ARMs Race Risc: Episode 1, Apple and Microsoft

Right now could be a bad time to invest in technology and buy a new computer. I suggest that, right now, all Apple laptops are in a state of flux, and no Microsoft Surface tablets or laptops make sense. This is all due to the ‘ARMs race to new computer architecture, as an upheaval in technology is poised to change the industry.

  • Introduction
  • Apple: Half-Baked Arms?
    • Products In Transition.
    • Transition: Locked In and Underway.
    • When To Buy An Apple Computer?
  • Microsoft: End of the Surface Pro?
  • The Disruption: Vertical Integration.
  • In coming Episodes:
    • Why Microsoft needs RISC (March 16th)
    • What are RISC and ARM?
    • Can the Empire Strike Back?
    • Amazon & Google.
    • Gaming Computers & Workstations.
    • Dell, Hp, Asus etc.

Introduction.

It is a period of change. After conquering the mobile device market, RISC/ARM computer chips are poised to now take over laptop, desktop and server computers, with the giants of the industry: Apply, Microsoft, Amazon and Google all set to play a role. The implications for the computer industry are widespread.

This episode looks at how moves by Apple and Microsoft have each revealed one half of changing the world of laptops and desktop computing, but neither has at this time put both halves to together, leaving product lines poised in a state of disarray.

Apple: Half-Baked ARMs?

Apple: Products In Transition.

Right now, the Apple computer range has three groups of products:

  • Intel CPU based devices that are to be replaced with ARM based models.
    • Remember power PC? Why by a computer that runs software that will become an orphan?
  • Proof of concept half-baked ARM MacBook Air and 13-inch MacBook Pro.
    • Two ARM Based laptops, half-baked without optimisation of design to realise the potential laptop of ARM
  • Mac Mini with an ARM CPU.
    • A niche product, but a solid product if it is your niche.

Apple ARM computers use an ARM CPU, designed by and proprietary to Apple, following the business model of CPUs for iPhones and iPads, in place of ‘off the shelf’ Intel processors used in previous Apple computers.

Apple revenue is now predominantly from the mobile sector where not only are more devices sold, but all software also earns an ‘Apple tax‘. But computers still mater, and given the strength of Apple marketing, they will find a way to minimise any pain from having products in a state of flux.

The Transition: Locked In and Underway.

Apple started designing their own ARM based computer chips together with the iPhone back in 2007, but at that time, the needs of phones and computers were seen as quite different, with phones having less computing power, and needing to run on far less power.

Apple announced they are making a complete migration for their computers from Intel CPUs, to ARM based CPUs in November 2020. At that time they announced their first ARM computer chip, and first computers running those chips.

The Mac transition to Apple Silicon is the process of changing the central processing unit (CPU) of Apple Inc.‘s line of Mac computers from Intel‘s x86-64 chips to Apple-designed chips that use the ARM64 architecture.

In the months and weeks leading up to Apple’s 2020 WWDC, multiple media reports anticipated an official announcement of the transition during the event.[26][27]

On November 10, 2020, Apple announced the Apple M1, its first ARM-based processor for the Mac, alongside updated models of the Mac MiniMacBook Air and 13-inch MacBook Pro based on it

Wikipedia

The Apple M1 computer chip was a shock to the industry, significantly outperforming rival Intel and AMD traditional CISC computer chips. The first Apple computers using these chips, simple ‘drop in’ the new computer chip into old design computers and do nothing to leverage the potential changes to the design of the computers using the new chip. These devices show that ATM is not just better packaging connectivity and about battery life, and provide the proof that Apple can deliver on performance, addressing the question mark about the performance of ARM products. However, focused purely on the question mark over performance, and avoiding the distraction of the better packaging and connectivity, makes these devices the opposite Microsoft Surface Pro X, which so far delivers on the packaging and connectivity, but fails to on the question mark over performance. These models can, and subsequently will become, more elegant and better connected.

When To Buy An Apple Computer?

In summary, with the exception of the Mac Mini, the entire Apple computer range has reasons why waiting, rather than buying now, makes sense. The ARM laptops still need a facelift, and the other laptops are in some ways using technology now obsolete. But I would expect computers released in 2021 to solve the problem. Of course, phones and tablets drive far more total revenue for Apple than computers do now, so even if Apple’s fantastic marketing cannot avoid any drop in sales, the bottom line will still be fine, but there could be some great deals too.

Microsoft: End of the Surface Pro?

Microsoft: Products That Are In Need Of A Transition.

Casting the same critical eye over the Microsoft computer products reveals:

  • The Surface Pro X.
    • Delivering on the packaging and connectivity of ARM, but with serious performance restrictions.
    • Without a significant new CPU, for many applications the Pro X is underpowered as a replacement for the Surface Pro.
  • The Surface Pro.
    • With the appearance of and end-of-life product, waiting from the Surface Pro X to take over.
    • Latest version, “Surface Pro 7 plus” is not sold through many normal channels and “only released for business”.
  • The Surface Book and Surface Studio
    • With Packaging that needs RISC/ARM technology to move forward
  • The Surface Laptop.
    • The least exciting product, but solid for what it is.

The Surface Pro X computer is based on an ARM CPU designed by Qualcomm although Microsoft used a version customised for their use, the Microsoft version based on a Qualcomm CPU available to all customers. All other Microsoft products use ‘off the shelf’ CPUs.

The reasons it is so critical Microsoft does launch ARM products will be explored in Episode II.

Surface Pro: In Limbo?

Microsoft Surface products are a critical point, with an appearance of indecision at this time as to whether the future lies with ARM based Surface Pro X, or the traditional Surface Pro.

The latest version of Microsoft’s anchor Surface Pro computer, the Surface Pro 7, was released back in October 2019, together with the launch of the ARM based Surface Pro X. A Surface Pro 8 has been expected by now, but instead things have stalled.

Microsoft has twice delayed releasing a Surface Pro 8, with no update to the Surface Pro announced in October 2020, when other updates were announced, including a mild update to the Surface Pro X. The mild update to the Surface Pro X sounded promising. Surely if only updating that model, there would be a new Pro X as fast as a surface pro! After all, Apple has shown it is possible. But the Pro X update was nothing, and many claim nothing changed. The CPU supplier, Qualcomm, did update the base CPU for the Pro X, but it turns out the update was to allow WiFi 6 and 5G mobile, neither a feature Microsoft was looking for, so the update achieved nothing. Certainly no Surface Pro alternative.

Then, in the clearest indication something is new is happening, in January 2021, an update to the Surface Pro was announced, but it was labelled the Surface Pro 7 plus and only made available to business customers. Microsoft announced this model was suitable for business customers requiring the same form factor as previous Surface Pro models. This strongly suggests what ever comes next, will be in a new physical case, and signalling to consumers, “perhaps wait”.

What Next: End Of Surface Pro? SC8280XP?

Either Microsoft fit Intel style components in the Surface Pro X case, or they release an ARM Surface Pro X with performance that exceeds the Surface Pro 7 plus. Microsoft must deliver on one of these options. Many articles cry out for the first option, an Intel type Surface Pro in the Pro X case, but I doubt this is what Microsoft want. The software is finally able to (just) support ARM sufficiently, but what about the CPU? The current supplier, Qualcomm, does have faster technology, and there are tests of them putting, and testing something faster in a laptop processor form, but how soon will the SC8280XP be released , and will it be fast enough? There are also reports Microsoft is designing their own ARM CPU, which would allow control of their own destiny, putting them on equal footing with Apple, but that may take even longer. This is explored far more in episode 2.

I suggest the next step, provided the ‘SC8280XP‘ proves fast enough, will be a new ‘Surface Pro X’, possibly even the ‘Surface Pro XI’?, and be released together with the production release of the ’64 bit emulation’ in Windows. Provided performance matches the Surface Pro 7+, this will signal the end of the Intel style Surface Pro, most likely to announced in May 2021. As more information ‘surfaces’, I will add it here.

And More: Surface Book and Studio?

Both the Surface Book and Surface studio receive mixed receptions, with a limitation for both units being the power of their CPUs that must fit in small spaces with limited heat dissipation.

And here lies the Surface Book 3’s achilles heel. There’s no room in the design to allow today’s top-end specifications that are needed by creatives. The defining feature of the detachable screen to offer a Windows 10 tablet means that the screen assembly has to act as a complete standalone Windows 10 machine. Given the expansive screen and the requirement to be as thin and light as possible, the design is limiting the technology that can be integrated.

Forbes Review.

Unlike a conventional laptop with ample room for the CPU under the keyboard, the detachable display of the Surface Book must house the CPU in the thin space behind the display.

Question: How can you get far more computing power in a thin and light form? Answer: An RISC/ARM CPU. While a Qualcomm SC8280XP could also be used, the Surface book could easily wait 12 months for an update, so there may be more choices.

To have a future, the thin and light form of the Surface Book needs a way to house far more computing power, and an ARM style CPU is the way to deliver. The U-Series, 15w-28w notebook CPUs are not a performance option.

The Surface Studio is a beautiful computer with an fantastic touch, pen sensitive, screen. But the elegant minimalist design sitting in the base, also suffers suffers from being too small to dissipate the heat from anything beyond what is again a notebook CPU, although with more space, this time there is a i7-7820HQ 45 watt CPU. The Studio is expensive, and also needs something faster, and to exist in that compact designer base, this CPU must also be light, and more power efficient than typical desktop CPUs. Again, ARM could come to the rescue, and this time an ARM server CPU, which probably rules out the Qualcomm SC8280XP.

Both Surface Studio and Surface Book really need more computing power than is acceptable for the highly portable and less expensive Surface Pro. The same CPU that can enable the Surface Pro X to take over from the Surface Pro, might only be a start and offer life support to the Surface Book and Studio.

When to Buy A Surface?

It depends on the model.

For the Surface Pro, or Pro X, unless there is a really great deal, I would be waiting. Something has got to give on the ‘limbo’, most likely by May 2021.

The Surface Studio 2 was released in October 2018, with a 7th Gen i7 processor while the 11th Gen is now available, a significant discount would be needed to make a Studio and attractive purchase at this time.

The Surface Book 3 was released in October 2020 with a 10th Gen i7  i7-1065G7 15 watt processor, and is therefore relatively up to date, but that U series processor is almost 1 year old and, although certainly capable, there is much more speed available for the price and only the tablet mode flexibility the features of the Surface Book make it relevant to those who want those features. If the Surface Book is what you want, it will probably not be replaced by an ARM model before late 2022. An ARM Surface Book makes sense, but it is not urgent as with the Surface Pro.

The Surface laptops are up to date, and make as much sense as any laptop right now. If you keep notebooks for over 3 years, then now may not be right time to buy any laptop, but conventional laptops such as the Surface laptop could remain with Intel/AMD for many years.

The Surface go? Read reviews, as it outside my firsthand experience.

The Disruption: Vertical Integration.

ARM vs Intel: The Supply Chain Difference.

So ARM or Intel, why does it matter?

There are two key differences:

  • How the CPUs work: RISC vs CISC
  • The Supply Chain.

The technology and RISC for CISC I will leave for later, this section is about the supply chain.

Intel and AMD producing competing, off the shelf CPU chips which they sell to the computer industry. This means any company who wants to make a computer using these chips can buy the same CPU as anyone else, but they must buy the Intel compatible CPU from Intel or AMD.

Why these two companies, Intel and AMD, and only these two?

Because to become a supplier of Intel compatible chips, you have to get Intel to agree to let you copy their design. In short, Intel did this once, because it was a condition of contract with IBM at time that two companies could make the chips they use, and as that contract was critical to Intel it resulted in an agreement for second supplier and from then on, there has been a duopoly, where is AMD is also allowed to make Intel compatible chips. But no one else can.

On the contrary, to be a supplier of ARM chips, or RISC-V or other RISC chips, you just get a licence, because ARM (and RISC-V) are in the licensing business, not the chip supplying business. See articles like A company that doesn’t really make chips dethroned Intel with super savvy business moves, for more details, but the bottom line is ARM sells intellectual property as their product, not manufactured goods.

This sounds good. Instead of a duopoly, there is a more open marketplace. But, it is not necessarily quite as open as it seems.

ARM licences the design of CPU ‘cores’, but an ARM based CPU chip needs much more than a core. If fact, it will normally have several cores, and memory and other significant circuitry. Different companies, such as Qualcomm, Apple, Samsung etc licence core designs from ARM, and design and build CPU chips in much the same way Intel and AMD do with Intel style CPUs. But not all of these chips are equal, while Qualcomm is in the chip business, Apple is not. Apple is entirely its own customer.

The end result is that Apple has a unique chip, that it has a monopoly on. So if that chip, made by the richest company in the world, can be superior, perhaps not just the chip market, but the entire ‘devices built on fast CPU chips’ market, could become a monopoly.

Vertical Integration.

Vertical Integration is where a company starts doing something itself that is was previously ‘buying in’. This can be everything from a manufacturer owning its own factories instead of contracting that work, to as in this case, making a component instead of buying that component.

The motivations for vertical integration include:

  • Why allows others to earn the profits from supplying you when you could earn those profits.
  • Risk reduction, avoid supply chain risks by controlling the supply chain.
  • Control any component that provides a key competitive advantage.

But it is not all roses, otherwise everyone would do it. Key disadvantages of vertical integration include:

  • Established distribution channels may be adversely affected
    • Relates to adding direct sales channels.
  • Unprofitable outcome
    • The investment required may not be justified.
  • Obsolescence due to new technologies.
    • It is easier if you can change suppliers.
  • Higher cost due to lower volume.
    • Critical in tech where design costs are so much of the price.
  • Unforeseen labor issues
    • Relates mostly to manufacturing.
  • Loss of continuing focus on the originating business.
    • Which part of the business is most critical? Focus on that!

In technology, it is not just higher costs due to lower volume, it can also be inferior product due to lower volume. With some technologies, like silicon chips, it is hard to compete with the ‘big guys’. However in Apple’s case, they are one of the big guys. In theory, an independent chip supplier can make the best, most cost effective product as they sell to everyone. To be able to compete with one company supplying the whole industry, you may need to approach 50% market share. What percentage of the market for phones with a premium CPU does Apple have? The huge base of iPhone CPUs gives Apple the volume.

For Apple’s huge mobile phone revenue base, having a top tier CPU is critical, but as they have the volume, and the budget, they may even be able to dominate.

The Business: Potentially from Duopoly to Monopoly?

So ARM and other RISC designs can be open to anyone to make, you have to start from the beginning and design the CPU core for all your designs as well as the chips built on those cores, plus you have to do so in way that is not considered copying. . The barrier to entry is

What is different, is that Apple for example can design its own CPUs that are not available to anyone else. You might think given the Qualcomm has more volume than Apple, they would have a cost advantage, but to Apple, an extremely rich company, there is so much at stake for having a fast CPU that they can outspend a vendor such as Qualcomm.

This can mean the fastest CPUs are no longer available to anyone. The company with the largest revenues from devices can perhaps spend more than the market price, in order to secure market position for the entire business. So the ‘Apple tax‘ can fund Apple spending more on the CPU.

The potential change is that the fastest CPUs may stop being available to everyone, and just the domain of the huge tech companies such as Apple, Microsoft, Amazon, Google etc….. one market dominance may be able to buy more market dominance. Except, how do Microsoft, Amazon, Google etc, generate the volume use of CPUs needed to compete with the likes of Apple?

Return to the 1970s?

Before the IBM PC and the Microprocessor, IBM Dominated Computing. Before microprocessors, each company made its own processors just as may happen again in the age of RISC CPUs. Only difference is the old processors were made from a large number of individual components. IBM, the richest computer company, was in that situation of the largest budget allowing a level of dominance. Other industry player had to find niches where IBM was not playing. However, computers were not the ubiquitous devices they are today, and being the largest tech company did not mean being as rich as it does today.

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