Apple’s new in-house chips look to be a solid challenge to the older Windows architecture. Apple had already enjoyed robust success with its initial in-house offering the M1 chip in late 2020, which it used to replace Intel chips it had previously been using.
Now the new M2 chip which will be offered in the new MacBook Air and the 13 inch MacBook Pro looks to offer 25% more transistors, and 50% more bandwidth.
Mikako Kitagawa, an analyst at technology industry research company Gartner believes Apple will continue to erode market share from Microsoft with the new M2 architecture.
As of 2021, Microsoft held 81.8% of worldwide PC shipments by operating system, while Apple held only 7.9%. Kitagawa believes the new chip will probably cause Microsoft’s share to drop to 80.5%, and Apples share to rise to 10.7% by 2026.
Apple has enjoyed many benefits since switching from the older Intel chips it used previously, to the newer M-series chips. In addition to growing market share, Apple’s newer devices with the new chips have enjoyed longer battery lives, and a plethora of processing power.
Meanwhile on the sales front, Apple has seen immense growth. Mac sales have increased to over $35 billion in sales in 2021, a 23% rate of growth. Mac sales grew 14% just in the March quarter. In April, Apple CEO Tim Cook said to investors, “the incredible customer response to our M1-powered Macs helped propel a 15% year-over-year increase in revenue despite supply constraints.”
The majority of Microsoft’s revenue comes from software licenses it sells to computer manufacturers, such as HP, Dell, Lenovo, or other manufacturers. Those licenses provide 7.5% of total revenue and 11% of gross profit to the company, according to Morgan Stanley analysts. Losing market share to Apple will tangibly reduce those revenues. However there is an even bigger problem as consumers begin using Apple systems.
Brad Brooks, CEO of cybersecurity start-up Censys and formerly corporate vice president for Microsoft’s Windows consumer business notes that those consumer computers become what people are used to using, and that can bleed over into every other sector of computing. “Once they start using a different product set in their home environments, they’re more likely to adopt that environment in their professional settings,” Brooks said, speaking of those who decide what computer systems companies will use. One consumer can alter an entire company’s purchasing preferences. Brooks and all of his employees use Macs as their primary systems.
Patrick Moorhead, CEO of industry research company Moor Insights and Strategy, said Apple still has other options to compete even more aggressively. He imagines an $800 or $900 Apple MacBook SE, instead of the $1,199 M2 Macbook Air.
Moorhead said, “A MacBook SE at a much lower price point would disrupt Windows in a pretty big way.”
