A Low-Cost MacBook Air Could Be a Big Seller for Apple

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Last week, Ming-Chi Kuo of KGI Securities predicted that Apple will release a new 13″ MacBook Air with a lower price tag sometime in the second quarter. I find it interesting that a device many of us thought had been left for dead in the wake of the super-thin MacBook a couple of years ago still proves its worth in their product lineup. That is some remarkable resiliency, especially in the fast-moving tech world.

At one time it was the latest and greatest. The MacBook Air was the super-thin, super-light premium laptop that all comers were judged by. Now, it seems that it will be further confirmed in its role as the low-end value option in Apple’s laptop lineup. However, with the right combination of upgrades and concessions, it could still have one more good run before finally heading off into the sunset.

Let the iPad be your guide

A year ago, Apple did something different. They took the iPad Air 2, which was too close to the iPad Pro in both features and price, and kicked it to the curb. They made some easy upgrades to the internals, made some concessions on size, shape, and screen technology, and ended up with the perfect new device to breathe life into slumping iPad sales.

The Fifth Generation iPad was larger and heavier, taking on the same design as the older iPad Air. It didn’t have an amazing screen, either. Despite this, it was still thinner and lighter than any 9.7″ iPad before the Air. It also had better internal specs than anything short of an iPad Pro. The end result was a device that was an upgrade for most existing iPad owners. The iPad’s lower $349 starting price was the perfect motivation for users hanging onto older iPad hardware to finally take the plunge and upgrade.

A proven formula

When you have a proven formula, you stick with it. You could definitely say that the MacBook Air is as proven as it gets in the tech world. As for making changes to it, considering how fresh the success of the iPad is, I can’t imagine that Apple will deviate form that proven formula, either. The only thing in question is going to be how far Apple will go in changing the existing version. Will they simply slash the price and call it a day? Considering all of the company’s expertise in manufacturing this design, they can afford to squeeze the price downward without affecting the bottom line one bit. In fact, an increase in volume due to a price drop should easily offset any price reduction. This would certainly be the easiest play for Apple.

On the other hand, the MacBook Air is already quite dated in terms of both looks and specs. The 2010 design shows its age up against both Apple’s own MacBook and MacBook Pro, and all of the recent premium Windows ultrabook crowd. It’s still a decent machine, but it lacks modern amenities such as a recent Intel processor architecture, a high resolution screen, or a USB-C port. While Apple did give it a modest processor speed bump in 2017, this machine could definitely use a little of the same TLC that the iPad got.

The MackBook Air’s fifth generation Intel chips are now three full generations behind, so a modest bump up in class shouldn’t be a price problem. Likewise, swapping out either one USB-A port or the out of date Thunderbolt 2 port for USB-C shouldn’t move the needle much, if at all. While the iPad formula tells us that a few spec bumps are to be expected, changing the device’s frame to slim down the bezels or adding a higher resolution screen probably aren’t in the cards.

Price is the deciding factor

If we were talking about a new MacBook Air design at the same starting price of $999, then I would expect the dated design and the screen resolution to be addressed. However, if we are getting one at a lower price, then some concessions have to be made. Apple may be looking to get the price down, but anyone who follows the company knows that they don’t play around when it comes to profit margins on hardware.

Remember, in the case of the iPad, that meant going backwards to the old iPad Air case and losing the laminated screen from the Air 2. These both helped to lower the Bill of Material, and add some separation between the new model and the iPad Pros. Being that the MacBook Air’s 2010 design is already dated and set apart from Apple’s newer laptop hardware, that isn’t an issue here. However, price will likely prevent Apple from making any physical improvements.

Targeting the market

The key to the success of the Fifth Generation iPad was that it was perfectly targeted to the market Apple needed to address. They had much longer iPad upgrade cycles than they anticipated, and price was obviously playing a large role in that. The feature additions of the iPad Air and iPad Air 2 hadn’t been enough to spur mass upgrades. Even the larger iPad Pro, which was really aimed at a different audience, couldn’t draw in large numbers. Apple made the right changes with the iPad, and hit the sweet spot to get many of these existing owners who waited three to six years to finally pull the trigger on an upgrade. They also brought in some new users, as well.

The situation is no different with the MacBook Air. Lowering the entry price from $999 by between $100 and $200 should definitely spur sales. Considering that Apple’s laptop sales have already been good over the last year, this move can only help. First off, it should bring in some new users who would have gone with a Windows laptop, but see the MacBook Air as inexpensive enough to get them over to macOS. It should also spur a few upgrades among users who are fans of the Air and want to stick with it over the MacBook and its lower-power processor.

Lowering the price of the MacBook Air will also give Apple’s laptop lineup a little more definition. Apple can leave the larger gap in price between the MacBook Air and MacBook to further separate them and their purposes. Lowering the Air by $200 would give Apple the opportunity to also slide the entry-level MacBook down slightly in price, as well. Either way, as with the iPad line right now, there will be a very clear delineation between all of their products.

Conclusion

It’s hard to say that anything with the MacBook Air is big news, at this point in its long and illustrious career. However, Apple altering existing devices in an attempt to lower prices is still a fairly new thing for them. Considering how well it worked recently, I don’t think this is the last time we will see such a move, either. I know that it’s a good thing for consumers, and it shows that Apple isn’t just focused on high-end of the laptop and tablet markets anymore. While they aren’t ever going to produce a modern equivalent of the netbook, I am happy to hear that they may still be casting their nets a bit wider these days and opening up to a little wider audience.

Who knows, maybe if the Air hits $799 I’ll take the plunge myself and own a macOS computer for the first time. We shall see. What do you think of a lower cost MacBook Air? Have you moved on, or is just the sort of macOS machine you have been waiting for? Let me know in the Comments section below, on Flipboard, on our Facebook page, or on Twitter @iPadInsightBlog.


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