Category: Apple

You have to imagine that yesterday was a pretty good one for the folks at Arm—the little understood, but highly influential chip design company. Not only were they able to report that their designs power the world’s fastest supercomputer, there’s also that little detail about Apple choosing to switch from Intel-based CPUs to Apple designed custom silicon built on Arm’s core architecture for future generations of Macs.

A word on the supercomputer news first. Every year at the opening of the ISC high-performance computing conference, the organization running it releases the Top 500 performing supercomputers. As with most years, this year’s list was utterly dominated by Intel-based machines, but there was a surprise at the top. For the first time ever, Arm-based chips (in this instance, built by Fujitsu) are the CPU brains being used in the number 1 ranked machine—the Fugaku supercomputer, which is operated by the RIKEN Center for Computational Science in Japan. In addition to the prestige, it’s a huge psychological win for Arm, which has been working to make an impact on the enterprise computing world with its Neoverse CPU architecture for the last several years.

In the personal computing world, Arm notched an equally impressive victory with the official unveiling of the long-rumored Arm-powered chips for next generation Macs. Apple doesn’t have the largest market share in the PC market—it’s around 7% or so overall—but its impact, of course, greatly outstrips those numbers. As a result, by making the official announcement of custom Apple Silicon for the Mac, which was designed leveraging Apple’s architectural license of Arm’s chip IP designs (though Arm is never mentioned in the keynote or any of the press releases for the event), Arm scored a huge gain in credibility and awareness.

Of course, awareness doesn’t translate to success, and as exciting as the development may be, there are a great deal of questions, as well as previous history, to suggest that challenges await. First, while Apple talked about switching to this new design to both improve performance and reduce power consumption, it has yet to show any comparative benchmarks to existing Intel-based Macs for either of those metrics. Of course, that’s likely because the silicon isn’t done. Heck, Apple didn’t even announce the name of the new chips. (The A12Z Bionic chip in the developer system, and currently in the iPad Pro, is likely only an interim solution.) My guess is that we won’t get any of these details until the end of the year, when the first-generation Macs with these new chips are unveiled.

Apple’s primary stated reason for making the move away from Intel to custom silicon was to improve the experience, so these comparative details are going to be critically important. This is particularly true because of the generally disappointing performance of Arm-based Qualcomm and Microsoft chips in Windows on Arm PCs like the Surface Pro X. The key question will be if Apple is able to overcome some of the limitations and truly beat Intel-level performance, while simultaneously offering significantly better battery life. It’s an extremely challenging task but one that Apple clearly laid out as its goal.

There are also many unanswered questions about the ability to pair these new chips with external GPUs, such as the AMD Radeon parts Apple currently offers in certain Macs, or any other companion chips, such as 5G modems. While Apple currently uses Qualcomm modems for the iPhone and certain iPads, the company is known to be working on its own modems, and it’s not clear if those will be available in time for the launch of a 5G-equipped Macbook (should they choose to do so). As for graphics, Apple only uses its own GPU designs for its other custom parts for iPhones and iPads, but some computing applications require more graphics horsepower than those devices do, so it will be interesting to see if Apple offers the option to pair its new Mac-specific SOCs with external GPUs.

Finally, of course, there is the question of software. To get the best possible performance on any platform, you need to have software developers write applications that are native to the instruction sets being used. Because that can take a while, you also have to have a means to run existing software (that is, designed for Intel-based Macs) on the new chips via emulation. Ironically, Apple has chosen to use the exact same playbook to transition away from Intel processors that it used to transition into Intel processors. In fact, it’s even using the same names (with the addition of a version 2) for the core technologies: Universal Binaries 2 are combined applications that run on both Intel CPUs and the new Apple custom silicon chips and Rosetta 2 is the software used to emulate Intel instructions. This time around Apple also added some virtualization capabilities and demoed the ability to run Linux in a virtualized container. However, interestingly, there was no discussion of Windows running on the new Mac. Presumably all the work that Microsoft and its partners have done to bring Windows to Arm-based CPUs should port over fairly easily to Apple designs as well, but the details on this are not clear just yet.

To the company’s credit, Apple did an impressive job when it created this playbook to move from PowerPC-based chips to Intel, so here’s hoping the same strategy works the other way around. While Apple made it seem like it was a fairly trivial task to shift from x86-based instructions to Arm, if you use its Xcode development environment, history strongly suggests that the transition can be a bit daunting for some developers. To their credit, however, Apple did show functioning demos of critical Microsoft Office, Adobe Creative Cloud, and Apple professional apps running natively in the new environment. One concern Apple didn’t address at all was hardware device drivers. That was a key challenge for early Arm on Windows devices, so it will be interesting to see how Apple does with this.

One nice advantage that Apple and its developers gain by moving over to the same Arm-based architectures that it uses for the iPhone and iPad is that iOS and iPadOS applications should easily run on these new Macs—a point Apple was eager to make. As exciting as that first sounds, however, there is that detail of a lack of a touch screen on any existing Mac. Imagine trying to use a mouse with your iPhone, and you can see how initial enthusiasm for this capability may dampen, unless Apple chooses to finally allow touchscreens on Macs. We shall see.

The last point to make regarding all of these developments is that Apple ultimately chose to move to Arm to gain complete control over the Mac experience. As good as Intel’s processors have been, Apple has shown with its other devices that it likes to own the complete vertical technology stack, and the only way to do that was to design the CPU as well. It’s the last critical piece of the puzzle for Apple’s strategy to control its own destiny.

Regardless of that reasoning, however, it’s clear that both Apple’s decision and the supercomputing win mentioned earlier provide a great deal of credence to Arm’s efforts. At the same time, it arguably puts even more pressure on Arm to continue its pace of innovations. For a company that so few people really appreciate and understand, it’s great to see how far and how wide Arm has pushed the boundaries of computing. Now let’s see how they continue to evolve.

As the impact of the coronavirus spreads, Apple issued a rare statement yesterday related to the coronavirus’ impact on its quarterly earnings guidance and that announcement is now reverberating throughout the tech industry as well. The company reported that its current quarter’s earnings will likely be negatively affected by several factors related to the virus, specifically its effect on the Chinese market and its global supply chain.

What makes the news even more disconcerting is that the company had already suggested on its last earnings call just a few weeks back that revenues for the quarter could fall into a much wider range of potential outcomes than they typically provide because of the uncertainties the virus was creating. A second negative statement just a few weeks later highlights that the impact of the virus is proving to be much worse than originally thought. The fact that they didn’t say how much the earnings guidance decline would be also emphasizes the uncertainty about the total extent of the virus’ impact.

Specifically, Apple said that sales of iPhones in China—an increasingly important market for the company—will be lower than it had predicted because many of its retail stores and other retail partners’ stores have been closed as a result of the virus. In addition, as stores reopen, the traffic in them has been significantly lighter than normal, leading to the slowdown in sales. Theoretically, online sales shouldn’t be impacted as strongly, but it’s not hard to imagine that the delivery mechanisms in China have also been slowed by the virus.

The second factor Apple cited—a slower ramp to full production after Chinese New Year—is potentially more troublesome, because it impacts the company’s entire global supply of iPhones and other devices. In addition, it certainly implies that other major tech hardware vendors could start feeling this soon as well.

As most people know, the vast majority of Apple’s devices are built in Chinese factories, so the company—like most every other hardware tech vendor—is currently very reliant on these Chinese factories cranking out products in huge quantities on a steady basis. And that’s really the problem, because if Apple is starting to notice the impact strongly enough that it felt the need to issue a statement on revised guidance, then we’re likely going to see a lot of other hardware-focused tech vendors do something similar over the next few days or weeks. In fact, even before Apple, Nintendo had disclosed that it won’t be able to build as many of its Switch gaming consoles as it would like, because its primary production partner Foxconn—who also happens to be Apple’s largest factory partner—was facing delays at its Chinese factories.

The other thing to bear in mind is that even companies that don’t have factories in the most affected areas of China can see their production slowed because of their dependence on certain parts or other components that do come from the most impacted regions. These days, the number of subcomponents that go into more sophisticated tech devices can easily reach over 100, and because so many of these subcomponents are built in China, the range of impact from the virus is potentially much wider than it first appears.

By the way, the timing here is also very important. One thing that many people don’t understand is that, as terrible as it is, the coronavirus started seriously impacting Chinese factories just before the one week in the year when they’re scheduled to be offline: Chinese New Year. If the virus had hit at another time of year, the impact could have been much worse. Now companies are trying to determine how many workers are returning to the factories after their scheduled break, and it’s those metrics that are going to be the most closely watched over the next few weeks.

In addition, out of an abundance of caution, I’ve also heard some hardware vendors say that the Chinese government is imposing mandatory factory shutdowns of 30 days if a single worker is discovered to be infected. Needless to say, that’s going to force companies to be very conservative about letting employees come back to work, which could also result in serious delays in production.

Ultimately, however, it’s essential to remember that this issue is an extremely challenging humanitarian crisis and that companies need to be (and, likely will be) sensitive to the issue and do whatever they can to keep their workers safe. Taking the big picture view, these production delays will likely (and hopefully) be little more than a blip on the long-term radar of tech industry production. Unfortunately, because many institutional investors are more concerned with short-term financial performance, this may cause some short-term challenges for those companies who are being impacted. Long-term, let’s hope the tech industry can learn from this crisis and figure out ways to both protect the workers who help bring products to life and to create supply chains that can withstand the inevitable challenges that lie ahead.