The rest of the processor industry, including the ARM ecosystem where some people get to compete with ARM themselves, is making a lot of progress in working out how to improve the layout of the transistors, such that two designs on the same process can perform quite differently. In the case of the Ax devices and the Krait this is a surprisingly significant margin, and they tend to be at least a whole generation ahead in performance of the designs coming out of ARM. This is not something to be dismissed.
Phones would have no choice but to get bigger to get more powerful or to get longer battery life and perf/watt would hit a wall.
Point being, Apple spends a disproportionately small sum on R&D relative to the size of their earnings and they don't seem to be funding basic research at all like large corporations of the past, e.g. IBM, Bell Labs, Xerox PARC, etc.
With the government cutting funds for basic research, we need corporations who are sitting on $4 trillion in cash, to pick up the slack.
http://krugman.blogs.nytimes.com/2012/07/24/they-didnt-build...
You should see technology as a forest. You can mine it for medical cures, for wood, it's an enormous externality that you leverage. And you have a duty to continue planting more back into it to keep it going for yourself and everyone who comes after you.
The Apple narrative is too bound up in heroic origination stories, without due credit and acknowledge to the huge role played by the rest of the industry. I'm only saying that if one profits immensely by using knowledge produced by one's forefathers, one has a duty to reinvest and keep driving it forward, not hoarding piles of cash. (oh, and not going insanely litigious and secretive on discoveries either :) )
Apple designed the A7 themselves. It happens to implement the ARM instructions, but is not an ARM design. The only other player I can think of currently with this in the wild is Qualcomm, and this is one reason Apple and Qualcomm chips maintain a performance edge over other ARM CPUs.