Such an advantage is not the end, though. Look at where Intel is, with all the R&D spending, fab, and anti-competition moves from a couple of years ago. Engineers move around, and it is difficult to keep a top team for decades. You always end up making mistakes that can be used by your competition.

They won't keep the fab advantage. The money TSMC gets from Apple will contribute to improving production, which will also benefit other TSMC customers. Just like Apple buying most of the world's supply of NAND chips a couple of years back did not kill the market.

ARM Macs may be different in the future, but I don't think the performance advantage in phones is that important. People chose mostly on features and ecosystem. Even Android geeks do not care that much that last generation's iPhone outperforms their current flagship. Android still sells. Now, more performance does give more room for some features, but this is a second-order effect. For now, you can find almost any iPhone feature in some Android phones, often with bigger batteries or other things like a headphone jack or a SD port. OnePlus' phones are slower, but it's not the end of the world.

A vertically integrated Apple will suffocate the others if they become dominant enough to utterly dominate their market, which I don't see happening as long as they focus on the high end.