Apple Will Save an Estimated $2.5 Billion With Its Switch to M1 Chips for 2020, Says New Report

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A shift to the M1 chip for the new MacBook Air, MacBook Pro, and the Mac mini isn’t just improving performance and power-efficiency on these machines, but also saving Apple a ton of money process. According to a new report, the move to using M1 should save Apple an estimated $2.5 billion in costs for 2020 alone.

Estimated Production of Apple’s M1 Chip Will Cost the Company Four Times Less Compared to Procuring Intel Processors

Many calculations were done by IBM AI strategy lead Sumit Gupta, claiming that Apple’s M1 chip production is expected to cost the company between $40-50 per unit. Compare that cost to a $200 Core i5 processor for the previous-generation MacBook Air or the MacBook Pro, and you’re looking at significant savings for the company. Given below is the cost breakdown provided by Gupta.

iPhone 12 Pro Costs Around $406 to Make, With the Most Expensive Component Being Qualcomm’s 5G Modem

ARM-based Apple M1 processor cost: $50 (might be closer to $40)

Intel Core i5 Dual-Core for MacBook Air: $200 (maybe $175)

Intel Core i5 Quad-Core for MacBook 13-Entry: $250 (maybe $225)

Costs of MacBooks with Intel:

MacBook 13-Entry: 8.6 M units x $250 = $2.15 B

MacBook Air: 5.4 M units x $200 = $1.07 B

Total = $3.2 B

Costs of MacBooks with ARM-based M1:

MacBook 13-Entry: 8.6 M units x $50 = $268 M

MacBook Air: 5.4 M units x $200 = $429 M

Total = $697 M

That is a saving of $2.5 Billion for Apple […]

While these figures are impressive and show how much Apple is estimated to save by switching over to custom hardware, Gupta admits that these are estimates and could change in the future. The M1 chip is a complex silicon, housing components like the GPU and unified RAM. Looking at what the company has developed, it’s possible it would cost Apple a heck of a lot more than $40-50.

Still, the savings Apple would accumulate would be higher than what it would gain from continuing to use Intel chips. In related news, the company is working on an A14T desktop-class chip for the iMac and reportedly developing a Mac Pro that’s smaller in size compared to the current-generation workstation. In short, Apple looks to be betting big on its custom hardware, and from what we’ve seen from a series of tests, the 5nm M1 is extremely promising.

News Source: Medium

Products mentioned in this post

Mac Mini
Mac Mini
USD 721.05
Mac Pro
Mac Pro
USD 2158
MacBook
MacBook
USD 1031.61

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