Bank of America says Apple could save $500 million a year making own PC chips

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Apple has recently decided to ditch the Intel chips being used in its products. The company has decided to manufacture its own chips. Bloomberg reported that Apple is planning to ditch the Intel chips and opt for an in-house solution for its Mac computers from 2020 onwards.

The “insourcing of chips could benefit Apple by not being dependent on Intel’s processor cycles, by lowering the Mac costed bill-of-materials by ~$40-50, and by potentially streamlining and reducing R&D spend,” analyst Wamsi Mohan wrote in a note to the clients.

According to Mohan, Apple could improve the development time of its products by using the in-house chips.

“The benefit to Apple would be two-fold: 1) aggregating development across iOS and MacOS can help lower the overall cost of R&D by potentially combining development teams and potentially reducing time to market for new products and Apps, and, 2) internally developing the processor can help save some cost vs. purchasing the processors from Intel.”

According to him, Apple could end up saving up to 500 million dollars per year by opting for the in-house chips on its Mac lineup. He says that the low-end Macbooks will be the first device to use these chips.

Apple is already using custom-made chips on the iPad and iPhones which are proving to be a huge success when compared to the rival devices. The level of control that Apple gets by making both the hardware components and the software that runs on it is a huge factor in the great performance of the devices.

The recently released Samsung Galaxy S9 and S9+ running the latest Snapdragon 845 was unable to beat the iPhone 7 which runs the Apple A10 Fusion chip. The iPhone 7 was released in 2016. If Apple is able to replicate the performance on the hardware sector we could see more people opting for Macs as right now PCs running on the same component are a lot cheaper than the Macs.

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