Apple’s move to drop Intel chips in Macs in favor of Apple-designed custom ARM-based silicon could save the company $2.2 billion per year.
Stone Fox Capital for Seeking Alpha:
Due to years of failure by a chip manufacturer, Apple finally made the move to switch to internal custom silicon for their computers. In another crushing blow to Intel, Macs have utilized chips from the semiconductor giant for 15 years now. Outside the benefit of better performance and lower power consumption, Apple stands to generate higher margins, boosting the bullish margin thesis on the company. The move is a no-brainer and helps support a bullish investment thesis on the stock despite the recent surge to all-time highs of $373.
Apple desktop Macs with custom chips will have equal or better performance than Intel with the power consumption of a typical laptop… Normally, a company would have a hard time developing a special chip to achieve better performance and costs when the sector leader spends billions more on research and development, but Intel left the door open with year after year of failing to move to 10nm chips.
On top of the expected performance improvements for Apple, the move is a big benefit with billions in cost savings. Trefis estimates that about 20 million Mac shipments in 2022 will lead to $2.2 billion in savings for the tech giant… With the combination of custom silicon and a shift to Services with over 60% gross margins, Apple could easily boost gross margins to 41.5% in FY22.
MacDailyNews Take: Increased sales + rising margins = investor love.
So, that means Apple CAN ship charger and earbuds with the next iPhone.
Yes, and significantly lower the costs of the entire Mac line that uses the new chips…
That saving will not be passed on. The iPads aren’t cheap, the iPhones aren’t cheap. No, those prices, for the Macs, will be the same if not more. The so called savings, well, that’s apple’s profit. We should expect penta-flops performance using no more than 3 watts from Apple’s chips.
I agree with you. I only hope the Apple tax will remain the same. I don’t expect the new Macs to be more expensive because I’m sure Intel charged plenty for their high-watt processors. I’ll be happy to pay the same cost for processors that don’t thermal-throttle and are equal in processing power of mid-to-high-end Intel processors. I’ll be very happy to see Apple Silicon upstage Intel’s best processors. If Apple charged less for Apple Silicon computers, they could disrupt the entire consumer computer industry, but I doubt Apple would do such a thing in order to preserve their brand pricing.
You are helping make my point and not sure you thought this through. I sense fanboy defense in your post.
Apple will no longer have to pay the Intel tax and at very least double the price of chips to consumers. They recoup and cover their Intel expense 100% and make 100% profit.
Take away the Intel tax and pass along savings to Apple customers at half-price the cost of Intel. Why not? Oh right, Apple does not make enough money and beancounter Cook to the rescue.
“I’ll be happy to pay the same cost for processors that don’t thermal-throttle and are equal in processing power of mid-to-high-end Intel processors.”
Are you always so prudent in your spending or is it simply blind faith in Apple. No need, the answer is obvious…
“That saving will not be passed on.”
Cook taking away useful ports, headphone jacks and at present iPhone buds and charger cable — ALL to save money, yup, that would be a safe bet.
“No, those prices, for the Macs, will be the same if not more. The so called savings, well, that’s apple’s profit.”
Sounds like you are proud of Apple continually shortchanging customers under Cook and gouging them for more profits.
How much money is enough?…
You are either an investor or a consumer. I don’t feel I owe investors a living.
Ha! I suspect that will most likely not happen. At this stage, I’ll be happy top see Macs that trounce Intel’s performance for the same price (I suspect that’s what Apple is counting on).
No. There are a lot of things Apple can do, but decides against doing it. I’m sure the smaller boxes are a done deal. Less e-waste, less cardboard, less weight, less shipping costs. I’d say Apple made the decision some time ago.
“Less e-waste, less cardboard, less weight, less shipping costs.” Baloney!
Classic beancounter move to shave millimeters and make more money while not reducing the price dissing customers of standard accessories available since the iPhone debuted in 2007.
What happens when millions order a new charger or buds most likely BOTH in additional packaging and increased shipping costs?
Will shall see, but I suspect the green savings will be overtaken quickly by demand for accessories and in the end wasting and costing much, much more…
“In another crushing blow to Intel, Macs have utilized chips from the semiconductor giant for 15 years now.”
Would that my contracting gigs were as crushed.
It’s unlikely that Apple would ship 20MM ARM Macs in 2022. Not all of their product line will have transitioned at that time.
Unless, Apple come out with an entry level ARM Mac that steals sales way from mid range PC sales. I doubt that Apple will do much in the low end range until 2023.
And u base that assumption on?