WWDC 2020: Apple announces Universal Quick Start program for developers (TechRepublic)

Similarly, companies and consumers will be forced to buy new hardware in the near term if they want access to new features, and in the longer term as Apple ends support for Intel-based machines. As someone with 10-year-old Intel hardware that’s still running fine as a workstation for the family, this creates premature obsolescence that presents a financial and waste-related burden.

Longer term, assuming Apple takes broad advantage of its new platform, developers and users will begin to see benefits from the transition. However, it’s unclear what happens to the rest of the computing industry, where there are only one or two players (Microsoft and perhaps Lenovo come to mind) that could support in-house component engineering at a similar scale to Apple. We could even see one of these companies acquire Intel or AMD and take broader control of the hardware design.

For tech leaders, while this may seem like a consumer-focused announcement, it could portend dramatic changes to computing as we know it, and it’s a space worth watching in the coming months.

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