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M1 CPU could help Apple save $2.5 billion this year

M1 CPU could help Apple save $2.5 billion this year

Apple Silicon or the company’s new CPU called M1, can save the Cupertino giant 2,5 billion dollars just this year.

According to the calculations of Sumit Gupta, the head of Artificial Intelligence strategy at IBM, it would cost Apple between 40 and 50 dollars to produce its famous Apple M1 processor, which implies an enormous economic saving compared to the cost of acquisition of Intel’s processors.

Intel Core i5 processors for the previous generation of the company’s computers costed them $200 a unit, which translates into a huge savings in the manufacture of its new batch of computers MacBook Air, MacBook Pro and Mac Mini.

We should also note that this huge price difference has not been reflected in the selling price of their products.

Anyway, let’s calculate…

Cost of the ARM-based Apple M1 processor: $40-$50

Intel Core i5 Dual-Core for MacBook Air: $175-$200

Intel Core i5 Quad-Core for MacBook 13 entry range: $225-$250

The cost of MacBooks with Intel:

MacBook 13: 8.6M units x $250 = $2.15 billion

MacBook Air: 5.4M units x $200 = $1.07 billion

Total = $3.2 billion

The cost of MacBooks with the Apple M1:

MacBook 13: 8.6 M units x $50 = $268 million

MacBook Air: 5.4M units x $200 = $429 million

Total = $697 million

It’s a $2.5 billion savings for Apple…

As you can see, Apple was not only looking to launch its own processors thinking of creating a product focused on their needs, but also at a cost level it is a much juicier move. The company’s flagship product is the iPhone, and then the royalty income it receives with its App Store, so while the sale of equipment generates much less revenue, with creating M1 CPU, Apple ensures a significant increase in profit margins and a great save in costs.