An report by a senior IBM exec indicates that this year, Apple’s shift to M1 chips would save the company about $2.5B, with much greater savings to come as Apple moves the entire Mac portfolio to its own silicon. Admittedly, the study is based on a set of estimates, and possibly unreliable, but the overall image it paints seems plausible….
IBM AI strategy chief Sumit Gupta carried out the back-of-an-envelope calculations. He estimates that it will cost Apple somewhere in the $40-50 range to manufacture M1 chips, against around $200 for the Intel Core i5 processor in the MacBook Air, and more for the entry-level MacBook Pro edition.
Gupta acknowledges that his numbers are a guess, and encourages others to quibble, as I’m sure they’re going to do. The M1 chip, for instance, has many more components than just the CPU, including a GPU and RAM, so it is not difficult to imagine a cost of production closer to $100 than $50. But then Apple can save on the cost of the discrete components that the SoC is replacing. The calculations often neglect the immense costs of R&D, and he admits that Apple would have been able to reach better agreements with Intel.
The big picture, however is correct: the financial savings will be well into the billions by the time Apple makes the transition to Apple silicon across the Mac range. The switch from Apple to M1 chips is really achieving the best of all worlds here: significantly improved performance, significantly increased battery life, and savings of multi-billion dollars.