If there was something missing from Apple’s catalog, it was undoubtedly the cheap MacBook. The non-Pro MacBook died a long time ago, the last attempt at a MacBook without a surname did not work, and that role of “affordable” laptop fell to the MacBook Air. That laptop was still missing to stand up to the 800-900 euro market that Windows dominated at will, and it turns out that Apple had the answer at home: the iPhone. Its processor, rather.
Because that’s what the MacBook neo is: the guts of an iPhone 16 Pro in a laptop chassis. In our analysis, we brought down to earth a little what was being said about the MacBook neo, but pointing out that it was not only a very interesting device for a wide range of users but also a blow to the PC market.
This is something that Apple does not want to miss, and it seems that they have bent MacBook neo orders. However, they now face the “neo dilemma.”
Stop or Pay More: The Neo Dilemma
To no one’s surprise, the MacBook neo performed amazingly in its first week. At 699 euros, it’s a perfect laptop for students or those of us who want a second computer, making it a hard option to reject.
There are cheap laptops, but not with comparable battery features, system speed, and build quality. To find something similar in the Windows market, you have to look at more expensive models. Amid a memory crisis, the basic version for 699 euros seemed particularly appealing. Apple expected strong sales, but perhaps not this strong.
Tim Culpan, a former Bloomberg reporter based in Taiwan, noted in his newsletter that Apple had initially planned to ship between five and six million MacBook neo units.
Tim Cook described the reception of the laptop as “a demand through the roof,” and Apple now has to take a decision to ensure the future of the device.
The MacBook neo utilizes A18 Pro chips that were not quite suitable for the high standards of the iPhone. This means that while the iPhone version has six GPU cores, the MacBook variant has only five. This is a common occurrence with processors that are downgraded for less expensive products.
Because of leftover shipments, Apple repurposed these processors for the laptop. These chips were pretty much “free” for Apple, but now they have to decide whether to let the inventory run out or contract TSMC for a new batch. They’ve opted for the latter.
In a recent publication, Culpan states that Apple aims to expand production to 10 million units, doubling their initial forecast.
However, placing a new order with TSMC for the A18 Pro chips would likely increase production costs significantly and narrow profit margins. Even though Apple is TSMC’s second-largest client, costs are climbing across the board.
Recently, Tim Cook mentioned to investors that Apple successfully avoided the RAM crisis’s initial wave because of accumulated stock, but this situation is diminishing. With inventory increasingly strained, Culpan suggests two potential scenarios:
- Eliminate the basic 256 GB option for 699 euros, keeping only the 512 GB version for 799 euros. This has been a strategy seen with other Apple products.
- Raise the prices of both options while adding extras, like extended cloud storage, to soften the blow, a tactic often used in the PC market.
However, the price increases don’t just stem from memory. Aluminum costs are rising too, and any increase in manufacturing costs will inevitably affect retail prices.
Another question arises: If Apple is now ordering a new batch of A18 Pro chips, will the new MacBook neo units be “better” by having all six GPU cores intact? TSMC won’t manufacture them limited unless required.
Apple could also consider software limiting one of the GPU cores. However, this would be the least of the company’s problems as component prices have increased significantly since the initial order.
What remains clear is that the user will ultimately bear the costs—whether through price hikes or the unavailability of products that simply can’t be acquired.
Apple finds itself in the “neo dilemma,” observing how the launch of an attractively priced product creates high demand in the context of this severe components crisis.