6 ms·

Bingo. Estimates vary wildly, but I've seen figures saying that Axx CPUs cost Apple about $50 each. Even if it's more like $100, that's still an insane amount o

Bingo. Estimates vary wildly, but I've seen figures saying that Axx CPUs cost Apple about $50 each. Even if it's more like $100, that's still an insane amount of additional profit per unit to be extracted. They don't need to deal with single-supplier hassles and they get much more control over what cores go into their SoC. This is sort-of-OK for consumers but amazing for Apple and its shareholers.

snemvalts 6y ago
Apple's services already make more money than their Mac business. There aren't enough macs sold for this to have a big impact
- AnthonyMouse 6y ago
  Even on the hardware side, they sell more than ten times as many iPhones as Macs.
jacurtis 6y ago
You could also argue that significant cuts to costs of already-profitable Mac computers, could lead to significantly higher sales volumes. Greater marketshare also provides more value to shareholders meaning that shareholders still win, as do consumers. More people with macs (and probably iPads/iPhones) would also increase other profit centers for Apple such as services (their highest profit center), warranties, and accessories. The profits and loyalty from these could easily far outweigh the $100-$300 of extra margin they might gain from keeping Mac prices the same. Meaning that price cuts to macs might actually be more strategically beneficial (to EVERYONE) than hoarding higher margins.
askafriend 6y ago
> amazing for Apple and its shareholers This only makes sense if you know nothing about Apple's business. You really think they're doing this to save $50 from ~5m Macs? You really think all this upheaval is for a mere $250m a year in savings? It'll cost them 10x that in pain alone to migrate to a new platform. Come on now....$250m is nothing at Apple scale. Think bigger. Even if you hate Apple, think bigger about their nefariousness (if your view is that they have bad intentions - one I don't agree with).
- alharith 6y ago
  It also only makes sense if you know nothing about economics in general. Lowering the price while maintaining existing margins just opens the door to more consumers available to purchase the product and overall increases shareholder value due to more sales.
- thefounder 6y ago
  I'm not sure how you calculated that but they sell about 20m macs per year not 5m. I also doubt the chips cost them 50$ per unit. The savings may worth few billions so it's not really like nothing. And they wouls save this every year. Will this change cost them 10x in pain alone? I doubt it. They already make the chips.
  - askafriend 6y ago
    > I'm not sure how you calculated that but they sell about 20m macs per year not 5m Quarterly numbers come in between 4.5-5m units these days but point taken - I recalled numbers for the wrong timeframe. > I also doubt the chips cost them 50$ per unit. The savings may worth few billions so it's not really like nothing. The true cost of this move is reflected in more than the R&D. This is a long multi-year effort involving several parties with competing interests. People are talking here as if they just flipped a switch to save costs. Let me make this clear. In my view, this is an offensive/strategic move to drive differentiation, not a defensive move to save costs (though if this works, that could be a big benefit down the road). Apple has a long history of these kinds of moves (that don't just involve chips). This is the same response I have to people peddling conspiracy theories that Apple loves making money off of selling dongles as a core strategy (dongles aren't the point, wireless is; focusing on dongles is missing the forest for the trees).
    - lazysloth 6y ago
      You aren't making anything clear, just straw man arguments. Apple switches architecture when it suits them, you think they switched from powerpc to intel was for differentation? Nope, it was cost and performance aka value.
ogre_codes 6y ago
I suspect the big motivation for Apple is less about squeezing a few dollars more profit per system and more about shipping systems which just aren't possible on Intel's roadmap. Just putting the A12Z into the previous 12" MacBook would be a massively better computer with better battery life, better performance, and significantly less expensive. All while Apple maintains their margins. This isn't a zero sum game. Being able to ship less expensive computers which perform better is a win for consumers and Apple shareholders at the some time. The only loser here is Intel.
- zerkten 6y ago
  > Just putting the A12Z into the previous 12" MacBook would be a massively better computer with better battery life, better performance, and significantly less expensive. All while Apple maintains their margins. Don't we basically know that from the Surface X?
  - ogre_codes 6y ago
    > Don't we basically know that from the Surface X? Don't have to venture that far, we know it from the iPad Pro.
  - mlindner 6y ago
    Microsoft doesn't control the hardware very much and definitely doesn't control the software developers whereas Apple completely controls the former and has a lot of leverage with the latter.
- tonyedgecombe 6y ago
  You can see that with the latest MacBook Pro 13", if you buy one of the cheaper devices it comes with last years processors. Intel are clearly having problems meeting customer demand.
michaelmrose 6y ago
Cost of cpu is unit cost + all other costs including r and d divided by units. We also don't arrive at a reasonable estimate of unit costs by taking a range of estimates and picking the estimate most favorable to our position. I also don't believe it's reasonable to assume that switching to arm is as simple as putting an iPad cpu into a laptop shell. Here is an estimate that their 2018 model costs 72 just to make not to design and make. https://www.techinsights.com/blog/apple-iphone-xs-max-teardown https://www.techinsights.com/blog/apple-iphone-xs-max-teardo... The a14 that will power a MacBook is likely going to be more expensive not less. Especially with 15B transistors on the a14 vs less than 7B on a12. Average selling price of Intel cpu looks like around $126. This includes a lot of low end cpus which is exactly the kind of cpu apple fans like to compare. Apple may realize greater control and better battery life with the switch but they won't save a pile of money and thoughts about increasing performance are fanciful speculation that Apple, the people with the expertise are too smart to engage in.
- TheOtherHobbes 6y ago
  Indeed. Apple is going to have to eat R&D costs that were previously bundled in Intel's pricing. And Mac sales are relatively small compared to the Windows market, so economies of scale are going to be less significant. Which means the actual per-CPU fab cost is going to become a smaller part of the complete development and production cost of a run. And that total cost is the only one that matters. I expect savings can still be made, because Apple will stop contributing to Intel's profits. On the other hand I'm sure Apple was already buying CPUs at a sizeable discount. Either way it's an open question if Apple's margins are going to look much healthier. IMO an important motivation is low power/TDP for AR/VR. Ax will also eventually give Apple the option of a single unified development model, which will allow OS-specific optimisations and improvements inside the CPU/GPU. Ax has the potential to become MacOS/iOS/A(R)OS on a chip in a way that Intel CPUs never could.
72deluxe 6y ago
They’ll pass the savings onto the consumers though right?? I mean, a fully specced MacBook costs over £3000 which seems expensive... Here’s hoping anyway!!
- imtringued 6y ago
  Sure, they'll pass the $50 savings on. You are overestimating how much a CPU costs...
  - wooger 6y ago
    It's more than just a CPU though - this will make the components of a Mac massively similar to an iPad, and probably save money on many other components. It also removes any need for a dedicated GPU in their high-end laptops, which is probably $200 alone. I have no idea how they justify the prices for their lower end laptops as-is, as they have worse screen and performace than recent iPads in pretty much all cases.
m463 6y ago
But customers are going towards an entirely entirely closed everything. ios is apple languages, apple signature required to run code, apple processors. Desktop machines are the last bit of freedom in the apple ecosystem. This isn't "sort-of-ok", it's "bad-for-customers" and "bad-for-developers".
- nisten 6y ago
  This is just my opinion but I think it's great for consumers and a good restriction for developers. As a consumer you shouldn't be running unsigned software because you're putting not only your data at risk but any data you have access to. And as a developer on mac you can still run anything reasonably well in a VM. If you're using node, you should be running that in a virtualized environment in the first place, albeit I'm too lazy myself to always set that all up. Actually it's pretty amazing that now we'll be able to run an entire x86 OS environment on an ARM chip and get very usable performance too.
  - HeadsUpHigh 6y ago
    As someone on linux I've never run signed software ever in my life. Guess I've lost all my data and haven't even noticed!
    - m463 6y ago
      Linux signs its software.
      - HeadsUpHigh 6y ago
        I mean signed by Apple or any big corporation.
    - willtim 6y ago
      Are you sure? Packages are signed for most of the mainstream distributions.
  - dwaite 6y ago

snemvalts 6y ago

Apple's services already make more money than their Mac business. There aren't enough macs sold for this to have a big impact

AnthonyMouse 6y ago
Even on the hardware side, they sell more than ten times as many iPhones as Macs.

jacurtis 6y ago

You could also argue that significant cuts to costs of already-profitable Mac computers, could lead to significantly higher sales volumes. Greater marketshare also provides more value to shareholders meaning that shareholders still win, as do consumers. More people with macs (and probably iPads/iPhones) would also increase other profit centers for Apple such as services (their highest profit center), warranties, and accessories. The profits and loyalty from these could easily far outweigh the $100-$300 of extra margin they might gain from keeping Mac prices the same. Meaning that price cuts to macs might actually be more strategically beneficial (to EVERYONE) than hoarding higher margins.

askafriend 6y ago

> amazing for Apple and its shareholers This only makes sense if you know nothing about Apple's business. You really think they're doing this to save $50 from ~5m Macs? You really think all this upheaval is for a mere $250m a year in savings? It'll cost them 10x that in pain alone to migrate to a new platform. Come on now....$250m is nothing at Apple scale. Think bigger. Even if you hate Apple, think bigger about their nefariousness (if your view is that they have bad intentions - one I don't agree with).

alharith 6y ago
It also only makes sense if you know nothing about economics in general. Lowering the price while maintaining existing margins just opens the door to more consumers available to purchase the product and overall increases shareholder value due to more sales.
thefounder 6y ago
I'm not sure how you calculated that but they sell about 20m macs per year not 5m. I also doubt the chips cost them 50$ per unit. The savings may worth few billions so it's not really like nothing. And they wouls save this every year. Will this change cost them 10x in pain alone? I doubt it. They already make the chips.
- askafriend 6y ago
  > I'm not sure how you calculated that but they sell about 20m macs per year not 5m Quarterly numbers come in between 4.5-5m units these days but point taken - I recalled numbers for the wrong timeframe. > I also doubt the chips cost them 50$ per unit. The savings may worth few billions so it's not really like nothing. The true cost of this move is reflected in more than the R&D. This is a long multi-year effort involving several parties with competing interests. People are talking here as if they just flipped a switch to save costs. Let me make this clear. In my view, this is an offensive/strategic move to drive differentiation, not a defensive move to save costs (though if this works, that could be a big benefit down the road). Apple has a long history of these kinds of moves (that don't just involve chips). This is the same response I have to people peddling conspiracy theories that Apple loves making money off of selling dongles as a core strategy (dongles aren't the point, wireless is; focusing on dongles is missing the forest for the trees).
  - lazysloth 6y ago
    You aren't making anything clear, just straw man arguments. Apple switches architecture when it suits them, you think they switched from powerpc to intel was for differentation? Nope, it was cost and performance aka value.

ogre_codes 6y ago

I suspect the big motivation for Apple is less about squeezing a few dollars more profit per system and more about shipping systems which just aren't possible on Intel's roadmap. Just putting the A12Z into the previous 12" MacBook would be a massively better computer with better battery life, better performance, and significantly less expensive. All while Apple maintains their margins. This isn't a zero sum game. Being able to ship less expensive computers which perform better is a win for consumers and Apple shareholders at the some time. The only loser here is Intel.

zerkten 6y ago
> Just putting the A12Z into the previous 12" MacBook would be a massively better computer with better battery life, better performance, and significantly less expensive. All while Apple maintains their margins. Don't we basically know that from the Surface X?
- ogre_codes 6y ago
  > Don't we basically know that from the Surface X? Don't have to venture that far, we know it from the iPad Pro.
- mlindner 6y ago
  Microsoft doesn't control the hardware very much and definitely doesn't control the software developers whereas Apple completely controls the former and has a lot of leverage with the latter.
tonyedgecombe 6y ago
You can see that with the latest MacBook Pro 13", if you buy one of the cheaper devices it comes with last years processors. Intel are clearly having problems meeting customer demand.

michaelmrose 6y ago

Cost of cpu is unit cost + all other costs including r and d divided by units. We also don't arrive at a reasonable estimate of unit costs by taking a range of estimates and picking the estimate most favorable to our position. I also don't believe it's reasonable to assume that switching to arm is as simple as putting an iPad cpu into a laptop shell. Here is an estimate that their 2018 model costs 72 just to make not to design and make. https://www.techinsights.com/blog/apple-iphone-xs-max-teardown https://www.techinsights.com/blog/apple-iphone-xs-max-teardo... The a14 that will power a MacBook is likely going to be more expensive not less. Especially with 15B transistors on the a14 vs less than 7B on a12. Average selling price of Intel cpu looks like around $126. This includes a lot of low end cpus which is exactly the kind of cpu apple fans like to compare. Apple may realize greater control and better battery life with the switch but they won't save a pile of money and thoughts about increasing performance are fanciful speculation that Apple, the people with the expertise are too smart to engage in.

TheOtherHobbes 6y ago
Indeed. Apple is going to have to eat R&D costs that were previously bundled in Intel's pricing. And Mac sales are relatively small compared to the Windows market, so economies of scale are going to be less significant. Which means the actual per-CPU fab cost is going to become a smaller part of the complete development and production cost of a run. And that total cost is the only one that matters. I expect savings can still be made, because Apple will stop contributing to Intel's profits. On the other hand I'm sure Apple was already buying CPUs at a sizeable discount. Either way it's an open question if Apple's margins are going to look much healthier. IMO an important motivation is low power/TDP for AR/VR. Ax will also eventually give Apple the option of a single unified development model, which will allow OS-specific optimisations and improvements inside the CPU/GPU. Ax has the potential to become MacOS/iOS/A(R)OS on a chip in a way that Intel CPUs never could.

72deluxe 6y ago

They’ll pass the savings onto the consumers though right?? I mean, a fully specced MacBook costs over £3000 which seems expensive... Here’s hoping anyway!!

imtringued 6y ago
Sure, they'll pass the $50 savings on. You are overestimating how much a CPU costs...
- wooger 6y ago
  It's more than just a CPU though - this will make the components of a Mac massively similar to an iPad, and probably save money on many other components. It also removes any need for a dedicated GPU in their high-end laptops, which is probably $200 alone. I have no idea how they justify the prices for their lower end laptops as-is, as they have worse screen and performace than recent iPads in pretty much all cases.

m463 6y ago

But customers are going towards an entirely entirely closed everything. ios is apple languages, apple signature required to run code, apple processors. Desktop machines are the last bit of freedom in the apple ecosystem. This isn't "sort-of-ok", it's "bad-for-customers" and "bad-for-developers".

nisten 6y ago
This is just my opinion but I think it's great for consumers and a good restriction for developers. As a consumer you shouldn't be running unsigned software because you're putting not only your data at risk but any data you have access to. And as a developer on mac you can still run anything reasonably well in a VM. If you're using node, you should be running that in a virtualized environment in the first place, albeit I'm too lazy myself to always set that all up. Actually it's pretty amazing that now we'll be able to run an entire x86 OS environment on an ARM chip and get very usable performance too.
- HeadsUpHigh 6y ago
  As someone on linux I've never run signed software ever in my life. Guess I've lost all my data and haven't even noticed!
  - m463 6y ago
    Linux signs its software.
    - HeadsUpHigh 6y ago
      I mean signed by Apple or any big corporation.
  - willtim 6y ago
    Are you sure? Packages are signed for most of the mainstream distributions.
- dwaite 6y ago