Commentary: The Domino Effect of Apple’s Breakup with Intel

By Alvin Mak

The end of Apple’s partnership with Intel is set to impact the future of tech for years to come.

At Apple’s Worldwide Developers Conference (WWDC) of 2020, the company revealed that its Mac computers will no longer run on processors manufactured by Intel

The Cupertino company had used Intel’s silicon in its fleet of laptops and desktops since 2006. This breakup between the two entities was thus unprecedented, to say the least. 

This move has implications beyond both Apple and Intel, and will likely cause ripples and shifts in the computer manufacturing industry for years to come. 

Apple

Instead of using computer processors manufactured by Intel, Apple plans to produce its own silicon, built to support the infrastructure of chips from British processor company ARM

However, Apple is not diving into processor manufacturing empty-handed. It has been using its self-produced, ARM-optimized processing hardware on its mobile products since 2010, when the iPhone 4 and the first generation iPad were released. The switch to Apple silicon opened the doors to the Retina Display on the iPad, in addition to its own GPU, which subsequently gave rise to Apple’s AR capabilities

Apple’s transition to manufacturing its own ARM-compatible processors for its computers today will allow Macs to run iPad and iPhone apps, wholly integrating Apple’s OS across its devices. Yet concerns have flared due to Apple’s bumpy history with switching computer chip manufacturers. 

The initial transition in 2006 from PowerPC processors to Intel’s chips was less than seamless; its developers had to painstakingly rewire Apple’s OS to accommodate Intel’s x86 infrastructure

This time around however, Apple is looking to make the transition to Big Sur—Apple’s new Mac OS—as seamless as possible. With software emulator Rosetta 2, users will be able to run Intel-optimized apps on ARM computers; apps from lagging developers will still be available to users. 

Additionally, Rosetta 2 will be able to translate outdated programs into ARM-accessible formats upon download, rather than translating apps in real time and potentially slowing them down. Rosetta 2 will also be able to virtualize Linux—Apple’s current MacOS language—which will let users continue to use the language even on updated ARM hardware. 

The true seamlessness of this transition was demonstrated by the Final Cut Pro demonstration at Apple’s WWDC, where the processing-intensive filmmaking app was run without a hitch on Apple silicon. It seems like ARM processing in Macs has a promising future ahead of itself. 

Not only will Apple be able to achieve OS standardization across all its devices, but the company will be independent from Intel’s bi-yearly manufacturing schedule. Upgrades to Apple processing can now be rolled out at Apple’s discretion. 

All these big transitions, however, will not happen overnight. Apple plans to gradually roll out its changes over the course of two years, with the first Apple Silicon ARM products made available by the end of 2020. 

Intel

On the other hand, Intel had already been showing signs of weakening before Apple’s announcement, unbeknownst to many. 

The company’s development of a 10 nanometer semiconductor unit has been less than ideal. Persistent defects in their products have delayed the rollout of the upgrade and nudged the company off its usual  biennial release schedule. 

To make matters worse, the development of an even smaller 7-nanometer semiconductor was also delayed, as announced by Intel on the 24th of July. The company initially planned on shipping these chips in the beginning of 2021, but instead saw that deadline pushed back by 6 months. Its inability to manufacture these semiconductors sustainably put them a whopping 12 months behind internal schedules. As a result, Intel saw its stock plummet by a dramatic 16% the day of the announcement. 

Reasonably, Apple’s doubts over Intel’s capability to reliably produce for the Cupertino company’s Macs grew. Apple’s breakup with Intel will undoubtedly deal a blow to the processor manufacturer’s financials—Portland investment analyst Weston Twigg predicts a $2.5 to $3.5 billion a year loss of revenue and at least several hundred million in yearly profit as a result. However, with the support of cloud service companies, Intel has been able to stay largely float, with quarterly earnings still above expectations

Yet, Intel’s troubles are looming, especially if other companies follow in Apple’s footsteps. 

Microsoft and others

A solid handful of tech manufacturers have already been making ARM-designed processors, including but not limited to Qualcomm, Samsung, and now Apple. Should Intel continue to fall behind on deadlines, more tech companies may lose faith in its ability to deliver in a timely manner, and will consequently gravitate toward manufacturing their own ARM silicon. One of Intel’s potential big losses is Microsoft, according to former Apple executive Jean-Louis Gassee

Microsoft had previously considered switching to ARM-compatible processing in 2012, when the company released the Surface. However, it proved unsuccessful due to its failure to achieve application compatibility—many users reported a choppy and less-than-convenient experience running Windows. Further models of the Surface were also criticised for their inability to run even Microsoft Office and popular games like Fortnite

However, with Apple paving the way for improved Intel to ARM compatibility with the emulator Rosetta 2, perhaps Microsoft will be able to make the transition more seamless with its own software emulators. 

As Gassee said, “This leaves Microsoft with a choice: either forget Windows on ARM and cede modern PCs to Apple, or forge ahead, fix app compatibility problems and offer an ARM-based alternative to Apple’s new Macs.”

If a tech giant like Microsoft were to also give up Intel, it’s likely to also prod companies like HP, Dell, and ASUS into doing the same. Intel might see some seriously troubled waters ahead. 

One option Intel does have, however, is to shift to manufacturing ARM-designed hardware as well. Nonetheless, only time will tell how the company will handle the resulting changes of its monumental breakup with Apple. 

Photo by Johannes Plenio on Unsplash

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