What Was Significant

Our view has consistently been that Apple’s ambition with the Mac business is to continue to grow to take share from Windows in the higher-end>$1000 segment of the laptop market. Apple, in the last few years, has hovered around 10% of WW PC sales, and while they have never been at 10% before, it has stalled around that number. 2023 was a very weak year for PC sales and it is unclear if that was the core drag of the Mac or if M2 was not enough pull to keep the Mac momentum going. Regardless, Apple is full throttle with the M3 family and from what we have heard from supply chain contacts, Apple is looking to ramp Mac even more in 2024.

The biggest changes to M3 are a brand new GPU architecture that leverages an industry-first memory implementation called dynamic caching.  Dynamic memory may be a better way to understand what is happening. Still, this technique makes more efficient use of memory, only allocating the amount of memory needed for a workload in real-time.

Apple went to lengths to compare the new M3 P cores and E cores to M1 in an attempt to speak more to the audience of M1 owners to upgrade as well as the more than 50% of their Mac base that is still on Intel-based Macs. We believe the large portion of the Mac installed base that is still on Intel-based Macs represents the largest growth opportunity for Apple in terms of the Mac business.

Perhaps the biggest surprise was the price drop on the entry-level 14″ Macbook Pro. This SKU is among one of Apple’s best-selling models and a new entry point of $1599 should be seen as a significant market attraction.  Apple is now offering its fastest M series SoC on one of the most popular SKUs at the lowest price ever and thus appealing to an even wider audience. 

It was notable to us Apple did not emphasize TOPS (trillions of operations per second), where up to this point, the number of TOPS has been a key stat for all prior M Silicon launches. Apple mentioned the A17 Pro has 35 TOPS but did not call out a number for M3 during the event. On the Mac feature on Apple’s website, they list M3 has 18 TOPS, which is up from M2’s 16 TOPS. While this is a somewhat fuzzy metric, it does speak to the capability of an SoC NPU and its on-device AI capabilities.  As more AI models run locally for reasons like privacy, security, speed, etc., NPU TOPS capabilities will be a relevant battleground for all SoC makers. While we did not expect Apple to mention anything specific to AI/LLMs they did talk about AI developers as it related to M3 silicon. We believe in the short term, particularly in the commercial market, many large organizations will look to run their generative AI/LLMs locally at the edge and not in public cloud providers. While this is an 18-24 month time frame, we think the low TOPS number is okay for now, but it could limit M3-based Mac’s local AI capabilities as those devices will still be used in the market but won’t be capable of running larger models locally. Essentially, there could be a concern these would not be future-proof for AI capabilities that are around the corner.

What Was Announced

New Family of M3 Apple Silicon

• Apple has introduced the industry’s first 3-nanometer chips for a personal computer, which will bring significant improvements in speed and efficiency to Mac users.
• The M3 family of chips boasts a next-generation GPU with cutting-edge rendering features, including hardware-accelerated ray tracing and mesh shading. These advancements will enhance the graphics performance and visual quality of Macs.
• In terms of CPU performance, both the speed and efficiency cores in the M3 chips have been enhanced compared to the previous M1 chips. Additionally, the Neural Engine’s speed has also been improved, enabling faster and more efficient machine learning tasks.
• The M3 chips feature an enhanced unified memory architecture, ensuring smoother data access and overall system performance. They also support extended memory capabilities of up to 128GB, allowing for more intensive tasks and multitasking.
• Custom engines dedicated to AI and video processing provide accelerated machine learning capabilities and advanced media capabilities, giving Mac users unprecedented creative possibilities.
• The M3, M3 Pro, and M3 Max chips offer different levels of performance, catering to a diverse range of user needs. These differences include variations in the number of transistors, GPU cores, CPU cores, and memory support, allowing customers to choose the chip that best suits their requirements.

M3 Options In New Macbook Pro’s

• Apple announced a new lineup of MacBook Pro models with the M3, M3 Pro, and M3 Max chips. These chips offer enhanced performance and capabilities.
• The 14-inch MacBook Pro with M3 starts at $1,599 and is designed for everyday tasks. It provides a seamless user experience with its powerful performance.
• The 14- and 16-inch MacBook Pro with M3 Pro offer even greater performance and are capable of handling more demanding workflows. These models are perfect for professionals in creative industries.
• The 14- and 16-inch MacBook Pro with M3 Max are designed for extreme performance and capabilities. They excel in tasks like machine learning and video editing.
• All MacBook Pro models feature a brilliant Liquid Retina XDR display, which offers stunning visuals with vibrant colors and high contrast.
• The new MacBook Pro models also come with a built-in 1080p camera for high-quality video calls, a six-speaker sound system for immersive audio, and impressive battery life of up to 22 hours.

Refreshed iMac with M3

• The new iMac is powered by the M3 chip, offering up to 2 times faster performance than the previous generation with M1.
• It is also up to 2.5 times faster than the most popular 27-inch models and 4 times faster than the most powerful 21.5-inch model.
• The iMac features a stunning 4.5K Retina display with 11.3 million pixels and over a billion colors for a visually immersive experience.
• It offers faster wireless connectivity and seamless integration with iPhones, enhancing the overall user experience.
• The iMac boasts best-in-class camera quality, speakers, and microphones, providing exceptional multimedia capabilities.

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