For many years now, the rumors have swirled that Apple is developing ARM-based chips to power Macs, displacing Intel. The Mac maker is finally ready to formally announce those plans later this month at its annual WWDC developer conference.
If this comes to pass, Apple will secure greater control over its product roadmaps, freeing itself from relying on a supplier that has been fumbling its launch of 10-nanometer chips. The company also stands to save billions of dollars per year.
Transitioning to in-house chips could yield estimated cost savings of $2 billion per year, according to Bernstein Research.
Over the past year, Apple has spent $148.1 billion in cost of sales related to hardware products, which would include things like components, with another $17.4 billion in R&D expenses. As such, $2 billion in annual savings is unlikely to move the needle much financially for the Cupertino tech giant. However, the strategic benefits of such a massive change would be far more valuable.
It’s worth remembering that Apple blamed Intel supply constraints a year ago when Mac revenue took a hit in the first quarter of 2019, underscoring the risks of relying too much on Chipzilla. The segment would have grown if it weren’t for those bottlenecks, CEO Tim Cook had said.
MacDailyNews Take: Apple is creating their own Mac chips because such a move is integral to the company’s makeup, as established and taught by Steve Jobs:
• I’ve always wanted to own and control the primary technology in everything we do. — Steve Jobs, October 12, 2004
• In order to build the best products, you have to own the primary technologies. Steve felt that if Apple could do that — make great products and great tools for people — they in turn would do great things. He felt strongly that this would be his contribution to the world at large. We still very much believe that. That’s still the core of this company. — Apple CEO Tim Cook, March 18, 2015