I've been listening to the rumors swirling hot and heavy over the last week regarding a potentially new MacBook Air with drastic design changes. I'll let the tech geeks expound on whether or not the changes are a step forward for mobility users, but from a financial perspective almost every single rumored change would make this a less expensive unit to build.
1. Replace two models, a 13" and an 11" with a single 12" model. This is huge and the benefits go in two different directions. One, you get increased purchasing power by consolidating your volume into one model. Apple should be able to negotiate lower prices for those components like the chassis that used to be split into two different sizes. And two, the depreciation charges for machinery and tooling will be less for one model and spread over more volume.
2. Only one USB port. I did financial analysis for Gateway's return center in Sioux Falls, SD and I remember that one of the biggest causes for laptops to be returned for warranty repair was broken ports. Customers constantly break them. Cords get yanked at an angle, someone walking by snags the cord, or they're full of sand. Only one port port on a MacBook will yield reduced warranty costs. My thinking is that without the cost of the extra 2, 3 or 4 ports, Apple can design a single port that is more durable. It may be more expensive at the unit level, but less than paying for 2-4 cheaper ports.
3. No Cooling Fan - This reduces the complexity of manufacturing and therefore the cost. No longer does the manufacturing plant have to purchase, store, and assemble the cooling fan.
The one change that may trigger an increase in cost is the change to a retina screen. But the cost savings from everything else should more than offset that increase. And the retina screen would give marketing something new to focus on as opposed to taking things away.
In fact, if the rumors are true, this is exactly the laptop that I'd advise Apple to build if they asked for financial advice on improving the 2015 MacBook Air Income Statement. Costs could come down $200 per unit and Apple could split that with the customer cutting another $100 off the price simultaneously goosing volume.
Increasing volume and cutting costs at the same time, nice.
1. Replace two models, a 13" and an 11" with a single 12" model. This is huge and the benefits go in two different directions. One, you get increased purchasing power by consolidating your volume into one model. Apple should be able to negotiate lower prices for those components like the chassis that used to be split into two different sizes. And two, the depreciation charges for machinery and tooling will be less for one model and spread over more volume.
2. Only one USB port. I did financial analysis for Gateway's return center in Sioux Falls, SD and I remember that one of the biggest causes for laptops to be returned for warranty repair was broken ports. Customers constantly break them. Cords get yanked at an angle, someone walking by snags the cord, or they're full of sand. Only one port port on a MacBook will yield reduced warranty costs. My thinking is that without the cost of the extra 2, 3 or 4 ports, Apple can design a single port that is more durable. It may be more expensive at the unit level, but less than paying for 2-4 cheaper ports.
3. No Cooling Fan - This reduces the complexity of manufacturing and therefore the cost. No longer does the manufacturing plant have to purchase, store, and assemble the cooling fan.
The one change that may trigger an increase in cost is the change to a retina screen. But the cost savings from everything else should more than offset that increase. And the retina screen would give marketing something new to focus on as opposed to taking things away.
In fact, if the rumors are true, this is exactly the laptop that I'd advise Apple to build if they asked for financial advice on improving the 2015 MacBook Air Income Statement. Costs could come down $200 per unit and Apple could split that with the customer cutting another $100 off the price simultaneously goosing volume.
Increasing volume and cutting costs at the same time, nice.
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