Cheaper Macs for increasing the market share?

[ArkSingularity]

Ill just post that Steve Jobs question and answer segment.

Thanks for sharing, I hadn't been able to find this again. What a gem.

Cheaper MacBooks would just cannibalise the current market. You might get new sales to MacOS virgins but long time Mac users will buy the cheap MacBooks instead of more expensive models.

It would if they made the SE too good, and I think that's part of Apple's dilemma. If they put it in the old-style MacBook Air case, upgraded some of the internals to use Apple-Silicon and kept all of the ports from that era, they could probably make a $750 MacBook with decent profit margins that wouldn't really cannibalize the current Air. But Apple has more or less moved away from that design, and it'd be hard to imagine them selling a non-thunderbolt 2017-style Air today.

I'd personally be thrilled if they did. I think that the Mac OS ecosystem is just better, and I would love to see more people on it (a $750 entry point would definitely bring people over). But I'm not sure if a MacBook SE is just wishful thinking, there also isn't really any precedent for it in the Mac market (besides the Mac Mini, which I guess has historically been Apple's solution to this).

 

[jz0309]

cheaper products don't help your margins, not going to happen. Besides PC market is shrinking, no growth ...

 

[sunny5]

Apple is not interested in market share. They sell high-end or premium products (like Ferrari), so for their nature they are not accessible to everyone. Integrity of the brand is the only concern.
In my personal opinion Apple in the last years has reached even too much market share (a decade ago it had maybe 6%).

Apple’s PC market are premium devices and workstation laptops, and they do exceedingly well in these categories (I wouldn’t be surprised if every second or third laptop sold over $1000 is a Mac). The question is also whether they actually want to increase the market share. I don’t think it’s possible without targeting folks who believe that a PC for over $500 is a waste of money, and there are just too many corners to be cut at that price. Besides, those folks are not necessarily the paying customer Apple wants.

So yeah, maybe, but I wouldn’t hold my breath. And I don’t think Apples PC market share will go above 20-25%, well, ever.

Not really

I've seen the interview from Apple saying that most of their sales are coming from laptop by 80% and most of them are MBA and cheap MBP when they were talking about Mac Pro sales. But clearly, Apple is getting benefits from entry level laptops, not high end or premium products unlike what you are thinking.

They are successfully increasing their market share and profits with cheap Apple products such as iPhone SE, iPad, and more. So why not?

 

[sunny5]

Cheaper MacBooks would just cannibalise the current market. You might get new sales to MacOS virgins but long time Mac users will buy the cheap MacBooks instead of more expensive models.

There is no prove for that. Beside, their profits are coming from entry level products, not high ends which is very obvious. Also, their Mac sale are mostly coming from MBA or other entry level Mac so I dont see that logic works.

 

[Pugly]

The entry level iPad is an amazing value, and I'm curious if Apple would bring the Mac down to that sort of price point. Apple did have the $899 11" MacBook Air, so I could see them shaving it down to $799 or so. And the Mac mini starts pretty low, so it's possible Macs could get cheaper.

It might be priced at a price just low enough to increase Services revenue.

 

[TechnoLawyer]

Keep the current M1 Air around after the new design comes out, drop the price. Maybe rename it the MacBook. Honestly, the 16gb version of the Air is good enough to stick around as a bargain option for the next 5+ years.

 

[schneeland]

cheaper products don't help your margins, not going to happen. Besides PC market is shrinking, no growth ...

Not recently. As far as I know, the PC market has been growing for the last two years (but it's unclear if the growth will persist as people start returning to the office).

Otherwise, I agree with @JPack for the most part - hardware replacement cycles have become quite long (my current machine is 6 years old and there's still no true need to replace it - other than, maybe, wanting new hardware ).

I think Apple might gain more market share if they offer cheap devices for an extended period of time, but I really don't see them do it. A more affordable MacBook (Air) will probably be offered, but that affordable in Apple terms and probably still in the mid to premium segment when compared to PC laptops.

 

[jz0309]

Not recently. As far as I know, the PC market has been growing for the last two years (but it's unclear if the growth will persist as people start returning to the office).

Otherwise, I agree with @JPack for the most part - hardware replacement cycles have become quite long (my current machine is 6 years old and there's still no true need to replace it - other than, maybe, wanting new hardware ).

I think Apple might gain more market share if they offer cheap devices for an extended period of time, but I really don't see them do it. A more affordable MacBook (Air) will probably be offered, but that affordable in Apple terms and probably still in the mid to premium segment when compared to PC laptops.

PC market has seen an uptick due to the pandemic, look at the numbers over that past 10 years ... it will go down, you see it coming as RAM/flash prices are starting their way down ...
The Dell/HP etc will start pricing decreases to maintain market share, they will always be able to undercut Apple, and Intel will happily play to not lose anymore marketshare. Offering "cheaper" Macs would not be a wise move by apple

 

[Xiao_Xi]

their profits are coming from entry level products, not high ends which is very obvious.

I could imagine that people who make money on a computer are less price sensitive than people who don't. So it would make sense that Apple could have a higher margin on their Pro products.

 

[Absrnd]

Look at this forum, if Apple would make cheaper hardware, the amount of users whining and complaining about Apple hardware would increase ten fold.
This forum is only slightly bearable because it also has a percentage of good information, but at product launch, all the idiots and screamers on a soapbox, come out of the woodwork

 

[sunny5]

I could imagine that people who make money on a computer are less price sensitive than people who don't. So it would make sense that Apple could have a higher margin on their Pro products.

Dont forget that Apple force people to buy higher options even if they sell entry level Macs such as RAM, storage, and chip.

 

[Andrea Filippini]

Not really

I've seen the interview from Apple saying that most of their sales are coming from laptop by 80% and most of them are MBA and cheap MBP when they were talking about Mac Pro sales. But clearly, Apple is getting benefits from entry level laptops, not high end or premium products unlike what you are thinking.

They are successfully increasing their market share and profits with cheap Apple products such as iPhone SE, iPad, and more. So why not?

Our concept of "Cheap Apple product" is not the same as "Cheap market product".
Cheap Apple product is dramatically more expensive than cheap market product (Windows for desktops/laptops as benchmark and Android for smartphones as benchmark).
Cheap Apple product is already a high-end product and the custom version is for even more demanding users.
We can't compare a laptop with Celeron/i3 CPU versus a MacBook Air with M1 CPU.
Apple can benefit from entry level laptops also due to cognitive bias: people expends the maximum for goods that can't afford.
Market share is not the only benchmark for a business activity. Do you think that valuable brands like Ferrari and Patek Philippe are interested in market share? I don't think so.

 

[southerndoc]

There's a few issues at play:

1) PC replacement cycle - most organizations replace their computers between 3-5 years. Home users take even longer. The full effect of M1 won't be seen until a few more years.

What organization replaces their computers every 3-5 years? Definitely not the healthcare industry. I've been practicing at the same hospital full-time, same hospital part-time, and at a county fire department, and in the 10+ years I've been there, they are still using the same computers. The computers get replaced when they stop working not on any schedule. These are computers that are used continuously 24/7. My hospital got new computers for the ER because we built a brand-new ER. The old ER was converted to a surgical recovery unit and they are still using the same computers we had in the old ER which have been there since I started practicing there 14 years ago.

 

[cnnyy20p]

Don’t worry the new MacBook Air will start at 1299 again like they always do. /s

 

[velocityg4]

While I'm not sure if M1 could come down enough in price. I could see a Mac Micro running something like the A15 with 8GB RAM and 256GB SSD. In the $400 range. Set in a case about the size of the iPhone SE.

That would provide plenty of performance for the average user. Going by Geekbench the A15 beats something like an i7-1065G7. They could even make a cheap netbook with something like the iPad screen and a nice bottom case for the trackpad, battery and keyboard. For a bit more.

Maybe the M1 could come down in price. Once TSMC is ready with the 3nm nodes. As right now there's just way too much demand for 5nm.

 

[leman]

Not really

I've seen the interview from Apple saying that most of their sales are coming from laptop by 80% and most of them are MBA and cheap MBP when they were talking about Mac Pro sales. But clearly, Apple is getting benefits from entry level laptops, not high end or premium products unlike what you are thinking.

But in the wider PC context Air is a premium-level laptop. It’s not about performance, it’s about features and quality. Cheap PC laptops start at $400 or so.

They are successfully increasing their market share and profits with cheap Apple products such as iPhone SE, iPad, and more. So why not?

Oh, I would absolutely welcome a cheaper Apple entry-level notebook. I’m just not sure it will happen.

 

[JPack]

What organization replaces their computers every 3-5 years? Definitely not the healthcare industry. I've been practicing at the same hospital full-time, same hospital part-time, and at a county fire department, and in the 10+ years I've been there, they are still using the same computers. The computers get replaced when they stop working not on any schedule. These are computers that are used continuously 24/7. My hospital got new computers for the ER because we built a brand-new ER. The old ER was converted to a surgical recovery unit and they are still using the same computers we had in the old ER which have been there since I started practicing there 14 years ago.

Healthcare is a known outlier in terms of PC replacement cycles, similar to education, manufacturing, and retail.

That’s because your clients come to you. You purchase very few notebooks as a result (why buy expensive notebooks that can break?). As a result, the computers don’t break and don’t have to be replaced as often. There’s also the big issue of specialized software for healthcare which is expensive and has a long life cycle.

Most industries like finance, IT, and government where staff face a computer monitor for 7 hours a day will replace their computers every 3-5 years.

 

[sunny5]

But in the wider PC context Air is a premium-level laptop. It’s not about performance, it’s about features and quality. Cheap PC laptops start at $400 or so.

And not all people buy premium level laptop. That's why their market share never increased from 15%. Also, cheap laptop starts at $200.

Oh, I would absolutely welcome a cheaper Apple entry-level notebook. I’m just not sure it will happen.

M1 MBA with education discount started at $800 before. Since it's almost 2 years old, they can start lowering the price for entry level Macs when M2 Macs come out.

 

[JPack]

While I'm not sure if M1 could come down enough in price. I could see a Mac Micro running something like the A15 with 8GB RAM and 256GB SSD. In the $400 range. Set in a case about the size of the iPhone SE.

That would provide plenty of performance for the average user. Going by Geekbench the A15 beats something like an i7-1065G7. They could even make a cheap netbook with something like the iPad screen and a nice bottom case for the trackpad, battery and keyboard. For a bit more.

Maybe the M1 could come down in price. Once TSMC is ready with the 3nm nodes. As right now there's just way too much demand for 5nm.

iPad Air already has M1 for $599. If you cross your fingers and tell Apple you’re a student or parent, Apple is happy to sell it for $549.

Apple could easily build and sell a M1 MacBook for $749. The issue is that Apple doesn’t want to sell low-end devices because of the relatively poor experience.

Heck, Apple could simply allow the $199 Apple TV to run macOS. But again, it’s not what Apple wants. The low margin business isn’t worth it to them.

 

[sunny5]

iPad Air already has M1 for $599. If you cross your fingers and tell Apple you’re a student or parent, Apple is happy to sell it for $549.

Apple could easily build and sell a M1 MacBook for $749. The issue is that Apple doesn’t want to sell low-end devices because of the relatively poor experience.

Heck, Apple could simply allow the $199 Apple TV to run macOS. But again, it’s not what Apple wants. The low margin business isn’t worth it to them.

Define poor experience.

 

[Xiao_Xi]

Dont forget that Apple force people to buy higher options even if they sell entry level Macs such as RAM, storage, and chip.

I could imagine that MBP buyers choose more extras than MBA buyers because they are less price sensitive. I could understand that the base MBA is very popular, while the base MBP is not.

Have any analysts published which configurations are the most popular?

 

[JPack]

Define poor experience.

Sub-M1 performance
Sub-WQXGA resolution
Sub-400 nit display
Sub-50 Whr battery
ABS top/bottom cover instead of aluminum

These are all things that work well in the PC notebook market, but Apple doesn't want to fight in the trenches.

 

[sunny5]

Sub-M1 performance
Sub-WQXGA resolution
Sub-400 nit display
Sub-50 Whr battery
ABS top/bottom cover instead of aluminum

These are all things that work well in the PC notebook market, but Apple doesn't want to fight in the trenches.

What you mentioned are PC laptops, not MBA. I'm talking about selling entry level Macs at lower price. So what's the poor experience for selling M1 Mac mini and M1 MBA at lower price? I dont see any issues for selling cheaper M1 Macs.

 

[Madhatter32]

I think Apple could increase market share substantially by licensing MacOS to a third party manufacturer that would agree to make a base level laptops in volume with a deprecated chipset. It would increase MacOS usage while not competing with Apple on the premium hardware front. A company like Dell would do it in a heartbeat.

 

[JPack]

What you mentioned are PC laptops, not MBA. I'm talking about selling entry level Macs at lower price. So what's the poor experience for selling M1 Mac mini and M1 MBA at lower price?

Lower margins for Apple. There's brand value you haven't considered. By selling cheap stuff, Apple has less ability to command prices at the high end because of the diluted brand.

We know for example, macOS runs on A12Z because that's what the DTK was using. Apple could use A14 for an entry level MacBook.

What you're thinking of, Apple has already thought of. It's easy to sell cheap stuff to get market share, but hard to sell high margin expensive products.