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Apple’s first-ever virtual Worldwide Developer Conference (WWDC) came with the usual slew of mostly predictable announcements, like upgrades to the iPhone and iPad operating systems, new features for its AirPod earbuds, and more. But its most striking news was a decision to shift from powering its Mac devices with Intel processors in favor of its own homemade chip, which it’s calling “Apple silicon.”

The Cupertino, Calif. tech giant claims the move will bring myriad benefits: it will make Macs faster, let them benefit from the company’s latest machine learning technology (for features like augmented reality, photo processing, facial recognition and more), and make it easier for developers to bring popular apps from the iPhone and the iPad to desktops and laptops. The transition to Apple silicon will take about two years; more Intel-powered Macs are yet to come.

Apple silicon differs from Intel’s processors by virtue of their architecture, which determines how a computer executes tasks. Apple is using ARM technology, which boasts faster performance with less power use compared to the architecture used by Intel (and its rival AMD). Generally, ARM processors make sense for devices like phones and tablets (because ARM chips use less battery power), while Intel and AMD’s chips have made more sense for high-performance desktops and laptops (where battery usage is less of a concern).

While the move may seem like a major blow to Intel—a longtime processor giant whose “Intel Inside” motto was once ubiquitous in computer stores—the company has already been moving away from making chips for companies like Apple, focusing instead on autonomous vehicle hardware, AI analytics, and high-margin, high-end processors for entertainment and gaming PCs.

“They recognize the challenges that are inherent in the client businesses these days and while they’re not going anywhere, they’re certainly trying to diversify themselves away from that,” says NPD Group analyst Stephen Baker. The Apple news, he says, is “not great, but in the long run I don’t think it’ll have an incredible impact on Intel.”

To be sure, Intel faces some headwinds. It still leads in market share, but it has consistently lost ground in the consumer market month after month to rival AMD (AMD’s share of the desktop market jump from 12% to 18% in the past two years, according to Mercury Research). Intel has also struggled to gain ground in the mobile world—it sold its ARM processor subsidiary in 2005, it killed off a pair of experimental augmented reality glasses in 2018, and last year stopped making 5G smartphone modems in favor of focusing on 5G infrastructure.

Perhaps Intel’s biggest struggle—and a reason it lost favor with Apple—is a never-ending battle with the laws of physics. Processors are composed of billions of transistors that perform calculations by turning on and off. The larger the transistor (measured in nanometers, or “nm”), the more power it uses. By using smaller transistors, you can fit more of them on a processor, which means more computing power, but also more energy efficiency. All told, the size of a processor’s transistors is a good indicator of how powerful that processor will be.

For most of modern computing history, chipmakers like Intel have been able to rely on “Moore’s law”—an observation that the number of transistors you can fit on a single chip doubles about every two years, thanks mostly to technological improvements. But, space being a finite thing, it’s getting harder and harder to cram transistors onto processors. As of today, Intel can make 10 nm processors, but even that achievement came after significant delays that put it behind the curve. By comparison, Taiwan Semiconductor Manufacturing Company, which makes mobile chips designed by Apple, has released smaller, more efficient 7 nm processors for mobile devices.

Intel’s delay in introducing 10 nm processors may have contributed to Apple’s decision to go their own way. “Having their own microprocessor architecture is something they’ve wanted to do since the Jobs era, for sure, to not be beholden to an outside partner,” says Jon Stokes, author of Inside the Machine: An Illustrated Introduction to Microprocessors and Computer Architecture, and co-founder of technology site Ars Technica. “I think the tipping point was when ARM started to catch up to Intel in … performance, and Intel stalled in processor leadership.”

Still, Intel is doing fine when it comes to powering other companies’ laptops, along with its other projects in AI and autonomous vehicle sensors. Its PC-centric business (providing processors for consumers’ desktops and laptops) grew by 14% year-over-year in the first quarter of 2020 as people bought new devices to work from home in the COVID-19 era. But in a sign of the company’s evolution, its best performing sector has been its data center group, which boosted revenue by 23% year-over-year thanks to an increase in cloud services.

What should the everyday Apple user make of the switch from Intel? It may end up being something to celebrate: Apple has a good track record of designing chips; the processor in the iPhone has outperformed Intel-powered laptops at certain tasks. Furthermore, the company is bringing popular third-party developers like Adobe on board early in the process, which should ensure that Apple silicon-powered Macs have plenty of useful software from jump (avoiding a critical misstep Microsoft made when releasing an ARM-powered Surface). That Macs armed with ARM will be instantly compatible with millions of existing iPhone and iPad apps is another nice bonus. And if Apple’s making Macs with iPhone-like internals, it’s not much of a stretch to imagine features like integrated LTE or 5G wireless connectivity, Face ID, and other mobile-only goodies come to its desktops and laptops. All told, Apple betting on itself might be the best decision the company has made since, well, betting on Intel.

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