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Apple’s incomplete divorce from Intel (NASDAQ: AAPL)

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An apple (Nasdaq: AAPL) The decision to ditch Intel (INTC) processors in favor of its own custom silicon was a risky gamble that paid off well. Apple’s decision has highly revitalized the Mac product line ARM performance engineering processors that are many times more energy efficient than Intel. Mac revenue growth has been revitalized as well, with Mac revenue growing 23% in fiscal 2021. However, the Mac Pro is still Intel-based, and Apple Silicon Macs are still over-reliant on Intel’s Thunderbolt.

Apple Mac Pro

A Mac Pro based on Intel from Apple. Source: Apple.

The switch from Intel to Apple Silicon has been a huge success

By the time Apple introduced the first Apple Silicon Macs in November 2020, Intel had become a millstone around Apple’s neck. Mac revenue was stagnant. It was very difficult for Apple to build different PCs with the same processors as everyone else.

Apple Silicon Macs got another boost when the new MacBook Pros were introduced in October 2021. In fiscal year 2022 Q1, Mac revenue grew 25% year over year, a faster growth rate than any other product category in that quarter. Mac continued to grow 14.6% year-over-year in fiscal 2022 fiscal quarter, a growth rate second only to services.

Analysts may not have fully realized the impact of Apple Silicon. IDC claimed that shipments of Mac units in calendar 2021 Q4 (Apple fiscal 2022 Q1) only grew 8.6% year-on-year, but this means a significant increase in ASP due to revenue growth of 25%. Gartner also claimed that Mac unit sales increased just 6.2% year over year.

Apple has been careful to price Apple Silicon Macs compared to their Intel predecessors, so I tend to think that analysts underestimate the influence of Apple Silicon. This appears to have continued into Apple’s second fiscal quarter. For the 2022 calendar for the first quarter, IDC estimated Mac unit shipment growth at just 4.3% year-over-year, and Gartner estimated unit shipment growth at 8.6%.

It seems that analysts have not yet accepted the idea that Apple is making serious market share gains in the traditional PC space, but Apple Silicon she has Influenced by the technical media. It’s hard to find a review of an Intel-based laptop that doesn’t compare to the new MacBook Pro. And when it comes to energy efficiency, there is no comparison.

But even Mac Studio leaves something to be desired in graphics performance

I was pleased with the power efficiency and computational ability of my Apple Silicon MacBook Pro, but when I wanted to upgrade my desktop workstation, I skipped Mac Studio to build my own dual Ice Lake Xeon using an Nvidia (NVDA) RTX 3090 graphics card.

Apple Mac Studio

But there is no HDMI 2.1. Source: Apple.

The M1 Ultra in Mac Studio is a clever combination of two M1 Max SOCs. Its CPU processing power is phenomenal, it even outperformed my dual Xeon at Geekbench Multicore. But in graphics, Apple’s claim at launch that it would outperform the 3090 didn’t work.

Several reviewers have discovered this, so I’ll point to one, The Verge:

We ran Geekbench Compute, which tests the power of a system’s GPU, on both a Mac Studio and a gaming PC equipped with an RTX 3090, Core i9-10900, and 64GB of RAM. And the Mac studio was destroyed. It scored less than half the score of the RTX 3090 in this test — not only because it didn’t beat the Nvidia chip, but it didn’t even come close.

It does not approach in most other practical use cases or standards. Apple’s in-house GPU puts every other iGPU in the PC world to shame, but it can’t compete with discrete GPUs that are as big as silicon foundries can make.

In addition to the lack of graphics horsepower, there’s another limitation of the studio that Apple has been a bit conservative about, and that’s the HDMI port. Apple doesn’t mention in its specifications which HDMI version the studio is in, but it appears to be HDMI 2.0.

The latest generation of graphics cards generally support HDMI 2.1. What is the difference? HDMI 2.1 supports 8K displays at 60 frames per second. HDMI 2.0 no. Apple advertises that it can “output” 8K video, but this may simply apply to transcoding within the editing app. You can’t actually watch 8K 60p video or play an 8K display at 60fps using the Mac Studio’s HDMI port, although there may be an unsupported workaround for Thunderbolt.

Since any PC workstation with a current-generation graphics card has HDMI 2.1 built in, I consider Mac Studio’s lack of HDMI 2.1 support almost inexcusable. 8K is clearly the future, and professional videographers have already moved to 8K and 12K cameras and 8K displays. My workstation runs an 8K60p display.

What is taking so long with a Mac Pro?

Which brings us to the much-awaited Apple Silicon Mac Pro, which is supposed to be free of the shortcomings of Mac Studio. I was very disappointed that Apple didn’t preview the new Mac Pro at WWDC. It would have been a logical place they had used in the past for this.

This conveys to me that Apple is still struggling with what the new Mac Pro should be. I think Apple would like the SOC design to be all-in-one, possibly with multiple chips.

Current technology has converged on the CPU and GPU being separate chips in separate packages. Even the most advanced design concepts for supercomputers still use this basic division of labor.

So, if Apple wants to build a truly competitive professional workstation, you’ll probably need to figure out how to fit a discrete GPU into your Mac Pro. Along those lines, Apple also has to decide whether to support third-party GPUs.

When Apple first introduced the Mac Studio, they announced that the Mac Pro was still on its way (by reassurance) and that the M1 Ultra would be the last of the M1 series. To me, this indicates that by then (March 2022) Apple had realized that the current M1 series would not be suitable for a future Mac Pro.

More advanced future SOCs in the M2 series are expected to address the architectural issues they’ve raised: more capable graphics support, more advanced rendering capability, and hopefully larger CPU cores. The way Apple resolves these issues may still be in doubt within the company.

In the meantime, Apple has to contend with the Xeon-based Mac Pro, which Apple underestimates every chance it gets in favor of Apple Silicon:

Apple Silicon Comparison

Source: Apple.

Apple’s over-reliance on Intel’s Thunderbolt

So far, every Apple Silicon Mac has used Thunderbolt as their primary interface to the outside world. But Thunderbolt is Intel’s proprietary technology, and every Mac Thunderbolt port has an Intel chip behind it.

This is another area where the divorce from Intel is incomplete, and provides an explanation for the limitations of HDMI, not only in the Mac Studio, but in every other Apple Silicon Mac that offers HDMI.

Apple seems to be driving HDMI video through Intel Thunderbolt interface chips. Thunderbolt 4 beats a data rate (40 Gbit/s) just shy of what’s needed for HDMI 2.1, so Apple can’t support HDMI 2.1 without completely changing data paths and creating a separate interface for it.

While the limitations of Thunderbolt may be acceptable for the M1 series of Macs, it would obviously be a disaster to limit the Mac Pro’s external interface to Thunderbolt. Apple tried it out with a cylindrical Mac Pro, and we all know how it worked.

There may have been some thought going this way and marketing what would become the Mac Studio as the new Apple Silicon Mac Pro. I’m sure that once they got the hardware in front of some focus groups, they quickly realized that power users would expect a workstation with PCIE expandability.

Apple should shift the focus of its interface from Thunderbolt to PCIE. PCIE is more versatile than Thunderbolt, and PCIE Gen 5 will be faster for lanes x2 and above. Almost every computer interface you can think of, USB, Ethernet, Wi-Fi, and graphics are ultimately driven by PCIE.

Building PCIE into the next generation of Apple Silicon will not only free it from reliance on Intel Thunderbolt, but will configure it to support the kind of Mac Pro that power users want. This is an area where Apple should go with the flow. All modern x86 processors support on-chip PCIE interfaces.

Ready Meals for Investor

The combination of performance and efficiency shown by Apple Silicon is truly unparalleled, however I realized that Apple would need to do more to win a larger share of the PC market.

Intel’s incomplete divorce points to some soft spots in Apple’s Silicon approach. It may not be technically possible to create an internal GPU that is truly competitive with a discrete GPU. But Apple needs to provide this level of performance by some means.

Thunderbolt is a very useful, convenient and easy-to-use interface, but it is somewhat limited compared to PCIE. PCIE’s bandwidth advantage isn’t going away anytime in the near future.

If Apple adopts PCIE, it will have a direct path to solving its GPU needs and to provide a more capable interface for all of its Mac products. With PCIE, Apple can finally complete its divorce from Intel, and continue to increase market share for Apple Silicon Macs. I still long Apple and worth the wait.

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