How Apple achieved these gains is an interesting business and technical story. In 2008, about a year after Apple released the first iPhone, it bought a small semiconductor start-up to build specialized chips for its phones. For many years, Intel’s chips were primarily made for stationary machines such as servers and personal computers. To reach their top speeds, Intel’s processors had to consume a lot of electricity and produce a lot of heat. But Apple’s main products are mobile, powered by batteries, so consuming a lot of power wasn’t ideal. The chip designers had to approach it very differently. Rather than maximizing pure power, Apple strived to build chips optimized for power and efficiency.
The technical ways Apple has achieved this combination will sound like a geek to anyone uneducated in semiconductor theory. In general, however, Apple’s systems use many specialized processing units and are optimized to perform more “out of order” operations, a technical term that basically means they can run more code at once.
The result is something like the difference between a muscle car and a Tesla. The muscle car reaches high speeds with a huge engine that burns a lot of gasoline. The Tesla can reach even higher speeds while consuming less power because its electric motor is inherently more efficient than a gas engine. Intel made muscle cars for years; Apple’s great innovation was building the Tesla from computer chips.
Apple also benefited from huge economies of scale. Because the iPhone is one of the most profitable products ever sold, the company could afford to invest billions in a custom chip operation — then repurpose its iPhone chips for the iPad, the Apple TV, and now the Mac.
Apple’s investments have helped spark a new race in the chip business. Intel is investing $20 billion in new chip-making factories, and other chip makers — Samsung and TSMC, who produce processors for Apple — are investing hundreds of billions of dollars together to increase capacity.
If I’m sounding a little too giddy about microchips, it’s because there hasn’t been much groundbreaking technical innovation in the tech business for years. Facebook is ruining democracies, Google just keeps sucking more money out of ads, and each new iPhone is just incrementally better than the last.
Apple’s processors feel really new. For better or for worse, they will dramatically improve the capabilities of our devices in the coming years. Today’s fastest phones are more powerful than computers from just a few years ago; Andrei Frumusanu, who reported on Apple’s new processors for tech news site Anandtech, told me he expects Apple to be able to make similar improvements over the next decade.