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The thrill of Apple silicon is already gone
- Thread starter sam_dean
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Yep - they are grabbing market share as well ----
New research says that ARM-based computers including Apple Silicon are doing fairly well in a collapsing global PC market, as the market does a slow shift away from Intel-based processors. Apple began its move to ARM-based M1 and M2 processors in 2020, abandoning Intel and dramatically improving the Mac.
"The global PC market has been experiencing a demand downtrend after the cooling down of COVID-19 in 2022," wrote ARM's William Li in a blog post. "The market saw its shipments decline 15% YoY in 2022 and is expected to see another high single-digit decline in 2023, according to Counterpoint Research's data."
"However," continued Li, "among all the PC sub-sectors, Arm-based laptops are expected to show a comparatively resilient demand throughout the coming quarters thanks to Apple's success with the MacBook series, increasing ecosystem support and vanishing performance gap with x86 offerings."
According to Counterpoint Research, Apple had 90% of the ARM laptop market in 2022. Also, since the launch of Apple Silicon, the market share of ARM-based laptops has grown from 2% to over 12%.
What are you talking about? Apple negotiated a deal with Intel, to get favorable pricing on product. There was no "licensing" involved. Apple bought Intel CPUs and built MBds around them. They were a customer, not a licensee.
With Apple Silicon, they pay an IP license to ARM and to Imagination Tech, which is probably quite modest in the grand scheme. Their biggest expense is developing the processor, GPU and CP designs for their SoCs. And it is a non-small expense. There is less other crap on the board, because it has been moved into the SoC, which means less effort to lay the board out, but the cost of designing and burning the chips is significant.
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The price changes over the last two years seem to fall below overall inflation rates. The only big price changes were in places like the EU and the UK where currency exchange rates reflected big drops on those currencies.
"Deal" = "licensing fees"
I never seen people so intent on justifying Apple's high prices as people do here.
Nonsense. There were no licensing fees. Apple negotiated for the best price. They bought product from Intel. Apple Silicon, by contrast, was built by Apple, using the expensive design team they acquired when they bought PA Semi and burned first by Samsung, now by TSMC. Designing the chip and getting wafers of it burned is hugely expensive. I concede that Apple's prices seem to be on the high side, but the capital going into the development of the product is non-trivial.
Not to mention that one of the "secrets" of Apple Silicon is that Apple spares no expense in producing these chips either. Very large caches, expensive RAM, custom packaging technology... they even go as far as include large SRAM on-chip to reduce the power consumption of the display controller. Nobody else in the industry does stuff like that as it would push the price of the retail chip beyond any reasonable level. You only find these kind of designs in specialised (e.g. console) or high-end professional (e.g. datacenter) markets.
You're seriously underestimating how difficult it is to design your own* chips and migrating your whole product line (both hardware and software) to that causes some serious initial costs that need to be made back. Long-term, it may be cheaper but getting there is definitely very expensive, especially if factor in the required backwards-compability with Rosetta 2. That's a whole lot of very skilled and therefore expensive people you will need to pay to do just that.
*I obviously know Apple is using ARM designs and TSMC to manufacture them and they are not literally designing their own chip from scratch
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Apple has probably been working on this for years, mitigating the cost over time. It's not like they went from idea to production in a year.
When you use an Intel processor in your computer, you pay them a licensing fee. Apple, Dell, everyone. That is not even up for argument, that is how it works. Apple may have gotten a "deal" on the pricing, but it is still, in the end, a licensing fee. Now, with their own chips, Apple doesn't have to pay Intel diddly for processors.
And after a little googling, Apple pays for ARM licensing fees too, though only cents per chip.
Whut? I bought plenty of Intel CPUs for DYI computer boxes, never had to pay any "licensing fee".
Now we’re moving the goal post, eh?
You said Intel was more expensive than going AS. Now you argue since Intel sales have paid for the R&D, we’re just ignoring those costs and conclude AS is cheaper?
if you do a massive investment like this, you want that investment to pay off which means it has to pay for itself and not just be profitable because you subsidy it with other product sales.
When Apple is buying chips from Intel, they won’t have to worry about development and manufacturing costs though. Especially for “specialized“, non run off the mill chips everybody else is using
This is the first time I hear anything like that. Computer makers buy parts from Intel, I don't understand what they would be paying licensing fees for since they are not licensing anything. Do you have a source for this?
Licensing is for hardware too, not just software. For every sale a PC manufacturer sells, they give Intel (and everyone else they use parts from) a small fee, usually cents or a few dollars. This has been the way its done for decades.
Do you have a source on this? I do not understand why they would need to pay a fee after having bought parts.
Anyway... earlier you were saying that Apple Silicon devices should be cheaper because Apple saves the licensing fee... which you now say is cents or a few dollars. Are you saying that Appel should have reduced the prices by few cents?
No. Intel does charge licensing fees for some IP, such as Thunderbolt and other protocols and software that they still have under patent, but Apple still has to pay for those licenses if they use those protocols. There is no licensing fee associated with putting a CPU onto a board as selling it.
Apple saved $2.5 billion in licensing fees to Intel for it's processors in Macs by switching to their own Mx chips. Forbes said Apple could save an average of $110 per Mac.
Apple also pays ARM a licensing fee for using it's instruction sets for each core.
Any licensing fees were not for the processors themselves but for protocol and software IP that is prettymuch needed to make the CPU competitive.
Back to the topic please! With Apple buying up all of TSMC's 3nm production capacity, we will see sizeable performance increases, which in only a couple of years will make the M1 look useable but slow in comparison. Nonetheless, every new invention turns from magic to boring very quickly. It's human psychology. Before you know it, people protest against NASA wasting money on putting a man on the moon. Why is it not a woman? And why do we go there in the first place, it's all just rocks and scissors! Damn you, Neil Armstrong.
Apple has not been using ARM designs for a while now. Since the A6 the processor cores were designed by Apple. They are pretty much designing their own chips from scratch.
Currency exchange was the excuse. Now that the exchange rate is much better the EU and UK haven’t seen any price drops.
16" M2 Pro MBP starting at 2.999€ in Germany. This includes 19% VAT, so it's 2.520€ for Apple. With the current exchange rate, that's $2.702,41 for Apple.
In the US, the 16" M2 Pro MBP starts at $2.499 (without VAT).
So yes, it's currently about ~8% more expensive in Germany compared to the US but it's relatively tame and within a somewhat normal range, especially considering the exchange rates were worse before. We actually paid less than US customers without VAT for quite some time.
What people often forget is that in the EU, the prices include VAT (usually about 19%) while in the US they don't (because VAT which is typically lower there varies by state and some don't even have it at all)
Besides VAT and exchange rates risks, EU also has more regulations. It adds up. I'm sure Apple's margins in EU is probably lower than it is in the US.