Apple – Chugging along.

M3 does not wipe the floor with Elite X.

• Apple launched its next series of M-chips but even though they will all be made on the new 3nm TSMC process, the degree of improvement over M2 is lower than I was expecting keeping Elite X very much in the game.
• Apple held a short event where it launched its M3 family of chips (M3, M3 Pro and M3 Max) as well as new MacBook Pros and a new iMac.
• The M3 family moves to the 3nm TSMC process and while there were some improvements to the CPU, most of the improvements were in the GPU.
• This is why Apple verbally and in its press release (see here) made its comparisons to the M1 as the M3 is really only an incremental improvement over the M2.
• The M3 family offers a 15% improvement over the M2 family in the CPU and a 1.8x improvement in the rendering in the GPU.
• The GPU upgrade has more to do with new design techniques and hardware acceleration than it has to do with a straight performance upgrade due to moving to a new node and making the transistors smaller.
• I think that this is going to be most of the story of silicon performance improvements from here on.
• However, the efficiency cores of the M3 offer a 30% improvement in performance and so it is not unreasonable to expect the new MacBook Pro products will see an improvement in battery life.
• Apple is now touting 22 hours of battery life under optimal conditions which is incremental to the M2 but a whole order of magnitude when it comes to an Intel-based MacBook Pro.
• These incremental improvements are why Apple is aiming these new MacBook Pro products at users who are still using Intel-powered MacBook Pro.
• It is also very cleverly introducing a new colour (space black) so that diehard Apple fans will be able to show that they have the latest and greatest without having to say a word.
• This is because it is going to be pretty hard to make a compelling case to upgrade to a new MacBook Pro from one based on M2 or M1 unless the user is running them as hard as they can.
• Given how good these machines are, I suspect that there are very very few users who do that and certainly not enough to change the shipment numbers even if they all upgrade in the next 12 months.
• Consequently, this is an upgrade for those still running Intel-based MacBooks and iMacs and those who simply have to have the latest product that Apple offers and Apple’s message clearly reflects that.
• Having looked at the M2 Max compared to the recently announced Snapdragon Elite X (see here), one can conclude that the M3 is going to be marginally faster than the Elite X but there will not be much in it.
• This is surprising as it implies that Qualcomm has managed to immediately jump into contention for the lead in Arm-based processors despite the Elite X being a 1^st generation product.
• The general view was that Qualcomm would start somewhat behind and catch up with subsequent generations but if Qualcomm’s test numbers prove to be accurate, this is not what has happened here.
• Assuming that Microsoft and Qualcomm manage to migrate the Windows ecosystem onto Arm as well as Apple did (big if), then there will be a strong incentive for laptop users to upgrade from Intel or AMD to an Elite X laptop in 2024.
• This event is yet another sign of what Nvidia constantly claims which is that Moore’s Law has well and truly ground to a halt and the future is likely to be more about technical tricks and acceleration to improve performance from here.
• Apple is still the leader in silicon design, but Qualcomm has entered the race at a sprint meaning that Intel still has everything to do.
• The medium growth story between Apple and Qualcomm is starting to rotate with Apple losing share in China and Qualcomm opening up new market segments within a reasonable time horizon.
• With one almost twice the multiple of the other, it is pretty obvious which one to pick.
• I have a position in Qualcomm.