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Summary:

An Apple computer starting at $799 would be a big deal, but it’s unlikely. And the idea that Apple would be “forced to” lower the price due to competition from Intel-based ultrabooks makes very little sense. Here’s why.

macbook-air-feature

With the next iPad model at least a year away and the next iPhone a few months off, the Apple rumor mill is pondering a new Apple product line: the MacBook Air. On Monday, Digitimes reports that Apple is considering selling a MacBook Air for $799, which would be $200 cheaper than the least expensive model available now.

Predictably, many are running with this. An Apple computer starting at $799 would be a big deal — the cheapest traditional laptop the company has ever made. The Digitimes report had few details, but the theme that’s emerging in the flash analysis around the idea of a $799 Air is that Apple wouldn’t do it by choice, but would be “forced to” out of some sort of response to the threat of Intel-based ultrabook notebooks — which, mind you, are direct rip-offs of the Air.

It’s not impossible Apple would make a $799 Air. They could, but if they do, it wouldn’t be for the reasons many think.

Apple is not scared of ultrabooks. Intel’s thin-and-light, optical drive-less laptop concept with a solid-state drive and all-day battery life isn’t a monolith. As Dan Ackerman wrote for CNET in March, the term “ultrabook” has been clouded as a marketing term thanks to its overuse by mainstream laptop makers, and there’s not even an accepted definition anymore — it’s essentially the catch-all term for new mid-priced laptops. Apple has never been worried about competing with mid-priced laptops from HP, Dell, Acer or Samsung.

Today, you can buy an “ultrabook” that’s thicker than an inch, is heavier than 4 pounds, has a 14-inch screen, a traditional spinning hard drive, and decent battery life. They’re also priced between $700 and $900, or slightly below the $999 entry level 11.6-inch MacBook Air. In other words — nothing has changed. PC makers have been making laptops for years that could beat Apple on specs and often price and still Apple has done its own thing and continued to rake in profits.

Ultrabooks aren’t actually selling very well. It’s old news that Intel’s $300 million initiative intended to jumpstart this category is having a rough go of it. Holiday sales of the devices were described as “ugly.” And why not, when some consumers are putting off new computer purchases as they migrate some computing experiences to mobile devices such as iPhone and iPads?

People are already buying the $999 Air. The Air is doing fine on its own after beginning life in 2008 as a niche concept and very expensive design. Once Apple redesigned it and lowered the price two years later, it’s apparently done decent business for the company. Apple has never said how many Airs it typically sells each quarter, though analysts pegged the Air as responsible for a little more than a quarter of MacBook sales back in October. It’s also the company’s entry-level computer, so it’s not unreasonable that the cheapest computer would also be one of its best-selling computers.

Apple doesn’t typically do price cuts as a response to competitors. The idea that Intel aiming for $699 ultrabooks would suddenly “force” Apple to move down in price on its successful MacBook Air doesn’t match up with Apple’s practices. Apple has indeed lowered pricing on its most successful products over the last few years. But the way in which it’s cut prices isn’t with a new model — it’s been by lowering the price of older devices.

Apple’s most important product, the iPhone, has remained priced between $199 and $399 (with two-year wireless contract) since 2008 for new models. In 2009 Apple first discounted its popular device for older models. While simultaneously introducing the typically priced new iPhone 3GS, it kept the older model iPhone 3G for sale for the discounted price of $99. The same happened with the introduction of a new phone in 2010 — the 3GS stayed around for $99 — and in 2011, the two-year old iPhone 3GS became free with contract, while the iPhone 4 went down to $99. It has followed a similar pattern with the iPad — with the introduction of the third-generation iPad in January, Apple began offering the year-old iPad 2 for $399 instead of the normal $499 entry price.

So if Apple does decide to price a MacBook Air at $799, it likely won’t be to replace the $999 11.6-inch model that’s selling just fine, but perhaps as last year’s model simply discounted. But in general, this is a Digitimes report we’re talking about — I wouldn’t hold your breath for a cheaper MacBook.

Note: This was updated to clarify that a $799 MacBook Air would be Apple’s cheapest laptop ever, not cheapest computer, and that the first iPhone discount was in 2009.

  1. I would trust this analysis more if it wasn’t filled with factual errors. A $799 MacBook Air would not be the cheapest traditional computer Apple has ever sold – that would be the $599 Mac mini. Similarly, the iPhone was first discounted in 2010: when the iPhone 4 was released, the 3GS dropped in price.

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    1. John S. Wilson Monday, May 7, 2012

      True, but neither of those points discount her correct conclusion.

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    2. Hi etc., you’re correct — I was thinking traditional laptop, but I wrote traditional computer. Also, it was 2010, not 2011 when they did the first discount. Thanks for catching that, post is updated with correct info.

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    3. @Etc. When correcting, you might want to get your own facts right. The original G4 MacMini was $499.

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    4. Hamranhansenhansenhamranhansenhansen Monday, May 7, 2012

      Cheapest [notebook] computer. The context is notebooks. Macs have been 75% notebooks for the past decade.

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    5. Pierre French Monday, May 7, 2012

      I would always trust someone who drinks from giant beer glass.

      http://www.flickr.com/photos/mager/2794575176/

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    6. adrianoconnor Tuesday, May 8, 2012

      Also, this statement is incorrect: “But the way in which it’s cut prices isn’t with a new model — it’s been by lowering the price of older devices.”

      Apple do sometimes lower prices with new models. I’m particularly thinking of the current Macbook Air, which of course came at a much lower price. Also, you need to fix the “it’s” ;)

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  2. Idon't Know Monday, May 7, 2012

    You can get the $999 11-inch as cheap as $900 right now.

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  3. “The theme that’s emerging in the flash analysis around the idea of a $799 Air is that Apple wouldn’t do it by choice, but would be “forced to.”

    C’mon guys. (1) Nobody forces Apple to introduce products, (2) Apple doesn’t go for cheap, except on old models, as Erica said.

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  4. Sooo, lemme get your points straight. Every laptop under 4 lbs with some metal on it is a “rip off” of the Air? Uh-huh. And Apple does not bow to market forces at all. Oookay. And anyway no one’s buying those Ultrabooks anyway. Okay gotcha. I see where you’re coming from…Cupertino.

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    1. Peter Deep Monday, May 7, 2012

      I don’t see anywhere that is stated or inferred. You and I must have read entirely different articles.

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    2. No, not “every laptop under 4 lbs with some metal on it”.

      Just the “ultrabook” category, as defined by Intel… in 2011. After the MBA started selling like hotcakes with its new design.

      A new design that is, surely by purest coincidence, closely reflected in Intel’s own requirements for the Ultrabook spec – processor, size, battery, resume time?

      All remarkably like the MBA’s specs, and somehow those had never been a compelling market package before the MBA.

      (For further reminding, let’s look at some coverage of the first wave of Ultrabooks.

      Those Lenovo U300s look really familiar, and unlike previous Lenovo products. And unsurprisingly, the contemporary coverage viewed the entire category and marketing niche as competing with the MacBook Air and as a response to it.

      What does that design resemble? It’s an utter mystery… I can’t imagine, indeed, why anyone thought any of them were a “rip off” of the MBA.

      They’re so different, after all.)

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    3. Well, I don’t know where *you’re* coming from, but it’s clearly a place where reading comprehension isn’t considered a useful skill.

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    4. Pierre French Monday, May 7, 2012

      You should consider learning how to read again pal. What that article said is that even clunky pieces of crap are marketed as ultrabooks, not that they are rip offs of the Air.

      Oh and by the way here’s a knock off of the Air. Amongst many others.

      http://www.theverge.com/2011/11/1/2528456/asus-zenbook-ux31-review/in/2326104

      That does not look like an MBA at all. Yeah, right.

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  5. Thank you Erica Ogg. We steered clear of this at Ultrabooknews completely. Giving Digitimes any airtime doesn’t help anyone.

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  6. Good God Almighty(some hyperbole needed). In order finish reading this Cupertino hack job, I have to force my breakfast down least it comes up. Excellent piece of work.

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  7. I suspect part of the problem with “ultrabooks” is that (as mentioned), too many manufacturers don’t “get” that the big appeal of the Air is that it’s tiny and light. Or the secondary benefit of the SSD, which is crazy-fast access, which makes suspend/resume amazing.

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  8. “Today, you can buy an “ultrabook” that’s thicker than an inch, is heavier than 4 pounds, has a 14-inch screen, a traditional spinning hard drive, and decent battery life. ”

    What laptop has these specs and is being marketed as an “ultrabook?” I’ve been looking at this category a lot recently, and hadn’t seen such an example. Nothing like this shows up on the best list of ultrabooks I could find, either: http://en.wikipedia.org/wiki/Ultrabook

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    1. Don’t forget the other ‘best’ list of Ultrabooks (and ultrathins)
      http://ultrabooknews.com/product-databank/
      Chippy
      ;-)

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  9. Sohrob Tahmasebi Monday, May 7, 2012

    Well thanks for pissing in our cornflakes!

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