Munyaradzi Nigel Muchenje

5 months ago

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IBM exec estimates that Apple's move to M1 chips will save $2.5B this year

IBM exec suggests that Apple's move to M1 chips will save the company around $2.5B this year. As Apple transitions its entire Mac lineup to its silicon, larger savings are to come.

The analysis is based on a series of estimates, and likely inaccurate, but the picture overall seems reasonable. IBM AI strategy lead Sumit Gupta made calculations which are the back-of-an-envelope calculations.

He estimates that M1 chip production will cost Apple somewhere in the $40-50 range. This is against around $200 for the Intel Core i5 processor in the MacBook Air and the entry-level MacBook Pro.

Assuming the following costs for Apple:
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
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!!!

M1 chips bring the best for the new Macs with improved performance, greatly improved battery life and billion-dollar savings.