Dumping Intel for M1 in MacBooks saves Apple some $2.5 billion per year

Sumit Gupta, VP, IBM’s AI Strategy, has done the math and estimates that Apple’s move to dump Intel for the M1 in new M1 MacBooks (Air and 13-inch Pro) could save the company $2.5 billion per year.

The 13-inch MacBook Pro with M1 delivers game-changing performance and the longest battery life ever on a Mac.
The 13-inch MacBook Pro with M1 delivers game-changing performance and the longest battery life ever on a Mac.

The M1, the most powerful chip Apple has ever created and the first chip designed specifically for the Mac. M1 is optimized for Mac systems in which small size and power efficiency are critically important. As a system on a chip (SoC), M1 combines numerous powerful technologies into a single chip, and features a unified memory architecture for dramatically improved performance and efficiency. M1 is the first personal computer chip built using cutting-edge 5-nanometer process technology and is packed with an astounding 16 billion transistors, the most Apple has ever put into a chip. It features the world’s fastest CPU core in low-power silicon, the world’s best CPU performance per watt, the world’s fastest integrated graphics in a personal computer, and breakthrough machine learning performance with the Apple Neural Engine. As a result, M1 delivers up to 3.5x faster CPU performance, up to 6x faster GPU performance, and up to 15x faster machine learning, all while enabling battery life up to 2x longer than previous-generation Macs. With its profound increase in performance and efficiency, M1 delivers the biggest leap ever for the Mac.

Sumit Gupta:

The laptops that use the ARM M1 instead of Intel x86 CPUs are the MacBook Air and the MacBook 13-Entry, which is a combined volume of almost 14 million MacBook units.

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:
• 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!!!

The math is easy and simple for Apple. They save over $2 Billion by moving to their M1 chips. And they get better performance, better battery life, and of course, can innovate in the silicon (neural nets, graphics, …).

MacDailyNews Take: Apple finally dumping Intel for their own SoCs is a win for battery life, a win for performance, and a win for costs. It’s a win-win-win for both Mac users and Apple!

32 Comments

    1. Apple will not capture the entire PC market — ever. Microsoft is too entrenched. Linux is too well liked, and supported, in several segments.

      Hell, I have to work with a few U.S. government sites that INSIST on the use of Windows and Internet Explorer even though Microsoft has officially killed IE. In talking to them they expect to move their systems t requireo the use of Edge within two to three years from now, but likely not before. Many, many more sites are Windows only but don’t care what browser or FTP or other application is used so long as they are Windows based. That reality is not going to change for a long time.

      If we assume that there’s a dedicated M1x for the 16″ MBP and the iMac then an M2 or M2x for the MacPro — and assume they are as great against the comparable Intel/AMD arocessors as the M1 is against those with which it competes head to head — then over the course of the next decade the full Mac line might claw its way up to 20% market share or more.

        1. Market share does matter (MDN’s sermons not withstanding). Market share is what determines the platforms developers develop for, etc. It also prevents government agencies and large corps from selecting Apple products.

          “Profit Share” has exactly the opposite effect. Governments and large corps say “Hey, if Apple is making so much profit off these things, their prices are a bit too high. Stick with Windows.”

          Profit share only matters to people who are heavily invested in Apple Stock (as MDN seems to be).

          1. Dumb MBA, Apple, Porsche, Mercedes, In & Out Burger, Dyson, Monster Drink are not concerned with sacrificing profit for market share. Every time Apple releases a new device the weak of mind say, Apple must go cheap or they are doomed…..

            The M1 (Apple Silicon) is a game changer CPU and Apple doesn’t need to sell devices made with it cheap.

    2. I wish Apple could just capture 10% more market share. There’s no way Apple can compete with $350 plastic-cased Wintel laptops or those crippled Chromebooks. Too many people want to buy dirt-cheap laptops and there’s no way around that. Same with schools that want the cheapest hardware possible to get more laptops for students. Even if Apple gave a $200 educational discount for laptops, it still doesn’t come close enough to the Wintel offerings. The schools let the students make do with Celeron or i3 processors as they’re not going to do any demanding workloads. Any piece of junk will do, especially in these pandemic times.

  1. $2.5B a year is round off error money to apple. It does way way way more than that. Again, the market doesn’t get that it was just nuked. It’s not at all priced in. This adds 70 points to apple.

    What does it do? The impossible.

    Apple now sells impossible machines. They sell an entry level air with a CPU better than the BEST heavy duty wall plug laptop in the industry, with a battery that lasts 20 bleeping hours.

    It’s an IMPOSSIBLE machine for the industry to duplicate. That’s worth WAY WAY WAY WAY WAY WAY more than 2.5b.

    Do you want to know what kind fo machine that really is?

    Thats a MARKETSHARE EATING MACHINE

    So apple sells what may 2% global. If that doubles marketshare to 4% what does that do

    FREE HIGH MARGIN MONEY

    1. “Apple now sells impossible machines. They sell an entry level air with a CPU better than the BEST heavy duty wall plug laptop in the industry, with a battery that lasts 20 bleeping hours.”

      No. There are AMD based laptops that beat the M1 MacBook Air.

      1. @Shadowself: OK, so I’m curious. Could you please point us to those AMD based laptops?

        Like most of the rest of the world I’m blown away by what we’ve been told about the M1, but I also can’t imagine that there’s absolutely no attempt to compete. So yeah, I’m curious.

        1. I will second that.

          It seems @Shadowself is very pessimistic regarding the M1 chip and protective of Windows dominance.

          As I have been saying for years, if Apple made beautifully industrial designed machines with the same specs or better for the same price — they will OWN the PC MARKET in less than a decade…

      2. Maybe you’ll find one or 2 examples of some extreme examples that beat it by a hair and need a power generator near by. Realistically, nothing really competes. Much less gets the battery/weight we’re talking about.

        The parrot is dead. It is no more. It has ceased to exist.

      3. Yes, please point us to AMD laptops which have 18-20 hour battery life. And which weigh less than 3 lbs.

        Yes, there are certainly other laptops which beat the new M1 Macs from a raw power standpoint, but what’s their price/power/weight/battery life ratio?

        1. A few people at work bought Windows “laptop workstations.” Sure, they were fast, but just their power bricks alone weighed about as much as an MBA. The laptop workstations, themselves, were couple of inches thick and probably weighed 8 lb or more. On batteries (large batteries), they could run about 45 minutes. And their cooling fans sounded like a jet engine winding up.

          I have been waiting for this transition since at least 2016. It took a few years longer than I had hoped, but the results are even better than I had imagined. And this is just the beginning…

      4. TSMC makes the chips for AMD and Apple. TSMC is the real winner over intel.

        But If CCP china invades Taiwan by force then both Apple and AMD will be further attached to the CCP

        its a shame intel is no longer competitive, lets hope they rise to the challenge

        1. No I think it’s clear that if China invades Taiwan by force it will mean a hot war. Not even kidding. No way will the United States give up unfettered access to such a critical industry. China must know this which is why it is pursuing a very different path than the one in Hong Kong (which is a human rights disaster.)

  2. Is the cost for M1 including the R&D costs? The price paid to intel includes overhead for the development of the chip.
    Not saying that M1 will not be cheaper but the R&D costs need to be taken into account.

    1. apple dose not make the chips TSMC dose. Apple designs the chips so maybe the R&D cost have increased but TSMC can build a better and faster chip. I imagine intel could have made customs chips for apple but I guess the cost would have been to much and too slow

    2. M1 shares CPU & GPU core design, secure enclave etc. with A-series. Sure, there’s still extra work, but after making the first M1 that extra is really not that much more than creating X variants for iPad Pro. Especially as they don’t need to design T-series and some other smaller chips that are now integrated and shared. They’ll also save money on OS / SW development in the long run by supporting only ARM in all platforms.

  3. Apple is saving more than just the cost of CPU & integrated GPU.

    M1 integrates RAM, everything that was on T2, and more. None of those other chips were free. Motherboard is also simpler and thus cheaper too.

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