Apple’s Inaction on Mac Computers Allows Microsoft Third Attempts on Windows ARM64, now Launches Copilot+PC
Apple should have lowered its Mac price and listened to the users' needs regarding upgrade pricing and confusing product lineups.
Recently, Microsoft’s new Copilot+PC has made headlines.
According to Microsoft, the highlights of this new “Copilot+PC” are:
“The most intelligent Windows PC” (AI)
“Every Copilot+ PC comes with your personal powerful AI agent …. our partners at OpenAI”.“The fastest Windows PC”
“Windows now has the best implementation of apps on the fastest chip, starting with Qualcomm.”“unrivaled performance and battery efficiency”
“Copilot+ PCs can deliver up to 22 hours of local video playback or 15 hours of web browsing on a single charge. That is up to 20% more battery in local video playback than the (Apple) MacBook Air 15”.
There are three companies mentioned:
OpenAI (supplies AI)
Qualcomm (supplies chip)
Apple (as a comparison, beat it on battery life)
In my opinion, Apple is not concerned about AI and Qualcomm chips. Apple can cooperate with OpenAI and already has its excellent Silicon chips.
So, what is Microsoft's real breakthrough? Certainly, not hardware. The new Microsoft Surface Laptop looks like a clone design of the MacBook. The real threat to its main competitor, Apple, is Windows ARM64. Microsoft's tactic simply cloned Apple’s success formula: move to the ARM64 platform.
IMO, Apple's leadership made a mistake by preventing this from happening (how come? read on). I believe this wouldn't have occurred if Steve Jobs were alive.
Several years ago, Microsoft’s outlook was not very promising.
Microsoft’s dominance in OS is facing challenges, due to Linux, Mac and Web (web users don’t care the OS; Google Chrome OS is an example).
Many Microsoft revenue streams, such as Office suite, SQL Server, Visual Studio, SharePoint, …, are largely dependent on Windows OS.The recent Windows OS releases were not good or at least not eye-catching.
Windows Vista was a disaster, Windows Mobile failed, and Windows RT (the previous attempt with 32-bit ARM architecture) was also a failure.Windows OS is not suitable for the Cloud.
Linux (free and open-source) is the preferred OS for cloud deployment.Windows OS is slow and not energy-efficient
This results in short battery life on mobile devices, which is becoming essential. Windows Mobile is dead, and its Surface product line is not looking good either.Microsoft Office Suite is facing the challenges of Google and Apple Office Suite.
The office suite has been Microsoft's largest revenue contributor. If OS dominance is gone, people will choose good alternatives from Google and Apple. For example, I haven’t created MS Word/Excel documents for over 10 years (viewed with free Office Suite on Mac, though).
However, Microsoft turned the table around.
As I wrote in the article below over six months ago, Microsoft had the courage to acknowledge mistakes and alter course, usually by copying/embracing competitors' good stuff/strategy.
Some of the Notable Microsoft Actions:
Ditch its Team Foundation Server (TFS) version control and embrace its competitor, Git.
In 2018, Microsoft acquired GitHub for $7.5 billion.Ditch the old IE/Edge (Classic) browser and now Edge (Chromium).
Yes, it was embarrassing, but Microsoft did it.In 2019, Microsoft ditched its UI Test automation tools, Coded UI Tests and recommended Selenium for web testing.
(source: Microsoft Developer Blog 2019–04–12)In 2016, Microsoft brought Linux to its OS, named Windows Subsystem for Linux (WSL).
During this time, Apple was relaxed on its Mac product line. Apple did one great thing: it transitioned to Silicon chips and used ARM64 architecture. Now, Mircosoft copied the formula. While Microsoft did not have its own CPU like M1, this can be easily solved by purchasing from Qualcomm and AMD.
While Apple took the lead on its chip (Apple Silicon) and ARM64 architecture, it did not have a monopoly.
“A small player in the PC market, Qualcomm’s Snapdragon X launch marks its biggest move in the space to date, creating a new wave of competition not only for Intel and AMD but also Apple, which, like Qualcomm, designs custom processors using Arm’s instruction set architecture albeit for its own devices.” — CRN
Qualcomm Snapdragon X Series: TSMC 4nm (source: TomsHardware)
Apple M4: TSMC 3nm (source: TechRadar)
AMD Ryzen 8040: TSMC 4nm (Source: TrendForce)
The monopoly is TSMC (Taiwan Semiconductor Manufacturing Company). Apple and TSMC have a long-term partnership.
Unless Apple can acquire TSMC (which is impossible, as TSMC was considered national security by the Taiwan government), it cannot sleep on without competition. But Apple did.
The logical approach for Apple is to use its lead time to sell more computers that occupy larger and larger TSMC’s production capability, not only strengthening itself but blocking the competitors.
I could figure this out years ago. Surely Apple management did too.
https://www.pcgamer.com/
However, Apple’s orders did not cover TSMC’s second-best 4nm capacity due to insufficient volume. Then, Qualcomm’s Snapdragon X Elite came.
Certainly, TSMC, as an independent entity, makes decisions based on its own best interests and probabaly prefers accepting orders from more than one company. However, Apple’s reputation and unique financial standing still can have it significant influence.
Apple did not need to block smaller competitors, as there are no serious rivals in the smartphone and tablet markets. The only one is Microsoft, according to Statista, which still has 73% of the Desktop OS market share (macOS: the highest reached 21.32% in June 23, now conceded to 15.42% in Feburary 2024).
A wise move for Apple is to book the majority of TSMC’s top-tier manufacturing capacity, e.g. 3nm and 4nm. The simple and practical way is to reduce the Mac Computer’s price and sell more. If there was only one company that could win price wars, it would be Apple (the richest company in the world with the highest profit margin). By dropping the profit margin, grow Mac in the PC market. With more sales, Apple might get more revenue in total. Don’t forget that more Mac users mean more purchases on services (e.g. iCloud storage) and apps on the App Store. Once macOS market share reaches maybe ~40%, it will undoubtedly enter the educational and enterprise markets (just like the iPhone and iPad), and then Microsoft will soon be “Game Over”.
However, Apple missed this great opportunity.
In recent years, the Apple Mac has not performed badly, but it could have done even better. Remembering the Steve Jobs era, Apple drove many competitors out of the market in the following industries: phones, music players, and tablets.
Tim Cook (the current Apple CEO) is a good CEO, but nowhere compared to Steve Jobs (few can argue). Steve Jobs has a strong focus on engineering and quality. Tim, like many MBA-oriented executives, tends to focus on short-term profit margins, not seeing the big picture. In my opinion, Tim Cook’s mistake is using the profit margins of the iPhone and iPad to judge Mac computers, a domain where Apple does not hold an absolutely dominant position.
“In 2023, Mac sales accounted for just 7.7 percent of Apple’s total revenue, down from 86 percent in 2000 and the lowest it’s ever been.” — Source: Statista.
Although Mac sales do not contribute significantly to Apple’s revenue, macOS and Mac computers are the original foundation of Apple’s success today.
Steve Jobs's first action after returning to Apple in 1997 was developing macOS X. What a visionary!
If Steve Jobs were alive, I believe he would think “7.7%” means a big growth area to focus on and eventually push Microsoft to bankruptcy. Unfortunately, the current Apple leadership has long ignored the feedback from Mac Users.
1. All Mac Computers are not upgradeable (after purchase)
The purpose of doing that is quite clear. See below.
This is not always the case. The iMac 27" (one of the most popular Mac models, of which I have two, the 2012 and 2015 versions) allows for user memory upgrades.
2. The base models of Mac mini, MacBook Pro and iMac started with only 8GB of memory.
This is 2024, with only 8GB of memory!
3. Extraordinarily high price for upgrades (only at purchase time).
A memory upgrade is only available at an extraordinarily high price at purchase time.
I quickly searched Amazon, and one branded 16GB Mac-compatible RAM only cost $44 (vs. $400 on AppleStore). The difference is even more alarming when considering the much lower wholesale price that Apple pays.
Many Mac users have complained (in comments) about this on Apple forums or Mac Influencer videos, which Apple has totally ignored for maybe over a decade.
4. The base models of Mac mini, MacBook Pro and iMac started with only 256GB SSD drive.
Last year, I bought my parents a 2TB SSD thumb drive (quite cheap)! This shows how ridiculous the Apple Mac configuration is!
Of course, Apple wants you to pay for the hefty upgrade price.
We all know that a business desires a maximum profit margin. However, repeating the memory pricing tactic on the hard drive is not wise. Customers can use external hard drives, and they grudge against Apple while using them.
Besides pricing, Apple unnecessarily introduced more configurations by cropping the hardware. For example, many reports that the iMac M3 256GB “seems to be significantly slower”. Check out this post on MacRumors Forum.
5. Lacking updates and confusing product lines.
The former 27-inch iMac has been missing from the current iMac lineup for a long time. Also, the updates are very irregular.
Moreover, it is confusing. As of today, the CPU for the several product lines:
iMac M3
Mac Studio M2 MAX
Mac Mini M2
iPad Pro M4 (if counting iPad as a computer)
With Apple having full control over its CPU, people would assume they can plan better.
Personal note: I have two MacBook Pros, two iMacs, and five Mac minis in my house. I haven’t purchased a new Mac since 2019 because the existing ones are still functioning OK. I planned upgrades, especially for test labs running E2E tests (BuildWise CT server + agents). I did attempt upgrading the test lab a few times, however, after adding memory and hard drive upgrades, the total cost deterred me. (I lived in Australia, the price is higher)
Maybe there are a lot of Mac Users like me, reflected a recent drop of Mac sales figures.
Lowering the Price does Help
Some might argue, “Apple’s marketing and sales experts might believe that lowering the price won’t boost sales.” However, this is incorrect. In fact, Apple recently reduced the price of the iPhone 15 in China last month, and the results were evident.
My wife purchased an iPhone 15 two months ago (in Australia); compared to what I see now on China Tmall (large online store), the Chinese price is about 20% cheaper.
Why has Apple slashed its iPhone price in China? Because of competition from Chinese-brand smartphones (e.g. Xiaomi).
But Tim Cook overlooked the Microsoft on PC. According to this article, Microsoft already had two failed attempts on the ARM platform:
2012, Surface RT tablets.
“The devices were so unsuccessful that Microsoft ended up taking a $900 million charge due to having to slash the price of the Surface RT tablets.”2019, Surface Pro X
“featuring the Microsoft SQ1 Arm processor, which was a modified version of the Qualcomm Snapdragon 8cx Arm chip. didn’t offer the battery life or performance vendors promised.”
Maybe, the third time lucky? Let’s wait and see when Copilot+PC hits the market. If it turned out to be good, Microsoft's CEO might diligently follow the formula of the best-ever CEO, Steve Jobs.
Develop a good and reliable OS first with Unix underneath.
Apple: macOS X in 2001.
Microsoft: Windows ARM64, with Windows Subsystem for Linux (WSL).Emulator to run x86 apps
Apple: Rosetta
Microsoft: PrismDesign and mass-produce own Computer
Apple: PowerBook G4 in 2001
Microsoft: Windows Copilot+PC Surface Laptop + Tablet
The below are yet to happen for Microsoft (if the above were successful)
Xode
Re-design Visual Studio from the ground up to match XCodeiOS
Re-design a mobile operating system based on experience from Windows ARM.iPhone
A new Microsoft Phone.…
Tim Cook could have prevented or at least made it difficult for competitors to do all these things with a no-risk (almost guaranteed win) PC strategy (see above).
Steve Jobs’s Tactics to Eliminate Competitors
I started using Apple products in 2005 and purchased the first or second versions of the iPod, iPhone and iPad.
Steve Jobs is a master of product strategy (including pricing). From my observation, he squeezed the competitors out of the market with two tactics plus innovative products (this others cannot copy easily):
Yearly releases of new models (usually very good).
Low price.
Remember the failure of Microsoft Zune (music player), Microsoft Windows Mobile phone, and numerous attempts by many other companies at tablets such as HP TouchPad. During Steve’s time, a few years after Apple released a new product (e.g. iPod, iPhone, and iPad), there were really no real competitors. I recall the market share of the iPod and iPad was over 90% at one stage. Why? they might lose money selling competing products (after adding the cost of R&D, Testing & Marketing).
With the Apple silicon chips, I thought Apple would massively reduce the pricing of Mac computers (at least for the general consumer market) to gradually take the throne from Windows. However, a few years passed, barely any actions. Now, we know Microsoft has been waiting for the opportunity and copying Apple’s way.
Apple Mac once had a very high growth rate starting ~2021, in alignment with the M1 release, reaching over 20% in the USA. Sadly, the trend did not continue. It's a pity Apple didn’t grasp the chance (to reduce price, easier and cheaper to upgrade).
What Happened to ThoughtWorks?
A leading software technical consultancy firm, once renowned for its innovation in Test Automation and CI/CD and positive impact on Agile practices, gradually lost relevance over time.