Must Read: No niche for iPad: Why I returned mine

Topic: Software

$799 MacBook Air: It's that Apple supply chain again

Summary: In the end, Apple's MacBook Air pricing has everything to do with its supply chain.

Larry Dignan

By for Between the Lines |

Apple is rumored to have a $799 MacBook Air in the works and you can thank the company's supply chain clout should that price come to pass.

According to DigiTimes, Apple is eyeing a $799 MacBook Air in the third quarter. DigiTimes, which has a so-so track record, cites sources in the "upstream supply chain."

DigiTimes noted that Apple's move would be designed to close any ultrabook encroachment.

However, it's more likely that Apple would lower MacBook Air prices because it can at a nice profit margin. Prices of ultrabooks haven't come down fast enough. The Windows 8 launch may change that equation.

In the end, Apple's pricing has everything to do with its supply chain. MacBook Air rides with solid-state storage and Apple has those supplies locked up. After all, the iPad, iPhone and iPod Touch use a lot of Flash supply. Meanwhile, Apple can call its shots with screens too.

It's quite possible that Apple is just passing along some of its savings on the MacBook Air bill of materials. In any case, a less expensive MacBook Air is going to squeeze the ultrabook market.

Related:

Topics: Software, Apple, Enterprise Software, Hardware, Laptops, Mobility

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

41 comments
Log in or register to join the discussion

  • Wow!!

    Yes lets thanks Apple's supply chain, I mean it has nothing to do with competition from Ultrabooks. Also This is a rumor, if it does not come true does that mean it is because of their supply chain it did not happen? Apple sells a lot fo products, but so Does HP and Dell, and IBM. Wow what a terrible article.
    schultzycom
    Reply Vote

    • I agree. So they take less of a profit to move more, as ultrabooks

      look to be selling better then even Dell expected. Something like that isn't missed by a company like Apple, who had this option in the wings months ago, as fall back.

      Funny how Larry will use "competition" as the reasons companies lower prices, except when it's Apple, then it's because of it's "supply chain".

      If he gave it some thought he would have realized that if Apple kept the price the same, while lowering supply chain costs, Apple would have [b]increased[/b] their profits, not kept it the same, or lowered it.
      William Farrel
      Reply Vote

      • There is none.

        "Funny how Larry will use "competition" as the reasons companies lower prices, except when it's Apple, then it's because of it's "supply chain"."

        True, they will lower for competition WHEN THEY CAN.

        Fact was, when the Air relaunched at $999, it was because THEY COULD. Neither Dell nor ANY other manufacturer has been able to sell an ultra book at that price, but Apple softened the ground with components.

        In time, as always, component costs drop. Apple will lower their price because they CAN now, AND because they will retain their margin while others will be able to get closer to the pricing.
        lelandhendrix@...
        Reply Vote

      • Why would they start now?

        @lelandhendrix:

        [i]In time, as always, component costs drop. Apple will lower their price because they CAN now, AND because they will retain their margin while others will be able to get closer to the pricing.[/i]

        This would be the exception for Apple as they tend not to lower prices at all.
        ye
        Reply Vote

    • It's The Case...

      The one big cost differentiator for Apple products is the packaging. Most all Apple products, including their MacBook Air, are packaged in MACHINED Aluminum cases. Machining gives Apple products exceptional strength and lightness, as well as a premium fit and finish. But machining is a very expensive process...

      If Apple moves successfully to some process (the LiquidMetal roomers come to mind) that allows them to retain the strength, lightness and finish of their machined case products, but at a cost more like that for plastic molding, they could cut a lot from their BOM for the MacBook Air. I think that is where this story is...

      Yes, this is about competition. And somebody is going to get hurt.
      z2217
      Reply Vote

  • If this this true, Apple is running scared

    This has nothing to do with supply chain and everthing to do with ultrabooks and the impending release of windows 8. Otherwise why wouldn't Apple just continue its business as usual and suck its lemmings pockets dry.

    Larry D. you should take a shower after writing this one. You have Apples poo all over you.
    oraman
    Reply Vote

  • Race to the bottom

    I agree, Apple is running scared. If sales were great and the competition so poor, there would be no need to lower prices. Clearly, Apple is unhappy with MBA sales so far or there would be no reason to start this race to the bottom.
    toddbottom3
    Reply Vote

    • Haha! Good One!

      If PC makers lower their price it is a race to the bottom but if Apple does it is because of their Supply Chain!
      slickjim
      Reply Vote

  • yeah, ipad with a keyboard...

    A $799 hardware from apple will be useless in terms of specs.
    owllnet
    Reply Vote

    • Need to Know Basis

      [ul][i]A $799 hardware from apple will be useless in terms of specs. [/i][/ul]Oh good. I've been looking for a guy who knows the future before it happens. What's your pick in the Belmont? Will 'Have Another' win the triple crown?
      Robert Hahn
      Reply Vote

      • I only need to know 1 thing about the MBA

        Will I be able to play my DVD movies in it without having to purchase anything else?

        If not, then judging by the wailing and moaning over on the Windows 8 blog today, the MBA is going to be a major fail.
        toddbottom3
        Reply Vote

      • Todd, your quest for knowledge is at an end

        @toddbottom3 The MBA doesn't come with an optical drive at all. So no, it can't play your DVDs without further purchases.
        vulcan666
        Reply Vote

  • I'm not sure it has anything to do with "supply chain"

    it has to do with their dealings with one company now: Foxconn. Apple isn't the multi-sourcing company they were 10 years ago when they were building systems in the US. Instead, they get Foxconn to do the grunt work.
    Joe_Raby
    Reply Vote

    • Uh...

      FoxConn IS supply chain
      lelandhendrix@...
      Reply Vote

  • Major Assumption Here

    This entire column and all the comments so far are based on the very dubious assumption that the DigiTimes report is accurate. They do not have a very good track record with these things. This report should be taken with a grain of salt.
    lumpy_blumpkin
    Reply Vote

  • Apple's "supply chain"

    I'm surprised no one else mentioned that Apple's "supply chain" is lots of minimally-paid Chinese laborers working long hours under often horrendous conditions. Apple is coming under pressure for the conditions in the third-party-controlled factories that make this stuff, supporting Apple's high profit margins at relatively low prices. Apple's contract clout causes the competitive environment that results in these conditions, but there's increasing human rights pressure working against this. IMHO we shouldn't be too happy about saving a few measly bucks under these circumstances.
    jirving@...
    Reply Vote

    • Maybe they don't mention it because it isn't true

      The supply chain are the folks supply the parts Apple ships to Foxconn for the highly paid Chinese workers to assemble (hint: you compare wages paid in a country with the average wages for THAT country; not your idea of utopia). So Apple's supply chain involves Ireland, the U.S., Singapore, Taiwan, etc.
      baggins_z
      Reply Vote

      • Wow

        "hint: you compare wages paid in a country with the average wages for THAT country; not your idea of utopia"

        That is as wrong as you get ... you compare it to the cost of living. And please note that most of these factories increase productivity by physically keeping employees within reach (basically modern indentured slavery). The pay they do get is then given to their families who in the end struggle to survive as many times it barely or doesn't meet the cost of living.

        I never thought I would see someone use the "they're use to it over there" argument online ...
        lkm32
        Reply Vote

      • @ikm

        A distinction without a difference. By either metric Foxconn workers are some of the highest paid employees in China.

        I'll lay money right now you're one of these folks who constantly criticize people for viewing the world through an American lens.
        baggins_z
        Reply Vote

    • Yes, and

      Apple has almost twice the margin in their products then most of their competitors.
      They make "nothing" themselves and are in all intents and purposes a marketing company.
      They prey on the market, with the help of a mindless media, with over hyped and overpriced products.
      sickntired44
      Reply Vote
CNET Join | Log In | Privacy | Cookies Close