Pricing for AS MacBooks?

[EntropyQ3]

This post reads like something out of the 1990s. Just for kicks and giggles, name a healthy manufacturer of Windows-based towers or laptops.

Healthy, no problem.
Apple healthy (and profit margins) doesn’t exist among PC manufacturers, but then again, they don’t sell iPhones, those parts of Apple live in a different industry.

And we are talking about Macs here, not phones, and while my inner tech-geek is thrilled that Apple will no longer put intel tech in nice dressing but are actually investing more in Macs, that doesn’t mean that the new Macs will mean much of anything, other than frustration for users whose software needs doesn’t quite align with such a change.

I doubt Apple makes this transition to loose market share. So what are they going to offer to lure Windows users to transition? Because the offer to come over without necessarily leaving their software behind is now lost, and that is a big deal for that category - something that 20% higher performance with 30% longer battery life doesn’t change much, because the bulk of consumers and administrations are already served adequately by Windows systems.

If Apple wants to grow their Mac business, they have to provide a good deal. Apple owned 90% or more of $1000+ system sales in 2010 already, they can’t grow in that part of the market as they largely already own it and have for years. Which is why I believe that they will leverage reduced component costs to become more competitive.

It might be that they will instead use it to boost their Mac margins, but I can’t see that making much of a difference to their bottom line overall. It would constitute a wasted opportunity to materially affect the computer market however.
As I said, we’ll see in a week.

 

[motomotomoto]

Yeah we do.

SoC will most likely have more cores than iPad Air A14 and run at higher clocks.
Memory type is most likely LPDDR4X.
SSD will most likely just be the usual 256/512/1/2/4/8 options.
It'll most likely be WIFI 6 because that's what the iPhone and iPad have.

Edit: and if Apple is reusing the same design? Then yeah, we know exactly how many ports these machines may have, and exactly what ports those are.

And battery life? Obviously won't be that much more than the iPad Air with A14... and that one lasts about 10 hours.

What don't we know aside from price?

The only thing you know on here is that they are reusing the design, and that’s a rumor.

 

[iPadified]

Apple has an additional earner called services. Cheaper computers will attract more to the Apple garden and its services. They can easily earn back 300 USD from a MacBook Air priced at 1000 USD instead of 1299 USD.

Ive/Jobs went for the high end crowd but we may not necessarily see that in todays Apple. Look at iPhone or iPads as examples (OK the extreme low end is not addressed by Apple). I expect this will increasingly happen with Mac as well. The reason: services as earners.

I would like to see a 1000 USD 13 inch Macbook and iMac 24 inch as gateway to services and web apps.

 

[Spindel]

I believe they will be a bit cheaper (or maybe about the same).

But I also believe that the cost/performance will be lower. I'm a firm believer that they will perform better at CPU tasks compared to Intels options. And I'm certain that they will blow Intel out of the water when looking at GPU (compared to Intels iGPU)

 

[Falhófnir]

Expecting price points to be maintained, maybe (slim chance) you will get a bit more for your money (outside the extra performance/ battery life AS will bring) - e.g. MacBook Pro $1,299 with 16GB RAM standard.

The interesting one will be the 16" - if they delete the dGPU and save money on the CPU (and further simplify the system with less cooling pipes etc needed) that could be quite a substantial saving, maybe enough to get it back to $1,999 starting like it used to be without dedicated graphics? Probably more likely they will keep the budget and use any extra for more storage, RAM, profit etc as standard here as well though.

 

[leman]

The interesting one will be the 16" - if they delete the dGPU and save money on the CPU (and further simplify the system with less cooling pipes etc needed) that could be quite a substantial saving, maybe enough to get it back to $1,999 starting like it used to be without dedicated graphics? Probably more likely they will keep the budget and use any extra for more storage, RAM, profit etc as standard here as well though.

Even more: eliminating the dGPU as a physically and logically separate device will radically simplify the logic board design (no need for separate VRAM, no need for separate power regulators, no need for video output multiplexer etc.).

But even for the 13" model we should see Apple Silicon bringing some streamlining to the internal Mac design, e.g. SSD controller (and most likely Thunderbolt controllers) will be integrated on chip, power delivery will likely be simplified and optimized etc.

 

[theluggage]

I can't imagine that the entry level prices will go down (or its "Who are you and what have you done with the real Tim Cook?") - so ~$1000 for a "personal productivity" machine and $1800+ for something that can credibly carry the "Pro" label (...the current "2 port" MacBook Pros aren't really that, and should be easily outperformed and made obsolete by an ASi "Air"). They may well go up, although now is not a good time for price increases.

However, beyond that there's a lot of flexibility for completely changing the price/spec tiers and potentially offering more "bangs per buck". The current range is very much built around Intel's processor range (not so much the i5/7/9 stuff as the TDP/Watts ratings and iGPU options). For example (pure speculation) we could see an ASi MacBook "Air" (branding optional) range with higher-end options beating all the current Intel 13" MBPs, with the ASi 13" and 16" MacBook Pro packing a more powerful ASi variant - but without the current need for a bigger battery and cooling system.

Apple have been known to offer improved specs without a price bump - the 16" MBP was a significantly better deal than the 15", for example.

 

[bobnugget]

Exactly this -

Apple kept the last Al 'powerbook' body in order to prove/show the efficiency in Apple computer case design. Despite everyone's assumption that Apple was shot gun wedded to the power PC architecture they wanted to show how agile they can be

I fully expect a tweaked version of the 2016+ USB C chassis, showing how well their design can scale to different chipsets (even help get more from the A14 we all know and love with its pro laptop class heavy duty heat dissipation) ... designed to look similar as the previous generation but an obvious 'black sheep'

The 15" and 17" MacBook Pro's (2006-8) designs are actually very different to the 2003-2005 Powerbooks, although the machines look similar externally. The cases aren't particularly similar. Same goes with the MacBook vs iBook.
The intel iMac and Mac Mini are more like the previous PPC versions

Consider:

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Want more storage capacity? Replace your hard drive with a higher capacity unit.

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[johnhackworth]

I doubt Apple makes this transition to loose market share. So what are they going to offer to lure Windows users to transition? Because the offer to come over without necessarily leaving their software behind is now lost, and that is a big deal for that category - something that 20% higher performance with 30% longer battery life doesn’t change much, because the bulk of consumers and administrations are already served adequately by Windows systems.

I think that the ability to for Macs to boot into Windows is *much* less important than it was at the time of the Intel transition. Much of what people do on pcs is doable on web apps on *any* platform. Unless you're a gamer or have a niche software requirement it's unlikely that you'll miss Windows.

 

[Falhófnir]

Even more: eliminating the dGPU as a physically and logically separate device will radically simplify the logic board design (no need for separate VRAM, no need for separate power regulators, no need for video output multiplexer etc.).

But even for the 13" model we should see Apple Silicon bringing some streamlining to the internal Mac design, e.g. SSD controller (and most likely Thunderbolt controllers) will be integrated on chip, power delivery will likely be simplified and optimized etc.

Indeed, I can also envisage that the new 14" and the 16" will be closer in ability under Apple Silicon than was possible with Intel. A closed performance gap would make a smaller price gap logical too. If the 14" inherits the 28W Intel machine's $1,799 starting price (or thereabouts) $1,999 for the larger model with equivalent internals/performance seems about right.

Another thought, the savings on the MBA might also go towards putting the Touch Bar in, it should really be common to all models if they want developers to really start putting in the effort to make it the USP they envisioned.

 

[EntropyQ3]

I think that the ability to for Macs to boot into Windows is *much* less important than it was at the time of the Intel transition. Much of what people do on pcs is doable on web apps on *any* platform. Unless you're a gamer or have a niche software requirement it's unlikely that you'll miss Windows.

True, but that works both ways. Why pay for a Mac when you can get exactly the same experience running the same apps on just about anything? So if you’re an educational institution, a student or an administration - why pay more to run web apps?
Well, Macs are nicer.
So how much is "nicer" worth?

Cost matters. A lot. To organisations and individuals both. And Apple already has most of the customers who are affluent enough to pay a hefty price for "nicer" and don’t need Windows, so if AS Macs are even nicer, well that can’t really change sales much. If Apple wants to substantially increase sales they need lower cost options, (or even better, lower prices across the board.) Apple Silicon is an opportunity to adress that, if they so choose.

Apples announcement of their first AS Macs is arguably the most interesting thing to happen in personal computer space for a very long time and will receive a lot of media attention. Will they use that exposure to attract a wider audience?

 

[dmccloud]

I would say the majority of the cost of Macintosh still comes from the massive undertaking in case / SOC motherboard design , engineering and manufacturing , rather than the silicon sourced from an outside fabber

that won't change

Sadly then the price won't

but I have no doubt Apple will provide more value with the AS Macs for the same price in a variety of other ways

The Intel Core i7-1068NG7 used in the higher-end 13" MacBook Pro has a list price of $426 according to Intel's own tech specs. That means that almost 25% of the price of the $1799 MBP is tied into the processor itself. Given that the 12.9" and 11.9" iPad Pro use the same processor, we can safely assume that the A12 used in those models today does not make up that big of a percentage of the ASP, otherwise Apple would be losing money hand over fist for the newly updated iPad 10.2". Since Apple already spends its own money and resources developing processors for the iPhone and iPad, the additional costs of adding Mac development into the picture is actually negligible, especially using a modularized IP such as the ARM instruction set. Since it is impossible to figure out specific pricing on Apple's processors, I went to took a look at the pricing for Qualcomm's Snapdragon series, specifically the upcoming Snapdragon 875. The entire chipset (SoC) only costs $250 for that processor (which costs $130 on its own), whereas the 865 SoC it will be replacing only costs $160. In essence, you can buy one SD875 SoC and a SD875 by itself for less than you can buy one i7-1068NG7 on its own. With the Intel processor, that $426 only includes the processor, the chipsets needed to run that processor are an additional expense on top of that, which means an even larger percentage of the MacBook's price is going to Intel.

I have seen multiple reports over the last few days that seem to agree on a $799 MacBook Air and $1099 13" MacBook Pro coming next week. The rumors of a 16" Pro are all over the place, with some people silently changing their prediction to either completely omit the 16" or move it to an early 2021 release. Given the pricing of the current Intel processor compared to the Snapdragon 875 pricing, it is not unreasonable to conclude that Apple's SoC will also be less expensive. That would allow Apple to drop the prices of their products to remain competitive with Windows-based options while maintaining their operating margins.

Intel® Core™ i7-1068NG7 Processor (8M Cache, up to 4.10 GHz) Product Specifications

Intel® Core™ i7-1068NG7 Processor (8M Cache, up to 4.10 GHz) quick reference guide including specifications, features, pricing, compatibility, design documentation, ordering codes, spec codes and more.

ark.intel.com

Leaked Snapdragon 875 pricing implies next-gen flagships will be even more expensive

2020 flagships have been incredibly expensive, in part due to the high cost of the Snapdragon 865. It seems things aren't going to get any better either, as new information claims the Snapdragon 875 will be over 50% costlier than the already pricey Snapdragon 865.

www.notebookcheck.net

 

[bill-p]

This is on Intel's page:

Prices are for direct Intel customers, typically represent 1,000-unit purchase quantities, and are subject to change without notice. Prices may vary for other package types and shipment quantities. If sold in bulk, price represents individual unit. Listing of RCP does not constitute a formal pricing offer from Intel.

So the i7 1068NG7 may actually not be so expensive if Apple is ordering 500,000 units from Intel.

Also, I very sincerely doubt Apple will do a $799 MacBook Air 13". Heck, even at $999, it's already pushing it. Why?

Apple is still selling the 12.9" iPad Pro with 128GB storage for $999.

You're basically suggesting that Apple is going to sell a 13" MacBook Air with more storage, more RAM, faster processor, more ports, an actual keyboard, bigger battery, etc...

...for less.

That makes no sense.

So one of the elephants in the room right now is the iPad Pro. My question to all of you who think Apple is going to sell AS Macs for less is: why do you think Apple has to price the MacBook Air less than the iPad Pro? And does it even make sense for Apple to do that?

 

[jazz1]

This is on Intel's page:



So the i7 1068NG7 may actually not be so expensive if Apple is ordering 500,000 units from Intel.

Also, I very sincerely doubt Apple will do a $799 MacBook Air 13". Heck, even at $999, it's already pushing it. Why?

Apple is still selling the 12.9" iPad Pro with 128GB storage for $999.

You're basically suggesting that Apple is going to sell a 13" MacBook Air with more storage, more RAM, faster processor, more ports, an actual keyboard, bigger battery, etc...

...for less.

That makes no sense.

So one of the elephants in the room right now is the iPad Pro. My question to all of you who think Apple is going to sell AS Macs for less is: why do you think Apple has to price the MacBook Air less than the iPad Pro? And does it even make sense for Apple to do that?

I sadly agree. I don't think Apple believes in the Tooth Fairy

 

[jz0309]

I think pricing for AS MacBooks will stay as is.
As mentioned above, Apple will want to increase market share, they will not be able to do that by increasing prices, better performance and longer battery life are things that typical consumers will like, but not pay premium. Apple will go after that typical consumer.
As for the cost of the CPU, in the post above Intel lists $426, Apple's price for that same CPU will be significantly lower, probably in the 200-250 range. Also, keep in mind that Intel's gross margin has historically over the past 25 years been in the +/- 55% range, so the actual cost for Intel to manufacture that CPU is well below $100. The cost for Apple for a A14 chip manufactured will also be well below $100.
So, the overall cost for Apple for the entire BOM of an AS MacBook will be lower than the Intel equivalent.
Clearly, Apple could simply improve margins and make existing Mac users happy with AS, that will obviously improve their bottom line, BUT, it will not give them a noticeable uptick in Mac users overall and watching Apple under Tim Cook, that is what they are going to do, hence, pricing will stay the same and even has a potential be be lowered.
How about "We can deliver better performance, better battery life for less money - it's MAGIC"
Tuesday will be exciting ...

 

[dmccloud]

This is on Intel's page:



So the i7 1068NG7 may actually not be so expensive if Apple is ordering 500,000 units from Intel.

Also, I very sincerely doubt Apple will do a $799 MacBook Air 13". Heck, even at $999, it's already pushing it. Why?

Apple is still selling the 12.9" iPad Pro with 128GB storage for $999.

You're basically suggesting that Apple is going to sell a 13" MacBook Air with more storage, more RAM, faster processor, more ports, an actual keyboard, bigger battery, etc...

...for less.

That makes no sense.

So one of the elephants in the room right now is the iPad Pro. My question to all of you who think Apple is going to sell AS Macs for less is: why do you think Apple has to price the MacBook Air less than the iPad Pro? And does it even make sense for Apple to do that?

Apple isn't competing against the iPad Pro with the Mac, it's competing against Intel and PC manufacturers INCLUDING Microsoft and their Surface Pro lineup. There are many 13" laptops with comparable (and in many cases better) specs than the MBA, and they come in at a lower price. The HP Pavilion x360 running an 11th gen i5, 8GB RAM, and a 512GB SSD costs $799.99 at Best Buy. The Samsung Galaxy Flex Alpha (which runs a 10th gen i5, 8GB RAM and a 256GB SSD) sells for $849.99 normally, but is on sale for $699.99 right now.

With the Intel-based Macs, Apple could tout their integration of the OS and Hardware and the Apple ecosystem as differentiators to justify the higher prices. Now that Apple is switching to their own processors, many people are going to view them as inferior simply because they aren't Intel branded. If Apple maintains current pricing, the perception by and large will be that Apple is simply trying to increase its profit margins, since in their minds the new hardware clearly can't compete with Intel. The other part of the equation is that Apple is relying more and more on its services offerings with each passing year, which is why the company announced the Apple One service bundles. Compared to hardware sales, there is much more profit accrued through services, and that is where Apple's has increased their emphasis lately.

If you missed the Q4 2020 earnings report, Apple reported $14.55 billion in revenue from services compared to $9.03 billion from sales of the Mac (notebook, desktop, Pro included). The iPad was actually the area that produced the least revenue ($6.79 billion). If Apple was to drop the prices of the new Apple Silicon Macs while providing comparable performance to the current Intel models, they could draw more new customers, which would lead to a corresponding increase in services revenue. This would not only increase Apple's overall revenue going forward, but also their profits going forward.

 

[leman]

If you missed the Q4 2020 earnings report, Apple reported $14.55 billion in revenue from services compared to $9.03 billion from sales of the Mac (notebook, desktop, Pro included). The iPad was actually the area that produced the least revenue ($6.79 billion). If Apple was to drop the prices of the new Apple Silicon Macs while providing comparable performance to the current Intel models, they could draw more new customers, which would lead to a corresponding increase in services revenue. This would not only increase Apple's overall revenue going forward, but also their profits going forward.

Exactly! There is every reason for Apple to subsidize Macs. They don’t want to make them too cheap (they want to keep the perception of “premium” brand), but making them the same price as other “premium” brands while significantly try better in performance should drive platform adoption.

 

[EntropyQ3]

The Intel Core i7-1068NG7 used in the higher-end 13" MacBook Pro has a list price of $426 according to Intel's own tech specs. That means that almost 25% of the price of the $1799 MBP is tied into the processor itself. [/URL]

Not really. Given Apples margins, that would mean that the CPU constituted 40% or so of the actual Bill Of Materials. (Apple then adds margins to cover all other expenses and generate profit, and you end up at final price.)
Now, Apple may get somewhat better deals, but Intel is under the loupe - they cannot play favourites with their pricing as they wish.

By going to their own silicon solutions, Apple saves a lot in CPU and (GPU+memory) costs. Stack the benefits leman outlined above on top of that for even bigger savings.

There are design costs as well of course for the new AS, but so far the speculation is that Apple will largely scale the IP assets they already develop anyway for their phones. There is no doubt whatsoever that overall Apple BOM for their Macs will be lower. There is doubt however as to how Apple will leverage those savings. (And of course, we may still have to pay $200 for $40 worth of extra memory chips.)

 

[blindpcguy]

another factor i haven't seen posted above is the T2 chip will no longer need to be used. Since Apple Silicion will have all the features baked right in that takes another layer of complexity out of the equation

 

[MysticCow]

So the i7 1068NG7 may actually not be so expensive if Apple is ordering 500,000 units from Intel.

Also, I very sincerely doubt Apple will do a $799 MacBook Air 13". Heck, even at $999, it's already pushing it. Why?

Apple is still selling the 12.9" iPad Pro with 128GB storage for $999.

You're basically suggesting that Apple is going to sell a 13" MacBook Air with more storage, more RAM, faster processor, more ports, an actual keyboard, bigger battery, etc...

...for less.

That makes no sense.

So one of the elephants in the room right now is the iPad Pro. My question to all of you who think Apple is going to sell AS Macs for less is: why do you think Apple has to price the MacBook Air less than the iPad Pro? And does it even make sense for Apple to do that?

But releasing a MacBook Not Pro for MORE than an iPad Pro AND is intentionally hurt so that it can't perform as well as an iPad Pro is a recipe to just retire the Mac from Apple. It would be a pure, unmitigated disaster, heavy on the dis.

"Just buy an iPad" is THE ELEPHANT. There may be smaller elephants, but "Just buy an iPad" is THE BIG ONE. Apple has to give reasons to buy this laptop over "Just buy an iPad." Intentionally harming it to where it's either too expensive or intentionally hurt to not perform as well isn't the answer.

 

[jz0309]

Apple isn't competing against the iPad Pro with the Mac, it's competing against Intel and PC manufacturers INCLUDING Microsoft and their Surface Pro lineup. There are many 13" laptops with comparable (and in many cases better) specs than the MBA, and they come in at a lower price. The HP Pavilion x360 running an 11th gen i5, 8GB RAM, and a 512GB SSD costs $799.99 at Best Buy. The Samsung Galaxy Flex Alpha (which runs a 10th gen i5, 8GB RAM and a 256GB SSD) sells for $849.99 normally, but is on sale for $699.99 right now.

With the Intel-based Macs, Apple could tout their integration of the OS and Hardware and the Apple ecosystem as differentiators to justify the higher prices. Now that Apple is switching to their own processors, many people are going to view them as inferior simply because they aren't Intel branded. If Apple maintains current pricing, the perception by and large will be that Apple is simply trying to increase its profit margins, since in their minds the new hardware clearly can't compete with Intel. The other part of the equation is that Apple is relying more and more on its services offerings with each passing year, which is why the company announced the Apple One service bundles. Compared to hardware sales, there is much more profit accrued through services, and that is where Apple's has increased their emphasis lately.

If you missed the Q4 2020 earnings report, Apple reported $14.55 billion in revenue from services compared to $9.03 billion from sales of the Mac (notebook, desktop, Pro included). The iPad was actually the area that produced the least revenue ($6.79 billion). If Apple was to drop the prices of the new Apple Silicon Macs while providing comparable performance to the current Intel models, they could draw more new customers, which would lead to a corresponding increase in services revenue. This would not only increase Apple's overall revenue going forward, but also their profits going forward.

While I agree with everything and have made similar argument - what Apple just did with pricing of the MagSafe duo charger at $129 makes me wonder what is going on in their heads ... if they continue that strategy with AS MacBooks, they will lose market share which a 2T$ company cannot afford long term...

 

[TomOSeven]

Tim has been ALL ABOUT raising ASP and raising margins. I doubt they'll be cheaper than the current laptops.

Quote me next week, they'll be prized the same as intel for the old design and more expensive than intel if there's a redesign.

 

[jazz1]

I think pricing for AS MacBooks will stay as is.
As mentioned above, Apple will want to increase market share, they will not be able to do that by increasing prices, better performance and longer battery life are things that typical consumers will like, but not pay premium. Apple will go after that typical consumer.
As for the cost of the CPU, in the post above Intel lists $426, Apple's price for that same CPU will be significantly lower, probably in the 200-250 range. Also, keep in mind that Intel's gross margin has historically over the past 25 years been in the +/- 55% range, so the actual cost for Intel to manufacture that CPU is well below $100. The cost for Apple for a A14 chip manufactured will also be well below $100.
So, the overall cost for Apple for the entire BOM of an AS MacBook will be lower than the Intel equivalent.
Clearly, Apple could simply improve margins and make existing Mac users happy with AS, that will obviously improve their bottom line, BUT, it will not give them a noticeable uptick in Mac users overall and watching Apple under Tim Cook, that is what they are going to do, hence, pricing will stay the same and even has a potential be be lowered.
How about "We can deliver better performance, better battery life for less money - it's MAGIC"
Tuesday will be exciting ...

Don’t bet me wrong. I’ll be buying an ARM laptop, and then eventually an ARM MacMini. My guess is the lowest tier of each device might beat the lowest end prices of the current Intels. But, pumping up RAM, CPU, or SSD will quickly negate the ”low, low” entry level price of the ARMs. Yes, yes, it has always been that way, but I think upgrades will come at an even higher premium. Apple is not going to leave cash on the table. And I guess I’ll be tossing the cash on the table

 

[thenewperson]

While I agree with everything and have made similar argument - what Apple just did with pricing of the MagSafe duo charger at $129 makes me wonder what is going on in their heads ... if they continue that strategy with AS MacBooks, they will lose market share which a 2T$ company cannot afford long term...

lol, have you somehow missed (almost) all of Apple's accessory pricing? They're dumb as hell and have no bearing on what the major products cost.

 

[Anarchy99]

I imagine they will cost less than the Intel counterparts and they’ll be priced similarly so Apple can have even better margins.

Short term I will probably buy whatever their Mac mini so I can stay relevant, at the same point that I’m going to need to make hackintosh‘s be my main business machine again
At least until intel macs are completely deprecated.
at which point I’m hoping, X86 emulation on ARM/AS makes it worthwhile for me to drop Big $ on a high-end Mac Pro.
or already decent arm emulators for x86 allow me to run Apple Silicon macOS at which point I imagine I’ll diverge further down the hackintosh rabbit hole.