Apple's Newest Homegrown Chips Pose a Threat to Microsoft's Windows Business

Apple recently announced new laptops that featured the company's own next-generation in-house chips. Though they are good news for the company managed by Tim Cook, they aren't good news for Microsoft's lucrative windows business. Read on for the details.

Apple started selling Macs that its homegrown M1 processors powered in 2020. Since then, the brands' computer business has been growing. A few days back, the company introduced the M2, a new chip that will be present in the new MacBook Air and 13-inch MacBook Pro. It will be better than M1 as it will include 25% more transistors and 50% more bandwidth than the previous chip.

The Mac business of Apple has also been revived by new devices that have the company's own chips and have replaced processors from Intel. The first of such devices was MacBook Air, which was released in 2021. It was followed by updated models of the MacBook Pro, iMac, Mac Mini, and a new model for power users called Mac Studio.

The newer devices from Apple have longer battery lives than their Intel-based counterparts. They also have the additional processing power. Sales have increased as Apple's Mac business grew by 23% in fiscal 2021 to over $35 billion in sales.

This isn't great news for Microsoft, as most of Microsoft's Windows revenue comes from licenses it sells to Lenovo, Dell, HP, and other device makers. According to Morgan Stanley analysts, it constitutes about 7.5% of Microsoft's total revenue and approximately 11% of gross profit  

According to the CEO of cybersecurity start-up, Censys and formerly corporate vice president for Microsoft's Windows consumer business, Brad Brooks, as Microsoft loses market share, "a lot of pricing control is lost in the marketplace. "

Most revenue from Windows licenses to device makers comes from commercial customers. Brooks said Apple is making headway among consumers. He also stated that during his tenure at Microsoft, he realized that there is a positive correlation between consumer use and what happens at work.

Talking about the corporate leaders who make technology buying decisions, Brooks stated, "Once they start using a different product set in their home environments, they're more likely to adopt that environment in their professional settings. "

Though businesses were slow to adopt the M1 computers as they thought the key apps wouldn't be compatible. However, Adobe, Microsoft, and other key developers came out with native software versions for the devices.

The CEO of industry research company Moor Insights and Strategy, Patrick Moorhead, said Windows PCs could eventually have performance and battery life that match apples latest Macs. Talking about the chipmakers they use, he said, "it's closer right now between Apple and AMD than it is between Apple and Intel."

Moorhead also thinks that Apple might launch a MacBook SE that would cost less but work fine, just as iPhone SE does. He said, "A MacBook SE at a much lower price point would disrupt Windows in a pretty big way."


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