BofA Merrill Lynch: Apple can save $500 million a year using its own chips in Macs

“Apple’s reported move to use its own chips instead of Intel’s products for its PC business will boost its financials, according to Bank of America Merrill Lynch,” Tae Kim reports for CNBC.

“Bloomberg reported Monday that Apple plans to ditch Intel chips and opt for an in-house offering for its Mac computers beginning in 2020,” Kim reports. “The ‘insourcing of chips could benefit Apple by not being dependent on Intel’s processor cycles, by lowering the Mac costed bill-of-materials by ~$40-50, and by potentially streamlining and reducing R&D spend,’ analyst Wamsi Mohan wrote in a note to clients Monday.”

“The analyst estimates Apple may save $500 million a year if it uses its own chips for half of its Mac PCs,” Kim reports. “He predicts the company will gradually use its own offerings across its product lines, initially starting with low-end Mac laptops.”

Read more in the full article here.

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  1. using non Intel chips seems like a faraway idea (or should be) for the convergence of Mac and iOS.

    right now Apple isn’t even using the fastest Intel processors for most of it’s Macs like the Mini, Pro, Macbook Air.

    the MBP is till missing the 32 GB ‘truck’ option btw.

    Also the iPad needs mouse support to make typing faster, it’s one of the biggest issues with the education initiatives for example.

    Solving all these and other issues is to me, a user, more important than idea of using proprietary chips.

      1. here’s how to use the iPad’s ON SCREEN trackpad feature (even with a real keyboard attached):

        (support article):

        Open a text document and make sure you’re in Edit mode, or tap in any text field.
        Place two fingers anywhere inside the text field to activate Trackpad mode.
        Move your fingers to move the cursor where you’d like it to be positioned.
        To highlight a word, position your cursor over the word, release your fingers, then tap once with two fingers. To highlight a paragraph, tap twice with two fingers.

        (how do you do this easily for example if you have it PROPPED UP to read ?)

        Here’s how I do it with a MOUSE:
        Insert Click.

        I don’t really need a flame war, so for people who want more info on the topic go read all the rants on the internet about improving iPad typing but here from John Gruber apple fanboy extreme:

        “In short, when you’re using the iPad’s on-screen keyboard, you have a crummy (or at the very least sub-par) keyboard for typing but a nice interface for moving the insertion point around. When you’re using the Smart Keyboard (or any other hardware keyboard) you have a decent keyboard for typing but no good way to move the insertion point or select text. Using your finger to touch the screen is imprecise, and, when an iPad is propped up laptop-style, ergonomically undesirable.”

        1. friends I absolutely realize that iPad is NOT a Mac and I shouldn’t rant about limits of soft keyboards etc, you use an iPad knowing it’s an iPad (I use my iPad Pro 12.9 every day) but that’s just the point… the article links back to idea that Apple is trying a convergence of Mac and iOS. What I’m scared off is that they will DUMB down the Mac like functions to make work like iOS and so on. This is not nonsense , we’ve seen them do it with dumbing down Pages etc to make them more iPad friendly.

          Instead what we really need is the most maxed out Macs at every level. from entry level to pro. Mac software too needs to be maxed out to utilize every functional advantage of a PC.

          What I think is that this convergence is not just about saving the 500 m BUT trying to lock in Macs to proprietary “AppStore” only apps to GAIN SERVICES (i.e app sales) revenue. Getting services revenue (like iOS is doing) is one of the biggest aims of Tim Cook, he doesn’t like Macs as they lose a lot of revenue through people loading apps form elsewhere (like photoshop) than the app store.

          even I as a aapl investor think if this is true it’s shortsighted.

  2. $500 million sounds like a lot. However, if compared to net income in last fiscal year, which was $48.5 billion $500 million savings would have increased net income to approx $49 Billion, or a savings of approx 1%. Perspective.

    1. “However, if compared to net income in last fiscal year, which was $48.5 billion $500 million savings would have increased net income to approx $49 Billion, or a savings of approx 1%. Perspective.”

      The increase in Net Income is even less than that after deducting tax consequence.

      That said I can see “Pro/Enterprise” models continuing with X86 chipsets (because of applications commitments), while “consumer” models are powered by an A-Series chip sometime in the not too distant future. If that occurs the savings will be far less than $500 million as consumers, in today’s mobile environment, just don’t buy as many “computers” as they did ten years ago.

  3. Hey, they can save a lot more than that if they don’t build Macs at all.

    Which is what they’ll be doing if they try a stupid stunt like that.

    1. MC68k -> PowerPC -> Intel -> ???

      Not sure why you think switching architectures would make a Mac no longer a Mac.

      If Apple is having problems moving towards their goals, because of Intel’s ineptitude, I wouldn’t bet against Apple switching again.

      The false narrative here is that Apple would use iOS on Macs, which is completely ridiculous. There’s absolutely no reason to make such a move. I can see possibly adding a compatibility layer that would allow iOS apps to run on macOS, but macOS will always be macOS.

      iOS is designed for resource limited devices. macOS does not have those limitations; storage, memory, power, etc.

      1. Today’s Macs are very much power limited devices since Apple hasn’t been keeping up with the Intel chipset releases. To make matters worse, Apple forces users to accept increasingly stupid hardware and usability constraints that make no sense whatsoever.

  4. the reality is that the X86 along with consumer Windows is dead. And Intel itself said a couple of years ago that the X86 was not a priority anymore. It is no longer the consumer mass market product it once was. People have moved to mobile devices and Chromebooks and it’s never going back.

  5. Make them all Apple chips and save a $billion instead. And tout that they re not trapdoored and compromised like all Intel chips are today by the 3-letter acronym croud. Talk about a win-win for Apple!

  6. Moving some Macs over to proprietry chips is just common sense. There’s a long list of amazing advantages :-

    1) better software hardware convergence, this leads to a smoother experience for the end user.
    2) Much improved power management, batteries that last a whole day and beyond
    3) Apple can take back control of the Mac road map, launching new hardware when they want to.
    4) Incredible software convergence between ios apps and Mac OS Apps. Developers will only need to code once and the software will adapt depending on whether you’re using a pointer or touch. ( this to me is the biggest advantage, it also gives Apple a massive advantage over all competition. No other company will have this capability.
    5) Amazing hardware oportunities, imagine a single Arm chip running your iPhone but when docked near a Apple branded smart monitor turns into a Mac with mouse and pointer, the software will adapt (see 4) depending on whether you use a pointer or touch.

    Honestly the opportunities are infinite, Apple will have so many impossible to copy USPs that the new Arm powered Macs will not only be cheaper to buy but also much more widely adopted. 6% market share will be a thing of the past Apple will have the monopoly of mobile devices and desktop devices they will merge to become one of the same depending on your needs. This is very exciting!

  7. If there is a Mac chip transition in less than 2 years it does not bode well to make a major investment in a 2018-19 Mac Pro that will use Intel chips (and have to worry about continued software support) unless Apple can reveal early it’s roadmap during WWDC and using multi-core ARM chips or whatever for higher processing power.

    It would actually seem prudent to jump platforms and stay with Windows & Linux which isn’t going anywhere in terms of new chip architecture. That will remain stable for some time to come. Just something to contemplate & ruminate on.

      1. The current Mac Pro was obsolete since mid 2014. Discounts can’t make it desireable.

        However if Apple chooses to make a Mac that requires an emulator to run Windows or Linux software, then the Mac will die.

        Once upon a time Apple was the company that offered a superior product and justified the price with clear long term advantages. There is absolutely nothing to show that the billions Apple and 3rd party app developers would have to spend to support RISC chips would do anything superior than CISC chips. Like it or not, x86 chips are in 90+ % of installed computers and even greater percentage of apps. Lose native processor compatibility at your own peril Apple. If you dumb down the Mac to become as useless as iOS is for serious computing, we will leave for good.

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