Osborning The Mac. Or Not.
by Jean-Louis Gassée
This time, it looks like rumors are about to become reality: The Mac is moving to Apple-designed ARM-based chips. Today, we discuss the risks, challenges, and benefits of such a transition.
In 2021, Apple will ship a new generation of Macs based on a homegrown ARM architecture processor. So says a Bloomberg article; it adds that Apple will announce details at its all-online WWDC (Worldwide Developers Conference) starting June 22nd. Given Bloomberg’s regrettable but never regretted misdeeds when reporting on Apple, we approach the prediction with caution. This time, however, the story appears to be true.
From a PR perspective, the transition to ARM looks like a delicate balancing exercise. If Apple announces the move six months before the first ARM-based machines are scheduled to emerge, how will that effect current Mac sales?
The question awakens memories of Adam Osborne, creator of the first successful portable CP/M computer, the Osborne 1. In 1983, the polymath entrepreneur managed to kill sales of his creation by promising that its successors, the Osborn Executive and the Osborne Vixen, would be even better, Just You Wait! The pitch was so persuasive that customers did indeed wait. Sales collapsed and so did Osborne’s business.
This is known as the Osborne Effect. Over the years it has afflicted many tech companies, most notoriously Nokia with its failed transition to Windows Phone.
At the WWDC we’ll see how Apple execs walk this tight rope using price, performance, and product features to keep the Mac business in balance, but let’s not forget that Apple has negotiated a similar strait before. At Apple’s June 2005 WWDC, Steve Jobs announced that the Mac would move from PowerPC processors to Intel x86 CPU chips. The new Intel Macs wouldn’t be available until early 2006.
How did the Mac business perform during the transition? To find out I went to Apple’s quarterly SEC filings for fiscal years 2005 and 2006. In summary, Mac sales were remarkably resilient. There was no collapse, no waiting for the Intel-based machines. The weakest growth was in the quarter ending in March 2006 where Mac revenue grew by only 5%, only to rebound in the following two quarters: +19% and +37%, respectively. Success! This should give everyone comfort that Apple is likely to manage the 2020–2021 processor transition without a major hit to its revenue.
(A note in passing: In 2006, iPod units grew 75% and revenue of $7.7B exceeded Mac revenue of $7.4B. Apple was the iPod company back then, getting ready to become the iPhone company, as some call it now.)
Apple 2020 is also much more robust and diversified. 2019 revenue was $260B vs. $19B in 2006. Mac revenue today represents only 10% of total sales; in 2006, it was 38%. The modest Mac share of total Apple revenue makes recent stock market drunkenness hard to explain. On the rumor of new ARM Macs next year, Apple shares climbed by more than 5% in the first three days last week, reaching an all time high valuation of more than $1.5T. It doesn’t make sense. (Update: The market promptly sobered up and fell more than 6% on Thursday and rebounded a bit on Friday.)
Setting aside the PR complications and excessive market enthusiasm, we can think through some of the consequences of a switch to Apple-designed ARM processors inside 2021 Macs.
The first notable change will stem from the lower power dissipation associated with ARM derivatives. For several years now, benchmarks have pointed to iPhone processors that offer “desktop-class” computing power. And yet, an iPhone doesn’t feel as warm as a MacBookPro. Besides being more comfortable on our laps, lower power dissipation will mean smaller batteries, longer battery life, and lighter and somewhat slimmer MacBooks for the same screen size.
On a desktop machine, there’s no benefit in lower power dissipation and slimmer bodies. This leads one to speculate that the ARM transition will prioritize laptops while iMacs continue to run on Intel-based hardware.
Looking at macOS and Apple-written apps, there’s every reason to believe that the transition will be as graceful and smooth as it was in 2005–2006. Chances are we’ll see a few demos of Apple software running on an ARM prototype at next week’s WWDC.
Third-party apps are a different story. Such transitions never go completely smoothly for software developers who must scramble to find the engineering resources — and the money — to port their apps to a new platform. To forestall the inevitable grumbling, we expect that Apple will provide plenty of software tools and, for its most important third party developers, hardware test beds — just as the company did in 2005. At next week’s WWDC sessions, we can expect a substantial amount of airtime dedicated to demos of ARM emulation software and transition tools, and explanations of best practices.
Finally, just as moving house is an opportunity to leave old, banged-up furniture and appliances behind, we expect Apple will jettison some of its musty software baggage, similar to what the latest macOS Catalina version did when it stopped supporting older 32-bit software last year. In retrospect, the move to 64-bit software may have been made not just for its own sake, but in contemplation of the ARM transition.
This should prove to be an unusually interesting WWDC, followed by weeks of helpful discussions, predictions, rumors and, of course, the usual Apple-is-doomed howls.
PS:
Interested readers will enjoy Steven Sinofsky’s ARM Macs twitter thread now rendered as a Medium blog post: Apple Macintosh and ARM Processors. The author is unusually knowledgeable about OS transitions challenges: he used to be Microsoft’s President of Windows.
There are also two relevant John Gruber posts from his daringfireball.net blog. Bombs Away, published in June 2005, discussed the transition to Intel 15 years ago. In On Apple Announcing the ARM Mac Transition at WWDC This Month, published last week, Gruber looks at the options and challenges that Apple faces today.
— JLG@mondaynote.com
