When Apple Inc. (NASDAQ:AAPL) unveiled the iPhone 5S and its 64-bit A7 chip, most people were shocked. Why on earth would they move to a 64-bit processor on a smartphone when no one else has done it yet? According to analysts at Evercore, that is precisely why they did it. They want to go back to being the trendsetter instead of a follower.

Apple iphone 5s

Apple is changing the game

Analysts Patrick Wang, Rob Cihra, Michael C. Lucarelli and Edison Yu dissected the chip and then issued a report to investors explaining why they see the A7 as a big game changer in the smartphone industry. They said its important because it paves the way for major performance gains through Cycline, which is a new custom Apple core. It also allows for “higher intrinsic performance” based on the ARM v8 architecture while also making it possible for complete unification across both iOS and Mac.

In terms of the Cyclone core specifically, they believe it could lead to an Ax-powered hybrid device, which may be some kind of cross between an iPad and a MacBook Air. They suggest that we could see such a device as soon as within the next four to six quarters.

If Apple Inc. (NASDAQ:AAPL) does this successfully, they believe this could lead to the next major leg in the ARM Holdings plc (NASDAQ:ARMH) (LON:ARM) story. They also see a big secular headwind for Intel Corporation (NASDAQ:INTC) which will pave the way for Apple “to figure out a market for ‘hybrid’ devices that has thus far eluded most who’ve tried.”

Apple’s new chips are a major milestone

The Evercore analysts believe that the A7 / M7 processor combination marks a major milestone in mobile computing by bringing 64-bit to the market. They said although some dismissed the chip in the beginning, they see it as significant because it unites efforts across operating systems while also providing a meaningful boost to performance.

They called Apple Inc. (NASDAQ:AAPL)’s A7 chip a “beast” and “the highest performing mobile processor in the market.”