Monday, May 7, 2012

How Much MacBook Air Can You Get for $800?

How Much MacBook Air Can You Get for $800?:

The MacBook Air currently costs $1,000 for the baseline model. Photo: Jim Merithew/Wired
In order to compete with PC manufacturers selling inexpensive Windows ultrabooks this year, Apple is primed to release a lower-priced, $800 MacBook Air in Q3 — or so say “upstream supply chain” sources at DigiTimes.
The MacBook Air is currently priced at $1,000 for the baseline 11-inch model. Incoming ultrabooks, meanwhile, cost as little as $700, and include sleek aesthetics and innovative feature sets that compete directly with Apple’s Air lineup.
“I think what’s going on here is Apple is recognizing that more of the market is moving to thinner, sleeker designs that they pioneered with the Macbook Air,” NPD DisplaySearch analyst Richard Shim told Wired.
But does it make sense for Apple to sell a cheap MacBook Air? Yes, it does — but don’t expect an entirely redesigned computer. As Apple rolls out new models in a product line, it often marks down the prices of legacy models.
“We’ve seen this pattern going back to the iPods,” IHS iSuppli analyst Kevin Keller told Wired.
So simple price drops are nothing new. In fact, Apple just ran this exercise with the iPad 2: When the new iPad came out, Apple reduced the price of the iPad 2 by $100, making its previous flagship tablet a lower-tiered (but still quite able) bargain.
It’s a winning strategy. Apple doesn’t expressly create “budget” products. Instead, it just lets new tech eclipse old tech, and pushes older products into the Apple equivalent of a bargain bin. And because the company masters its supply chain so well, it can manufacture these older products for lower and lower prices as the months go by — thus maintaining nice profit margins when selling a device for $100 less.
This is a different strategy from most of Apple’s competitors, which deliberately build “budget” products to hit lower price points.
Keller said that MacBook Air components like memory and the display may have cost $100 and $60 respectively in 2011 when the computer first shipped. But one year later, prices have eroded and the memory might cost between $60 and $70, and the display around $40.
“Since the introduction of existing models, Apple’s margins have been steadily going up because their costs have been going down over all this time,” Keller said. Thus, Apple now has room to drop the price tag without needing to reduce any features or functionality.
It’s not clear exactly what sort of margins Apple’s actually seeing. But, for perspective, Keller said that when the 13-inch MacBook Air debuted, its bill of materials totaled around $700, while the product sold for $1,200.
Although one can never handicap an Apple rumor with absolute certainty, the prospect of an $800 MacBook Air seems entirely likely. So if you’ve been flip-flopping between ponying up for an Air, or going with a cheaper ultrabook, you may want to hold out for a few more months and see how things play out.

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