Earlier quoted context omitted.
Apple differentiates the majority of their products by generation rather than binning. If you buy a low-end iPad, you get an A12; the iPad Air steps you up to an A14; and the iPad Pro gets you an M1. This is less evident on the Macintosh side of the business right now because they're just trying to get M1 silicon into as many product lines as their fab capacity will allow. They don't actually have an M2 (or even M1X)…
> Apple differentiates the majority of their products by generation rather than binning. This simplifies things for consumers, but how do you make chips without binning? Are they all just that reliable? Do they all have extra cores? Maybe Intel bins more because they can squeeze out a significantly better price for more core and cache, but Apple's margins are already so high they don't care?
1. "7-core GPU" M1 Macs, which have one of the eight GPU cores disabled for yield
2. The A12X, which also had one GPU core disabled (which was later shipped in an 8-core GPU configuration for the A12Z)
3. iPod Touch, which uses lower-clocked A10 chips
It's not like Apple is massively overbuilding their chips or has a zero defect rate. It's more that Intel is massively overbinning their chips for product segmentation purposes. Defect rates rarely, if ever, fit a nice product demand curve. You'll wind up producing too many good chips and not enough bad ones, and this will get worse as your yields improve. Meanwhile, the actual demand curve means that you'll sell far more cheap CPUs than expensive ones. So in order to meet demand you have to start turning off or limiting perfectly working hardware in order to make a worse product.
Apple doesn't have to do this because they're vertically integrated. The chip design part of the business doesn't have to worry about maximizing profit on individual designs - they just have to make the best chip they can within the cost budget of the business units they serve. So the company as a whole can afford to differentiate products by what CPU design you're getting, rather than what hardware has been turned off. Again, they aren't generating that many defects to begin with, and old chips are going to have better yields and cost less to make anyway. It makes more sense for Apple to leave a bit of money on the table at the middle of the product stack and charge more for other, more obviously understandable upgrades (e.g. more RAM or storage) at the high end instead.