GoKawiilApple killed off the baseline Mac Mini, raising the entry price of its cheapest desktop from $599 to $799. Could it pull a similar move with its cheapest laptop?
In his Culpium newsletter, Tim Culpan reports that Apple is preparing a new production run of the MacBook Neo, upping the number of units to 10 million from its initial run estimated to be between 5 and 6 million. Having exhausted its supply of A18 Pro processors leftover from the iPhone 16 Pro, Apple will need to manufacture a fresh batch of A18 Pro chips for these new Neos.
The cost of producing new chips instead of simply dipping into an existing supply of "binned" parts will cut into the Neo's profit margins. Faced with slimmer margins, Apple could stop selling the $599 model, says Culpan, and position the $699 MacBook Neo as the entry point.
Neo recap
Let's back up and recap the situation that Apple finds itself in with the MacBook Neo.
The MacBook Neo is released in March and becomes an instant hit. "We were very bullish on the product before announcing it, but we under-called the level of enthusiasm that would be with it," CEO Tim Cook said last week in Apple's Q2 earnings call.
With the Neo flying off store shelves, Apple is running through its supply of Neos faster than it anticipated. With next year's update too far away to meet Neo demand, it needs to make more of the current model. And this requires Apple to spend money to make millions of A18 Pro chips, a cost it didn't incur for the initial supply of Neos.
The MacBook Neo is based on a binned version of Apple's A18 Pro processor from the iPhone 16 Pro. Matt Elliott/CNET
At the heart of the MacBook Neo are binned versions of the A18 Pro chip that Apple made for the iPhone 16 Pro. These binned chips have a slight manufacturing defect in one of their six integrated graphics cores and weren't used in the iPhone 16 Pro. (That's why the MacBook Neo is listed as having five GPU cores, while the iPhone 16 Pro has six.)
Faced with increased manufacturing costs for this second run of Neos, Apple might not like the math it sees for the baseline $599 model that students can scoop up for $499 with Apple's education discount -- especially when you also factor in the rising costs of computer memory and storage.
... continue reading