Apple Could Gain Ground Against Microsoft Windows With M2 Chip

Justin Sullivan Getty Images Apple’s new laptops unveiled Monday, with the iPhone’s next-generation chips, could pose new challenges for Microsoft’s lucrative Windows business. Ever since Apple started selling Mac-powered Macs in late 2020, the company’s PC business has been booming. Earlier this week, Apple unveiled the M2, which will debut its new MacBook Air and 13-inch MacBook Pro. The new chip will include 25% more transistors and 50% more bandwidth than the M1. Mikako Kitagawa, an analyst at technology research firm Gartner, said Apple could continue to gain market share with the M2 architecture. In 2021, Apple accounted for 7.9% of global PC shipments per operating system, while Windows controlled 81.8%, according to Gartner estimates. The company expects that Apple’s share will rise to 10.7% in 2026, as Windows’s share will fall to 80.5%. Kitagawa said an updated forecast that is likely to make Apple’s performance appear stronger will come in the coming weeks. Apple Mac has been revived with new devices bearing its own chips as a replacement for Intel processors. The first was the MacBook Air released last year, followed by updated models of iMac, Mac Mini and MacBook Pro laptops and a new model for powerful users called Mac Studio. Newer Apple devices have longer battery life than older Intel-based counterparts and considerable processing power. Sales have increased. Apple Mac companies grew by 23% in fiscal 2021 in sales of over $ 35 billion. In the March quarter, Mac sales rose more than 14%, faster than any other Apple hardware category. Apple CEO Tim Cook told analysts in April that “the incredible customer response to M1-powered Macs has helped increase revenue by 15% year-over-year despite supply constraints.” This is not good news for Microsoft. Most of Microsoft’s revenue from Windows comes from licenses it sells to Dell, HP, Lenovo and other device manufacturers. That accounts for 7.5 percent of Microsoft’s total revenue and nearly 11 percent of gross profit, Morgan Stanley analysts led by Keith Weiss wrote in a note this week. As Microsoft loses market share, “a lot of price control is being lost in the market,” said Brad Brooks, Censys CEO of cybersecurity and former corporate vice president for Microsoft’s Windows consumer business. Most of the revenue from Windows licenses to device manufacturers comes from commercial customers. Brooks said Apple is making progress among consumers and learned during its nine years at Microsoft that there is a positive correlation between consumer use and what happens at work. “Once they start using a different set of products in their home environment, they are more likely to adopt that environment in their business environments,” Brooks said, referring to corporate leaders who make technology market decisions. Brooks said he switched to Mac as his main computer in 2017 and said he would like an M2 camera in the future. All of his company’s approximately 150 employees use Macs as master computers, he said. Businesses were slow to adopt Apple M1 computers due to concerns that key applications would not be compatible. However, Adobe, Microsoft and other developers have been gradually releasing native versions of their device software, said Kitagawa, who now expects corporate adoption to increase. Patrick Murchant, CEO of industrial research firm Moor Insights and Strategy, said Windows PCs could eventually have battery life and performance that would match Apple’s latest Macs. Among the chip makers they use, “they are currently closer between Apple and AMD than between Apple and Intel,” Moorhead said. However, Apple has other levers to pull, as it could offer cheaper computers. Moorhead envisions a MacBook SE that could cost $ 800 or $ 900, compared to the starting price of $ 1,199 for Apple’s upcoming M2 MacBook Air. It would be similar to what Apple did with the iPhone SE, a budget iPhone that lacks some of the company’s latest smartphone enhancements. “A much lower-priced MacBook SE will greatly disrupt Windows,” Moorhead said. Microsoft did not respond to a request for comment. – CNBC’s Kif Leswing contributed to this report. CAUTION: The M2 chip, Apple’s later payment service, are the most important announcements from Apple’s WWDC, says Goldman’s Hall