Ming-Chi Kuo of KGI Securities came out with an investor note predicting that Apple would update the MacBook Air in the April to June timeframe. This would be quite the unexpected move if it happens.
It seemed like the 12” MacBook was the perfect successor to the MacBook Air. It split the size difference between the two MacBook Air models and had the retina screen that Air lovers all clamored for. It also beat the 13” Air at it’s own game by being both smaller and lighter. So what happened?
If Apple does update the Air, I’m guessing Apple is changing their game plan to deal with unforeseen developments. Here is one big thing that had to happen in order for the 12” MacBook to kill off the 13” MacBook Air. Profit margins had to improve on the 12” MacBook which would allow Apple to lower the price. Which in turn would generate more volume. Eventually the 12” MacBook would have been the $999 value leader. If Apple’s plan to replace the Air was derailed there could be two potential reasons.
First, the cornerstone of any profit improvement plan would be steadily increasing unit sales. This would allow for the reduction in fixed overhead costs per unit and reduced material costs via better pricing. But what if the public remains lukewarm to the MacBook? What if Mac users weren’t ready for a small laptop with only one port? I wrote last year that the 12” MacBook was the worst of both worlds when you compare tablets to laptops. I suspect many others agreed with me.
Second, unexpected support issues can break a product line. One of the keys to making the 12” MacBook so slim was redesigning the keyboard. However, this new design seems to be so finicky that even small pieces of dust can render a key inoperable. It also sounds like repairing this flaw is extremely costly to Apple. If the MacBook keyboard has a fatal flaw that is ridiculously expensive to repair, Apple may not want this model to ever reach mass acceptance. That could lead to service costs exploding in the future. And remember, service and support issues don’t show up in gross margin. They are down below in selling expenses.
I’m still convinced that Apple intended for the MacBook to replace the MacBook Air within 2 to 3 years. But business plans are like game plans. Sometimes the events on the field force you to improvise. Luckily, the MacBook Air still has a strong enough user base that it can help minimize any damage until Apple can redesign the MacBook or increase iPad Pro versatility.
Now available in iBooks —> The Tesla Bubble
If Apple does update the Air, I’m guessing Apple is changing their game plan to deal with unforeseen developments. Here is one big thing that had to happen in order for the 12” MacBook to kill off the 13” MacBook Air. Profit margins had to improve on the 12” MacBook which would allow Apple to lower the price. Which in turn would generate more volume. Eventually the 12” MacBook would have been the $999 value leader. If Apple’s plan to replace the Air was derailed there could be two potential reasons.
First, the cornerstone of any profit improvement plan would be steadily increasing unit sales. This would allow for the reduction in fixed overhead costs per unit and reduced material costs via better pricing. But what if the public remains lukewarm to the MacBook? What if Mac users weren’t ready for a small laptop with only one port? I wrote last year that the 12” MacBook was the worst of both worlds when you compare tablets to laptops. I suspect many others agreed with me.
Second, unexpected support issues can break a product line. One of the keys to making the 12” MacBook so slim was redesigning the keyboard. However, this new design seems to be so finicky that even small pieces of dust can render a key inoperable. It also sounds like repairing this flaw is extremely costly to Apple. If the MacBook keyboard has a fatal flaw that is ridiculously expensive to repair, Apple may not want this model to ever reach mass acceptance. That could lead to service costs exploding in the future. And remember, service and support issues don’t show up in gross margin. They are down below in selling expenses.
I’m still convinced that Apple intended for the MacBook to replace the MacBook Air within 2 to 3 years. But business plans are like game plans. Sometimes the events on the field force you to improvise. Luckily, the MacBook Air still has a strong enough user base that it can help minimize any damage until Apple can redesign the MacBook or increase iPad Pro versatility.
Now available in iBooks —> The Tesla Bubble
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