Why Apple saddled the MacBook Air with "gimped" CPUs

1. The current technology is overshooting the needs of the mass market.

Due to a development trajectory that has followed in lockstep with Moore’s Law, and the emergence of cloud computing, the latest generation of x86 processors now exceed the performance needs of the majority of customers. Because many customers are content with older generation microprocessors, they are holding on to their computers for longer periods of time, or if purchasing new computers, are seeking out machines that contain lower performing and less expensive microprocessors.

2. A new technology emerges that excels on different dimensions of performance.

While the x86 architecture excels on processing power – the number of instructions handled within a given period of time – the ARM architecture excels at energy efficiency. According to Data Respons (datarespons.com, 2010), an “ARM-based system typically uses as little as 2 watts, whereas a fully optimized Intel Atom solution uses 5 or 6 watts." The ARM architecture also has an advantage in form factor, enabling OEMs to design and produce smaller devices.

3. Because this new technology excels on a different dimension of performance, it initially attracts a new market segment.

While x86 is the mainstay technology in PCs, the ARM processor has gained significant market share in the embedded systems and mobile devices markets. ARM-based processors are used in more than 95% of mobile phones (InformationWeek, 2010). The ARM architecture is now the main choice for deployments of Google’s Android and is the basis of Apple’s A4 system on a chip, which is used in the latest generation iPod Touch and Apple TV, as well as the iPhone 4 and iPad.

4. Once the new technology gains a foothold in a new market segment, further technology improvements enable it to move up-market, displacing the incumbent technology.

With its foothold in the embedded systems and mobile markets, ARM technology continues to improve. The latest generation ARM chip (the Cortex-A15) retains the energy efficiency of its predecessors, but has a clock speed of up to 2.5 GHz, making it competitive with Intel’s chips from the standpoint of processing power. As evidence of ARM’s move up-market, the startup Smooth-Stone recently raised $48m in venture funding to produce energy efficient, high performance chips based on ARM to be used in servers and data centers. I suspect we will begin seeing the ARM architecture in next generation latops, netbooks, and smartphones (e.g., A4 in a MacBook Air).

5. The new, disruptive technology looks financially unattractive to established companies, in part because they have a higher cost structure.

In 2009, Intel’s costs of sales and operating expenses were a combined $29.6 billion. In contrast, ARM Holdings, the company that develops and supports the ARM architecture, had total expenses (cost of sales and operating) of $259 million. Unlike Intel, ARM does not produce and manufacture chips; instead it licenses its technology to OEMs and other parties and the chips are often manufactured using a contract foundry (e.g., TSMC). Given ARM’s low cost structure, and the competition in the foundry market, “ARM offers a considerably cheaper total solution than the x86 architecture can at present…” (datarespons.com, 2010). Intel is loathe to follow ARM’s licensing model because it would reduce Intel’s revenues and profitability substantially.

In short, the ARM architecture appears to be in the early stages of disrupting x86, not just in the mobile and embedded systems market, but in the personal computer and server markets, the strongholds of Intel and AMD. This is evidenced in part by investors’ expectations for ARM’s, Intel’s and AMD’s future financial performance in the microprocessor markets: today ARM Holdings has a price to earnings ratio of 77.93, while Intel and AMD have price to earnings ratios of 10.63 and 4.26, respectively.

For Intel and AMD to avoid being disrupted, they must offer customers a microprocessor with comparable (or better) processing power and energy efficiency relative to the latest generation ARM chips, and offer this product to customers at the same (or lower) price relative to the ARM license plus the costs of manufacturing using a contract foundry. The Intel Atom is a strong move in this direction, but the Atom is facing resistance in the mobile market and emerging thin device markets (e.g., tablets) due to concerns about its energy efficiency, price point, and form factor.

The x86 architecture is supported by a massive ecosystem of suppliers (e.g., Applied Materials), customers (e.g., Dell), and complements (Microsoft Windows). If Intel and AMD are not able to fend of ARM, and the ARM architecture does displace x86, it would cause turbulence for a large number of companies.

I just posted this as an article to HN: "The End of x86?" I'd appreciate an upvote. Thank you!

> MacBook Air weighs less than three pounds, but it’s a heavyweight where it counts. Intel Core 2 Duo processors get the work done fast. So you can be every bit as productive on MacBook Air — but in more places. Live-blog the event of the year straight from the convention floor. Perfect your sales-winning presentation from the airport terminal. Cite references down to a T from the library stacks. MacBook Air lets you do everything you need to do whenever and wherever it needs to be done.

Everything you need to do, such as writing, writing, and writing. Those examples seem like they would be more appropriate if Apple had chosen an Atom processor. They don't exactly instill me with 'heavyweight where it counts' confidence.

The big performance story is the GPU and SSD.

For the majority of Air buyers, their new machine will feel quicker than any computer they've every used, by simple merit of the SSD. Cold boot times of 15 seconds are being reported and programs will load with similar haste.

The GPU is a big deal, both for graphics performance and OpenCL. OS X has always leaned heavily on the GPU. With the introduction of Snow Leopard, the vast floating point performance of the GPU is available to the whole system. If you've been following the Folding@Home project, you'll know how big a deal that is. Of course third-party developers are proving fairly slow to make use of it, I will bet lumps of my own flesh that iLife 11 will be heavily optimised for OpenCL.

We've already mostly dispatched with the megahertz myth, but we're going to have to confront the idea that CPU speed is a relatively minor part of real-world computer performance. The old Air felt miserably slow, mainly due to hard drive throughput. The new one will feel very fast indeed, in spite of a relatively modest CPU.

All of this fighting between Intel and Nvidia is really only hurting customers; namely Apple. So what can Apple do? Create an app store that makes devs standardize on an API and shift the underlying arch. An arch that 67% of their product sales are using.

Don't get me wrong, this is going to be a difficult transition, I think apps like Steam are really going to get screwed, but this is Apple's end game. They control not only all the software but also all the hardware.

That's why core2 is fine.