Yes, but they didn't have a 13", 14", 16" laptops with a rumored 15" MBA on the way
Btw, if it was selling well and apple was making a profit, I don't think they would have discontinued it.
With the iPod they had incremental products at every +$50 or +$100 price points.
I think the lowest it got was $99 with the top end selling $599?
Same with iPhones with the iPhone SE, at its lowest, priced at $329(?) then topping off at $1,599 for the 1TB iPhone Pro Max?
If the profit margin can be kept and the material cost are kept to target, parts availability is there then I do not see any reason why an iPhone chip cannot be used in a Mac priced below that of any M1 Mac.
This occured most recently with the Homepod. Originally it was priced $329 then dropped to $299 to help stimulate demand. It eventually got discontinue probably because it was too expensive to make.
It made its return this month probably because Procurement was able to negotiate prices lower for the parts & services in conjunction with a more economic redesign.
Going back to a Mac powered by an iPhone chip... at the price I described it only needs to do what the Macbook Retina did.
Correction on my end I was referring to the Macbook Retina that was marketed 2015-2019that used an ultra-low voltage Intel Core M chip that had a TDP of 4.5W. Not the much earlier Macbook from 2006-2012.
Per measurement of the 2022 Apple TV 4K at wall socket power consumption it uses less than 2.5W of power. The chip, just itself probably edging towards 1W?
A A17 Bionic 3nm chip that will come out by Sep 2023 will have more raw performance than a 2012 Core i7 22nm chip found in the top end BTO 2012 iMac 27".
A handicap on that iPhone chip may be I/O ports required by macOS. That limitation was shown with the M1 with many people complaining about its lack of I/O ports that they have come to expect on above base model Intel Macs.