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AI is making Microsoft vs. Apple interesting again

For the first time in a long time, the battle between Macs and PCs is interesting again.

Apple's (AAPL) products have been beating out Microsoft's (MSFT) Windows-based PCs for years thanks to their superior battery life and performance. But Microsoft says it’s finally tipped the scales back in its own favor.

“We have more powerful silicon. We've rewritten [Windows 11] to take advantage of it. And then we have unique experiences we've built on top of that platform,” Microsoft consumer chief marketing officer Yusuf Mehdi told Yahoo Finance. “So I think we have a distinct advantage for a period of time here.”

Microsoft says it’s achieved this through a new category of AI PCs it’s calling Copilot+ PCs.

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You’ve probably already heard about AI PCs, which are PCs that include special neural processing units (NPUs) that can run AI apps locally rather than relying on cloud-based services like ChatGPT.

Copilot+ PCs include those same NPUs, but also come with a minimum of 16GB of RAM, 256GB of storage, and, importantly, run Microsoft’s Copilot AI assistant for Windows 11.

Microsoft’s Copilot+ PCs come as the PC industry hopes it’s entering a period of sustained sales growth after two years of steep declines. According to IDC, PC sales grew 1.5% in the first quarter compared to a drop of 28.7% in Q1 last year.

“There's no doubt in my mind that the demand is here,” Mehdi said. “And this is going to spur a purchase of PCs in ways that we haven't had before.”

For the first time in decades, Mehdi added, Microsoft feels it has an edge on Apple from both a performance standpoint and because it offers “completely unique things that you can’t do anywhere else.”

Apple is notoriously behind Microsoft in the AI race, having sat on the sidelines until very recently — though it has made sure that its hardware has extremely fast AI-ready chips.

Looking to take advantage of Apple being caught on the back foot, Microsoft hopes the Copilot+, which is powered by GPT-4o, will provide a seismic productivity boost with the ability to serve as a user's go-to assistant for tasks ranging from dealing with common problems like audio issues to summarizing documents.

Microsoft Senior Product Manager for Surface, Oyin Shenbanjo, speaks about the new Surface Laptop in comparison to the MacBook Air M3 during the Microsoft Briefing event at the Microsoft Campus in Redmond, Washington, on May 20, 2024. (Photo by Jason Redmond / AFP) (Photo by JASON REDMOND/AFP via Getty Images)
Microsoft senior product manager Oyin Shenbanjo speaks about the new Surface Laptop in comparison with the MacBook Air M3 during a Microsoft Briefing event on May 20, 2024. (JASON REDMOND/AFP via Getty Images) (JASON REDMOND via Getty Images)

Microsoft also introduced its new Copilot Recall, a feature that makes it easier to search virtually everything you’ve done on your PC, including documents, photos, and web pages. So, if you were planning a trip to Seattle but lost the site you were using to look up things to do, you can type “Seattle” into Recall, which will pull up the site you were browsing.

Microsoft says it does this by taking a snapshot of your screen over time and then using Copilot’s visual search feature to find the content you’re looking for. The company also says content saved in Recall is only stored on your device and that you can customize which apps use the feature.

Microsoft’s first Copilot+ PCs will hit the market in June starting at $999, conspicuously the same price as Apple’s MacBook Air.

Windows and Mac users may have different priorities, with many of them engrained in a specific ecosystem and unlikely to change. That is, unless perhaps fresh and exclusive AI functionality lures somebody over the fence. But they can still be put head to head.

Performance benchmarks have become major talking points, and Apple’s Mac laptops have been crushing Windows-based PCs in terms of power efficiency ever since the iPhone maker rolled out its first M1 chip for MacBooks in 2020.

Those Arm-based (ARM) chips have made it so MacBooks can last all day on a single charge while providing exceptional overall performance across a multitude of use cases. But Microsoft says its Windows PCs have a new weapon that puts it back in a leadership position: Qualcomm’s (QCOM) Arm-based Snapdragon X Elite and Snapdragon X Pro chips.

During its announcement on Monday, the company said a Copilot+ PC running on Qualcomm’s Snapdragon X Elite chip gets 20% more battery life, 23% better peak performance, and 58% better sustained multithread performance than Apple’s MacBook Air with an M3 chip.

What’s more, Mehdi said Snapdragon-powered Copilot+ PCs beat out Apple’s latest M4 chip in terms of trillions of operations per second, or TOPs, a common measurement for gauging potential AI app performance.

For now, Microsoft has the edge thanks to an actual AI product. But Apple isn’t taking any of this lying down. The company will host its annual WWDC event on June 10, where it’s expected to roll out its own AI apps and services, including some that Bloomberg’s Mark Gurman says will run on OpenAI’s AI software.

And as far as its MacBooks go, Apple is still likely to announce its M4 Pro and M4 Max chips, which should offer better performance than its M4 and could outpace Qualcomm’s chips.

Mark June 10 on your calendar.

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Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.

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