What have you always wondered about the economy? Tell Us

Apple is making its own computer chips

Kristin Schwab Nov 11, 2020
Heard on:
HTML EMBED:
COPY
Apple is ending ties with Intel and will start using its own computer chips in its products. Justin Sullivan/Getty Images

Apple is making its own computer chips

Kristin Schwab Nov 11, 2020
Heard on:
Apple is ending ties with Intel and will start using its own computer chips in its products. Justin Sullivan/Getty Images
HTML EMBED:
COPY

Apple’s goal has always been to set itself apart. Remember the company’s “Get a Mac” campaign?

Even though Macs technically are PCs, or personal computers, Apple differentiated itself back then by running its own operating system. When the iPhone came along, the company’s go-it-alone approach extended even further. The iPhone didn’t just run on Apple’s software, its processor was designed by Apple in house. Now the company can say the same about its laptop and desktop computers. Apple announced Tuesday it was breaking ties with chipmaker Intel, and then unveiled the first Macs to feature the M1 chip, designed by Apple. The move is not just about computing power, it’s about industry power.

Add Apple’s own chip to all of its other one-of-a-kind features, “and that kinda starts to get into more of almost the secret sauce that Apple has,” said Neil Cybart, an analyst with Above Avalon, a research firm that focuses on Apple. “And that is being able to control both the hardware and software.”

That type of control can make it easier for Apple to design computers that keep users inside its ecosystem.

“The device is the Trojan Horse to get you into the ecosystem and hold onto the ecosystem,” said Nick Santhanam at McKinsey & Co.

With the new chip, apps will work across devices, so your iPhone becomes your MacBook and your MacBook becomes your iPhone.

“It gives you literally an extension of your product end to end,” Santhanam said. “And by definition, the consumer and the customers have access to the ecosystem in an identical way.”

It’s hard to know how this will impact the rest of the computer market. Apple usually sets the tone, and other computer makers may be influenced. But they have a long way to go.

“I don’t think that there is a catching up,” said Julie Ask at Forrester.

She said other companies don’t have the money to invest in chip development. So they may push the things that make people die-hard PC owners, like affordability, program integration and the right click on the mouse.

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.