an apple killed the basic Mac Mini, is raising the entry price of its cheapest desktop from $599 to $799. Can it pull off the same with its cheapest laptop?
In his Culpium newsletter, Tim Culpan reports that Apple is preparing a new production of MacBook Neoincreasing the number of units to 10 million from its initial estimate of between 5 and 6 million. After ending its supply of A18 Pro processors remaining in the iPhone 16 ProApple will need to make a new batch of A18 Pro chips for these new Neos.
The cost of producing new chips instead of simply tapping into an existing supply of “integrated” components will cut into Neo’s profits. Faced with tight margins, Apple could stop selling the $599 model, Culpan said, and position the $699 MacBook Neo as an entry point.
Neo recap
Let’s back up and review the situation Apple finds itself in with the MacBook Neo.
The MacBook Neo is released in March and is an instant hit. “We were very excited about the product before announcing it, but we underestimated the level of enthusiasm it would have,” CEO Tim Cook said last week on Apple’s Q2 earnings call.
With the Neo flying off store shelves, Apple is racing to supply Neos faster than expected. Since next year’s update is far from meeting Neo’s demand, we need to do more with the current model. And this requires Apple to spend money to make millions of chips for the A18 Pro, a cost it didn’t incur in the initial Neos offering.
The MacBook Neo is based on a stripped down version of Apple’s A18 Pro processor from the iPhone 16 Pro.
At the heart of the MacBook Neo are stripped down versions of the A18 Pro chip that Apple made for the iPhone 16 Pro. These bound chips have a small manufacturing defect in one of their six integrated graphics cores and were not 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 the increased production costs of this second run of Neos, Apple may not like the figures it sees for the first $599 model that students can get for $499 with Apple’s education discount — especially when you factor in the rising cost of memory and storage.
Goodbye $599 Neo?
One possible move from Apple, which it has already made with the Mac Mini, is to get rid of the low-cost 256GB model with very low margins. Such a move with the Neo would leave the $699 model with a 512GB SSD and Touch ID as the only option (unless Apple, say, adds a 1TB model on top of it).
And before you start thinking about waiting for the MacBook Neo with the new A18 Pro chip that might give a small bump in graphics performance, Apple probably won’t offer six active GPUs. To keep things balanced, Apple will likely switch off one of the GPUs so that the Neo purchased today or later this year will have the same 6-core CPU and 5-core GPU.
From top to bottom, the MacBook Neo currently comes in green, silver, indigo or orange. Can Apple add new colors?
One thing you might be willing to wait for: new colors. Culpan thinks that Apple may introduce new color options for the Neo in an effort to ease any ill feelings about it raising the cost of the Neo’s entry.
I’m already on record as saying that readers should look at Apple’s $100 discount as a free Touch ID upgrade and double the storage, so I wouldn’t be sad to see the end of the $599 Neo with its minimal storage and no Touch ID. But I’m sure there are many students and teachers who would lament its death, new colors or not.