Apple's Tim Cook in a virtual event on Tuesday
For years, Apple’s investors have looked for the next big thing, that growth engine that will repeat the success of the now-13-year-old iPhone. They probably did not expect it to come from the company’s oldest product.
Mac computers – a line that dates back to 1984 – have not been seen as Apple’s future since 2001, when the iPod and iTunes paved the way for the powerhouses of the iPhone and Apple’s gigantic digital services business.
But this year, the Mac has staged a resurgence. In the third quarter of 2020, sales rose 29pc to $9bn (£6.8bn), a record sum that made the division Apple’s fastest growing product category. And on Tuesday, the company unveiled the biggest change to the line in over a decade, announcing three new Macs that, for the first time, include Apple’s in-house processors rather than those designed by chipmaking stalwart Intel.
The Apple-designed “M1” chip, which is based on processor architecture from Britain’s Arm, claims to deliver performance up to five times faster than rival machines. Johny Srouji, who runs efforts on “Apple Silicon”, said the chip provided the best per watt of any computer processor on the market. “The M1 can deliver the peak performance of the PC chip, while using just a quarter of the power. This is a big deal,” he said.
Apple q3 sales by division
The performance improvements may be lost on potential buyers. But the battery claims will not. Apple said its new £999 MacBook Air would last 50pc longer than its previous version when watching video, and twice as long on video calls. The £1,299 MacBook Pro will last 20 hours watching video, 10 hours more than before.
Because Apple is using its own chips, rather than off-the-shelf Intel components, rivals will find it harder to match it. The releases build on years of work on the homemade chip designs used in the iPhone and iPad. The new models – as well as the laptops, Apple also released a version of its miniature desktop computer, the Mac Mini – represent the culmination of a reversal in fortunes for the Mac, which Creative Strategies analyst Carolina Milanesi says was until recently seen as Apple’s “forgotten child”.
The initial success of the touchscreen iPad, released in 2010, led to predictions of a “post PC” era. In 2015, Apple’s chief executive Tim Cook told The Telegraph that he travelled with his new iPad Pro, instead of a laptop. Meanwhile, the company’s computers seem defined by form more than function, resulting in complaints from the legions of filmmakers, photographers, musicians and developers that have long been loyal to Apple, as well as regular users.
A 2013 redesign of the company’s most expensive computer, the Mac Pro, created a unique cylindrical shape, quickly dubbed the “trash can”, that created myriad performance issues. It ultimately prompted a semi-apology from a company not used to giving them. Its laptops faced years of complaints for a troublesome “butterfly” keyboard switch design, which allowed them to be smaller, but meant they would often stick.
“We thought we had forgotten about the Mac when iOS [the iPhone and iPad’s software] was getting all the attention. They tried to position the iPad as kind of the future of computing. And that didn’t really work out,” says Milanesi.
Gradually, Apple has fixed those problems, including the MacBook’s unreliable keyboard. The pandemic has also given sales a shot in the arm, as employees and students have been forced to work from home. Sales of PCs – both Windows and Mac – hit a record high in the third quarter of the year, up 14.6pc to 81.3m, according to IDC.
Apple's lineup of new Macs
Apple’s share of that is estimated at just 8.5pc of that, less than its share of smartphone, tablet and smartwatch sales, even after the Mac’s recent improvement. The rise of Macs running Apple’s M1 chips could well change that, however. Unlike the iPad and iPhone, which boast an array of exclusive apps, the Mac has often found itself hard to differentiate.
It has rarely been a choice for video gamers, and many consumers who use computers for web browsing, email and social media might see little reason to spend extra. But since the M1 chip is based on similar designs to the Apple processors in its other products, they will instantly be able to run iPhone and iPad apps, potentially giving consumers a new reason to buy the new Macs.
“Compared to Apple iPhones, iPads, AirPods, and [Apple] Watch, the Mac has underperformed,” says Patrick Moorhead of Moor Insights and Strategy. “Given these challenges, the company has decided that the best strategy to help fix this issue is to make the Mac more like the iPhone and iPad.”
Milanesi expects it will also lead more developers to create apps for the Mac. “The advantage of the iPad was that there’s not really a lot more work that you need to put in if you’re already developing for the iPhone. But for the Mac, when you’re talking about an average [sales] of 5m a quarter, who’s going to put a lot of effort into app development for that kind of volume? Now they have a way of pulling it together.”
The rise of “Apple Silicon” also helps the company in another way. Chris Caso, an analyst at Raymond James, estimates Apple was spending up to $4bn a year buying chips from Intel, much more than it will cost to make its own. The cost saving alone might be seen as a reason for the company to chart its own path. But Apple most likely has bigger ambitions than that for the Mac.