While I am happy that the Neo is a huge hit [0] I'm not about to feel bad for Apple here. "Oh no, they won't make quite as much money on their blockbuster hit". They will be just fine.
[0] Not because I care that Apple makes a lot of money from this but because it widens the Mac install base which can only be a good thing for a platform that has languished as of late. While the hardware is top-notch (pun intended), the software leaves quite a bit to be desired. Hopefully the popularity of this device will result in more resources allocated to the Mac platform.
For anyone not interested in reading the whole article, apparently Apple is running out of binned, slightly damaged but still usable chips from earlier production, chips to use in the MacBook Neo series. So the actual problem is simply:
> In any case, Apple could opt to keep the starting price of current and future MacBook Neo models at $599 and simply accept lower profit margins on the laptop, especially given that it attracts customers to the macOS and broader Apple ecosystem.
A company having slightly lower margins does not seem like an actual issue. It doesn't even sound like they would end up loosing money on this device just lower their own margin.
> A company having slightly lower margins does not seem like an actual issue. It doesn't even sound like they would end up loosing money on this device just lower their own margin.
It's more than just lower margins though, sounds like they're chowing through whatever stockpile of binned A18 chips they had earmarked for the Neo and once they're gone, they're gone.
Replenishing A18 stock comes with the opportunity cost of sacrificing TSMC production to manufacture more A18s, but because they're using binned chips in the Neo, a fresh manufacturing run will produce A18s in whatever ratio that splits good chips with binned chips. Apple has no need for good A18s anymore, so they'll need to make a choice whether to handicap the chip so newer Neos match the marketed specifications and performance characteristics of other Neos of the same generation OR release a lacklustre out-of-cycle update to the Neo.
Sounds like a logistical nightmare to be honest. They've been producing iPhones for nearly two decades now, their supply chain forecasts must be so well tuned to be almost perfect. That is, until the Neo.
How did that possibility even get past Tim Cook, THE supply chain guy? Seems entirely predictable, if not preventable. The sales really exceeded their expectations that much?
> The sales really exceeded their expectations that much?
Windows 11 demands TPM 2.0 which means that your old laptop may not be upgradable and yet support for Windows 10 has dropped. And add in a dash enshittification via AI and no real local login options.
There were a lot of people who were looking for a new laptop just as Apple dropped this.
How could Apple predict Microsoft shooting itself in both feet and the head right before they dropped a really nice cheap laptop?
I mean, it occasionally happens. Predictions are by definition not set in stone. I think there were a few iPhone generations that underestimated demand in China, a few iPhone models that overestimated, I think the 5c was the most notable.
They could, and that would solve one problem but then create another: you have to package and launch an entirely new product with no warning. And if you price it the same as the old model you're still going to piss off a lot of customers.
Who would have guessed that afortable prices for an Apple product would create a blockbuster if it actually delivers better quality than the rest of the market that utilizes Windows etc.?
I believe that Apple targets Google, not Windows. It is Android and the Chrome Book Apple is taking on, not Windows machines.
I feel sorry about the Neo. To me Tim Cook is the one that evolved Apple into a luxury brand. The pricing doesn't really appeal to device power, but luxury tiers.
I only buy Apple because I use them for work and can write them off. I bet Apple factored this into their strategy.
And of course with the the lastest UI update, let's not talk about quality.
I hope that the Neo doesn't evolve into Apple's black sheep, but makes them reconsidering their pricing. I have a very bad feeling, that the Neo may paradoxically cause a price hike, in order to keep its image as luxury brand.
Why?
Because we already had the low cost line called SE, that now is called "e".
So Apple might introduce a new line with an iPhone Neo, iPad Neo and so on.
I am curious whether the Neo actually is bought as a second device or first time device. I hope for the later.
And to make it clear: I dislike Apple's pricing. Did I mention the subscription on top...?
Isn't it obvious? They already offer financing on new machines with the Apple Card. You can put your iPhone or new Mac on an installment program. It's been around since at least 2020.
I must be missing something here. I don't disagree with anything you've said. My top comment is heavily downvoted. I am not saying I like this development.
> when it seems pretty obvious what Apple's strategy is here.
The concept of financing an expensive thing is overwhelmingly mundane and widespread. The word "obvious" means "self evident". Unless that logic also applies to all the other companies through time that provided financing, it is not self evident, since they're all contradictory evidence to your view of Apple's strategy (since it was not those other companies goal)! You're claiming that the motivations of financing applies differently to Apple than all other companies that use it, but not giving evidence why you think that, making it all an opinion/guess, not something obvious to anyone else.
Based on what evidence? This is the "making things up" the reply alluded to. It's not even remotely obvious to me, and I disagree with your concussion. Hardware is 75% of Apple's revenue
[0] Not because I care that Apple makes a lot of money from this but because it widens the Mac install base which can only be a good thing for a platform that has languished as of late. While the hardware is top-notch (pun intended), the software leaves quite a bit to be desired. Hopefully the popularity of this device will result in more resources allocated to the Mac platform.