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Apples Mac margins are in the 15-30% range. They will price to maintain those margins, so if they can build a viable $800 MacBook at those margins they will tak

Apples Mac margins are in the 15-30% range. They will price to maintain those margins, so if they can build a viable $800 MacBook at those margins they will take the additional market share. The iPad Air was a $500+ tablet until they were able to build a $299 model at same margins.

GekkePrutser 6y ago
But 15-30% is huge in the computer market. 10% is normal to consumers and much less to enterprise customers that demand deep discounts. I doubt they'd keep the same margin if they really offer it at $800. I don't think they'd save that much by cutting intel out, especially if you factor in R&D. Pretty sure they're cutting into their margins at that price, but it would be good for them to get ARM in the hands of consumers so that developers have a reason to work on it.
- valuearb 6y ago
  It’s huger than you think, the rest of the PC makers are stuck between 1-4% net profit margins. But their pricing isn’t going to be greatly influenced by R&D costs, it’s going to be driven by hardware costs. Those R&D costs are ongoing expenses, Apple is always working on new technologies. A rough rule of thumb is retail is twice hardware costs. Most Intel CPUs cost between $200 and $300 each, while Ax processors in iPads and iPhones cost less than $100 each. And another big factor is the SOCs for Apple Silicon will integrate lots of capabilities that require separate cards or coprocessors on current Macs, including high performance GPUs, the T2 security chip, etc. So it’s reasonable to think Apple will be saving $100 to $200 in hardware costs for the Apple Silicon “equivalents” of their current lineup (Equivalents in positioning, but faster, slimmer and longer battery life versions). That directly translates $200-$400 lower retail prices, which Apple will use to drive higher sales volumes. That will spread R&D, Design, Marketing, Sales, Admin, and Support over more units, supporting spending more to promote and sell them and more on design and R&D in the future.

GekkePrutser 6y ago

But 15-30% is huge in the computer market. 10% is normal to consumers and much less to enterprise customers that demand deep discounts. I doubt they'd keep the same margin if they really offer it at $800. I don't think they'd save that much by cutting intel out, especially if you factor in R&D. Pretty sure they're cutting into their margins at that price, but it would be good for them to get ARM in the hands of consumers so that developers have a reason to work on it.

valuearb 6y ago
It’s huger than you think, the rest of the PC makers are stuck between 1-4% net profit margins. But their pricing isn’t going to be greatly influenced by R&D costs, it’s going to be driven by hardware costs. Those R&D costs are ongoing expenses, Apple is always working on new technologies. A rough rule of thumb is retail is twice hardware costs. Most Intel CPUs cost between $200 and $300 each, while Ax processors in iPads and iPhones cost less than $100 each. And another big factor is the SOCs for Apple Silicon will integrate lots of capabilities that require separate cards or coprocessors on current Macs, including high performance GPUs, the T2 security chip, etc. So it’s reasonable to think Apple will be saving $100 to $200 in hardware costs for the Apple Silicon “equivalents” of their current lineup (Equivalents in positioning, but faster, slimmer and longer battery life versions). That directly translates $200-$400 lower retail prices, which Apple will use to drive higher sales volumes. That will spread R&D, Design, Marketing, Sales, Admin, and Support over more units, supporting spending more to promote and sell them and more on design and R&D in the future.