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Computer processors keep on shrinking, which improves their power and reduces their energy needs and costs. In the not too distant future, this means full PC power in your mobile phone, which could be seamless from your tablet/PC experience.

However, we're not there yet, and there are awkward trade-offs and compromises involving different types of processors and operating systems in the meantime. We will argue in this article that Apple (AAPL) is best positioned to eliminate these trade-offs and compromises and arrive first at a unified computing platform.

Shrinking processors
We wrote a couple of articles about the end of the PC (here and here), basically arguing that tablets were taking over most of the PC functionality. But developments aren't going to stop there. According to Intel, microprocessors will shift from 22nm to 5nm by the end of 2020. To grasp the consequences:

In very simple terms, if you shrink a computer chip from today's 22nm tech down to 5nm, adding nor removing any transistors, you end up with something roughly six percent the size of the original.

You should also realize that energy needs and cost will improve roughly along the same lines:

Thus, the individual chip cost is directly proportional to how many you can cram into a wafer. And if you're cramming in 15 times more chips, well...

Since we've achieved similar orders of magnitude improvements on these metrics, we only have to look back to see how revolutionary such change can be. It is said (by Michael J. Saylor, CEO of MicroStrategy) that the iPhone contains more processing power than the Apollo 11 that took the first man on the moon. By 2020 we can expect:

The cost of putting meaningful compute power into an object will be so low, they'll be sticking compute into almost everything. A quad-core Core i5 in your loaf of bread by 2025? It sounds ridiculous. It sounds pointless. But I think you'll be surprised by just how close reality comes.

The shrinking of chips allows for the shrinking of PC's. It already is possible to put a whole PC on something like a memory stick. We see this already with stuff like the MK802, an Android mini PC the size of a USB flash memory stick. Full power Intel (INTC)-based devices (like the Core i5-powered NUC) are still quite a bit bigger, but no doubt this will shrink as well.

In fact, one can argue that mobile phones, which aren't really that much different, already have more functionality than these little contraptions. It takes little imagination that mobile phones will, in fact, become our next PC. Hook it up wirelessly to a keyboard and bigger screen and voilà.

Most of the data might be in the cloud, handy for synchronizing it with other stuff you're using, but considering advancing memory technologies, perhaps even this might not be necessary in the not so distant future and you'll be able to have all your data on your mobile phone. In fact, the idea of a cellphone morphing into a PC (and probably much more) isn't at all crazy. Here is the CEO of ARM Holdings (ARMH), Warren East:

To me a PC is really just a smartphone in another form factor [Technology Review]

He rightfully added that:

There's been a lot more innovation in the world of mobile phones over the last 15-20 years than there has been in the world of PCs.

While the end state is relatively clear, it matters a great deal how we get there. The problem is that the chips running full legacy operating systems like Microsoft (MSFT) Windows 8 are not ready yet, so we either compromise on the chips (like Intel's Atom chip family), or we compromise on the operating system, like shifting to Windows RT, Windows Mobile, Android or iOS.

Enter Apple

An interesting question will be what operating system (and chips family) will run those "mobile PC's." Intel's Core (i3, i5, i7) chips can drive tablets, but this compromises size and battery life, not to mention that these are expensive.

It's for those reasons Microsoft found it necessary to create an ARM based operating system, simply to make tablets cheaper, thinner, with longer lasting batteries.

At present, it's hard to imagine Windows 8 running on mobiles any time soon, although with Moore's Law inexorable advancement, we will get there in the end.

However, Apple (AAPL) could have a serious headstart here. Take not of the fact that according to Bloomberg, Apple is seriously considering ditching Intel processors in favor of ARM based ones even for its iMacs.

In case you think that's too difficult, realize that Apple is quite used to shifting its Mac's processor architecture (it has done so three times in the past), and it has already been designing its own ARM based chips for the iPad since 2010.

With the coming 64-bit architecture for the ARM based platform, memory limits (the 32-bit chips limit RAM to 4GB) will be a thing of the past. Apple has a long-standing relation with ARM going back to the 1980s and at one stage owned over 40% of the company.

Moving to ARM based chips would give Apple, which has heavily invested in chip design capabilities lately, more freedom to design chips according to its own specifications, giving it a leg up versus the competition:

Although Intel has acknowledged Apple has provided valuable input into its chip designs, Intel is not making custom processors for Apple, which poses a problem moving forward. [Digitaltrends]

Insofar as running OS X on ARM processors:

Apple has a head start. Its iOS operating system is based on Mac OS X, meaning the two share a large number of core technologies. Much of the groundwork for running OS X on an ARM chip already exists, and there's long been speculation Apple has been bringing up most of OS X on ARM systems for years just as a proof of concept. [Digitaltrends]

The A6X processor is already way more powerful than the PowerPC notebook chips Apple used before switching to Intel, and using them in laptops would enable Apple to crank up the clockspeed, and/or adding more cores. And there is another, perhaps even the greatest advantage to keep in mind:

Apple's chips are so much less expensive than Intel's mainstream CPUs that Apple could afford to eat a bit of expense there. [Digitaltrends]

Apple pays under $20 for its A6 processor, compare that to Intel processors, a low end Core i3 starts at $117. Here is the upshot:

Given how many people find Apple's iOS devices totally acceptable for lightweight gaming, Web browsing, email, managing photos and entertainment like movies and music, it's fair to guess hypothetical ARM-based Macs would be able to meet those same sorts of needs easily. On consumer notebooks and desktop systems, the real performance constraints are usually memory, storage, and networks, not the processor. [Digitaltrends]

Conclusion
Apple could be moving to a single operating system, combined with its own designed chips that go into every Apple device. This would not only give the company a unified space for mobile, tablets, and PC's, it would create a seamless consumer experience, and doing so at a significant cost advantage.

Is there anything that could match that? Well, when Intel's x86 architecture processors have shrunk enough to be able to comfortably run mobile phones and Windows 8, perhaps. But Microsoft has gone for Windows mobile on mobile phones, and Windows RT for the smaller tablets, so we don't see this happening any time soon.

Apart from the fact that while Windows 8 has an advantage in legacy software, Windows mobile and RT are running way behind Apple (and Android) in terms of apps, not to mention the cost advantage Apple enjoys in its processors.

But perhaps when that world of almost free computing power sketched at the beginning of the article is here, these differences won't matter all that much anymore. But by that time, Apple's lead could be difficult to overcome, at least in the consumer space.

Source: How Apple Could Build The Dominant Computing Platform