It isn’t necessarily critical, but it does get them a few things:
- Because their processors are so overpowered, their phones last a long time. This adds to the premium experience (e.g. put a 3 year old galaxy and a 3 year old iPhone side by side).
- Fast hardware lets them innovate on the edges; e.g. folks here don’t take AR seriously because they use androids and AR sucks on Android; the power just isn’t there to make it work well. 3 year old iPhone runs AR experience at 60fps no problems. Not many people use it daily, but if you need it, it is nice to have.
- Being able to sell 3 year old devices as new allows Apple to target multiple market segments without having to develop separate low end hardware. They don’t need iOS Go because all recent hardware can run iOS with a flagship like experience, even the low end SE. They also don’t take the reputation hit of selling a $400 device that doesn’t work well or runs ads on the Lock Screen to get a subsidy.
- By ensuring all components in their devices work to a minimum standard, they make the rest of the system look good. Example: compasses in android devices, even flagships, are of variable quality. No one ever writes reviews about the compass, so it goes unnoticed, but trying to get a mapping application working well on Android is an absolute nightmare by comparison. Similar situation applies to: GNSS receivers in phones, gyro/accelerometers, trackpads in laptops, haptics in phones and watches, screens on all devices, among others. They also benefit from being able to assume every recent device has a secure element and a UWB radio, among other features.
- They’re able to innovate through connection to other hardware in the ecosystem. Spatial audio seemed like a gimmic, but I’ve recently come around. It is amazing to have an almost theater-like experience watching Hulu on my iPad in the gym. Microsoft and Google can’t really do that because they don’t ship high-quality earbuds at anything like Apple’s scale/reach. Microsoft and Google can’t use my Watch to log in or authorize purchases because they don’t have a watch business (I mean google’s been trying, they might get somewhere with it someday). Microsoft can’t use their smart speaker as surround sound for the Xbox because they don’t sell a smart speaker. I count the integrations and broad business as part of Apple’s hardware advantage.