Apple may be saving billions in component costs by switching to M1 Mac
Apple may be saving around $2.5 billion in component costs by swapping Intel processors to M1 chips in some of its Mac and MacBook models.
![Credit: Andrew O'Hara, AppleInsider](https://photos5.appleinsider.com/gallery/38883-74226-50096499628_2e5ff04871_k(3)-l.jpg)
Credit: Andrew O'Hara, AppleInsider
That's an estimation by Sumit Gupta, IBM's vice president of AI Strategy. Gupta did some math based on rough estimates of Apple shipment volumes to arrive at that conclusion of Apple Silicon savings.
The IBM executive began with the assumption that Apple has shipped 8.6 million 13-inch MacBook Pro units and 5.4 million MacBook Air units throughout 2020.
From here, Gupta assumed processor costs of $40 to $50 per each M1 chipset. That's compared to an Intel Core i5 dual-core CPU for the MacBook Air, priced at about $175 to $200, and an Intel Core i5 quad-core CPU for the entry-level MacBook Pro, priced at $225 to $250.
Based on those component costs, the IBM VP suggests that Apple may have spent $3.2 billion on CPUs for Intel MacBook Air and MacBook Pro models. The same volume of M1-equipped devices would bring that total down to $697 million, a savings of $2.5 billion.
Of course, the glaring issue with this math is that it assumes all Mac models are MacBooks. They're not. Gupta didn't account for devices like the iMac, Mac Pro, or Mac mini in his overall Mac sales assessment.
And although cost was likely a factor in Apple's decision to move away from Intel, it's probably not one of the more important ones. More likely is that Apple wanted to free itself from the constraints of Intel product delays and a slowing roadmap of advancement.
Additionally, as Apple executives have explained and benchmarks have proven, the company's silicon technology brings a number of significant improvements to the user experience, such as battery life and performance.
Morgan Stanley does estimate that the MacBook Air, 13-inch MacBook Pro, and Mac mini made up about 91% of all Mac shipments in the past twelve months. Even if Gupta's math doesn't take the Mac mini and other desktops into account, Apple is still likely saving quite a bit of money with the M1 chip versus Intel processors.
![Credit: Andrew O'Hara, AppleInsider](https://photos5.appleinsider.com/gallery/38883-74226-50096499628_2e5ff04871_k(3)-l.jpg)
Credit: Andrew O'Hara, AppleInsider
That's an estimation by Sumit Gupta, IBM's vice president of AI Strategy. Gupta did some math based on rough estimates of Apple shipment volumes to arrive at that conclusion of Apple Silicon savings.
The IBM executive began with the assumption that Apple has shipped 8.6 million 13-inch MacBook Pro units and 5.4 million MacBook Air units throughout 2020.
From here, Gupta assumed processor costs of $40 to $50 per each M1 chipset. That's compared to an Intel Core i5 dual-core CPU for the MacBook Air, priced at about $175 to $200, and an Intel Core i5 quad-core CPU for the entry-level MacBook Pro, priced at $225 to $250.
Based on those component costs, the IBM VP suggests that Apple may have spent $3.2 billion on CPUs for Intel MacBook Air and MacBook Pro models. The same volume of M1-equipped devices would bring that total down to $697 million, a savings of $2.5 billion.
Of course, the glaring issue with this math is that it assumes all Mac models are MacBooks. They're not. Gupta didn't account for devices like the iMac, Mac Pro, or Mac mini in his overall Mac sales assessment.
And although cost was likely a factor in Apple's decision to move away from Intel, it's probably not one of the more important ones. More likely is that Apple wanted to free itself from the constraints of Intel product delays and a slowing roadmap of advancement.
Additionally, as Apple executives have explained and benchmarks have proven, the company's silicon technology brings a number of significant improvements to the user experience, such as battery life and performance.
Morgan Stanley does estimate that the MacBook Air, 13-inch MacBook Pro, and Mac mini made up about 91% of all Mac shipments in the past twelve months. Even if Gupta's math doesn't take the Mac mini and other desktops into account, Apple is still likely saving quite a bit of money with the M1 chip versus Intel processors.
Comments
Though Apple will need to beef up the GPUs and add dual 5K screen support before I can switch.
It's a bad day to not be Apple.
Wonder if Intel/AMD will attempt to dust off and crank up the 80' FUD machinery.
A doubled M1 (M1x) shouldn't have any problems inside of a 16" MBP's thermal envelope, especially with the RAM and GPU on the SOC. In fact, there will likely be far more overhead for sustained performance.
I suspect there may actually be some small compression in the pricing tiers based on the cost savings to make the machines even more competitive.
No matter what, price-performance-per-watt wise PCs will look expensive. I'll call it the "Intel Tax"! There will be no PC laptop that will come anywhere close to the M1x beast in the MBP 16".
https://www.macrumors.com/2020/11/18/run-windows-software-on-m1/
Looks like Apple may have discovered the mythical “god chip”.
Apple didn't add any new features which is a shame. Was hoping to see new designs, new App Store, cellular chips, FaceID etc.
With that said we do not know the component costs but it seems Apple did not pass any savings down to us. This could be a good thing since Apple is always inventing and being innovative and all that extra money just means a fatter R&D wallet.
When people argued that an ARM Mac would have compatibility issues I said Apple would figure it out. This is common sense to anyone who's been following Apple for more than a decade.
Things are looking good.
Now the point is made if that will continue to apply on the next models with m series chips is unknown.
If things go belly up where they are fabbing, a large part of its hardware business would be affected once the transition is over.
This has been the case for a while now but now there are even more eggs in the basket.
It's funny that you don't mention that "belly up" pretty much describes what happened to Huawei's Kirin for "political" (really National Security) reasons.
TSMC will be building a fab in Arizona, but it won't be up and running until around 2024, and it may not be at a leading node anyway. It's there for National Security reasons since the U.S. Military, and Western Military's in general, are users of ARM based devices. Apple could also dual source to Samsung, But otherwise, there aren't any foundries outside of Taiwan or South Korea that are at a leading edge node, though Intel will probably get itself back to a leading edge node this decade.
Apple could build their own fabs at some point in time, but the most likely outcome is that TSMC will create fabs somewhere else in South Asia and/or South America.