It's a mistake to think of this in these terms. Nobody was afraid, or needed Apple to prove that this strategy was possible. They already knew, it's a simple tradeoff study. Their problem is that they aren't willing to pay the literal price - monster chips which trade higher transistor count to gain efficiency are more expensive to build.
There's a huge number of complex reasons why the PC industry went down the route it did, and why it's hard to get from where they are to where Apple is, but none of them have much to do with fear of the unknown.
Intel has had to learn this lesson before. With the Pentium 4's, they lengthened the pipeline to 31+ stages by the time Prescott arrived in the hopes of bringing ever-higher clock speeds. What they learned is that clock speeds aren't everything. Pentium D proved that point when it turned the computer into a frying pan (of course trying to catch up to AMD when they brought the first dual core CPU to the market).
The solution is pretty much obvious looking back. Put more cores in place, make them more efficient (in terms of IPC), and clock them lower (so that the voltage can be reduced and power efficiency can permit a decent core count on the chip). Intel learned this lesson years ago, came out with the Pentium M, and later made the Core 2 series based off of it (which of course led to Sandy Bridge, and the rest is history). Intel was very much on a roll for a while and their change in direction served them well enough for Apple to switch from PowerPC to Intel back in the day. But when their 14nm woes began, they turned back to ratcheting clock speeds higher again, and now Intel and AMD are both pushing turbo clocks to 5+ ghz again. The performance can roughly match the single threaded performance of the M1 now, but at MUCH higher power consumption.
To date, nobody besides Apple has really taken the approach that Apple took, with the level of performance that Apple achieved. If people thought it were possible (and practical) to stuff this kind of performance into such a small power envelope, Intel and AMD would have almost certainly have gone for it, but Apple redefined what people thought was practical. Everyone's reaction was like "Holy heavens, what kind of black magic is this?" - and now ARM itself, AMD, and Intel are all scrambling to catch up.
And of course I'm not arguing that everyone actually thought it was truly impossible to do it. Of course not, but obviously a lot of people didn't see it as being practical (at the very least from a profit standpoint) in the consumer market before the M1. Apple changed that. They moved the goalposts by miles in one blow. Huge die-sizes that were previously characteristic of $7000 Xeons are now something that competitors need to think about bringing to the consumer market of everyday i7's, and that changes the game considerably across the industry.
In short, Apple simply raised the bar. It's not much unlike the days when we thought 4.7 inch screens on phones were "large". Companies went this route for a while, but eventually Apple realized that the obvious answer was to make an all-screen phone. Apple almost certainly wasn't the first company to
think of doing this. But Apple was the first company to actually succeed in doing it. And once they did, everyone else quickly followed suit.
Were these companies "afraid" to do it before? That's debatable. That's speculation, and I won't attempt to defend speculation as indisputable fact. But the reality is that none of them actually did it. Apple did. And once they did, they clearly changed game industry-wide.
