Apple considers dropping $599 MacBook Neo entry model amid rising chip and DRAM costs

Doubling production to 10 million units requires fresh A18 Pro chips from TSMC at full price rather than binned rejects, while DRAM costs surge 57% and 3nm capacity tightens.

The MacBook Neo might lose its most appealing trait thanks to the ongoing RAM shortage. According to analyst Tim Culpan, Apple could discontinue the budget-priced $599 base configuration of the Neo, leaving only the $699 model with 512GB of storage. Earlier this week, Apple similarly stopped selling the most affordable configuration of the Mac mini, […]

Apple is considering dropping the cheapest MacBook Neo configuration as one possible response to the rising cost of building the popular laptop, according to Taiwan-based tech columnist and former Bloomberg reporter Tim Culpan. The Neo currently starts at $599 for a 256GB model, with a 512GB version at $699. Writing in his latest Culpium newsletter, Culpan says cutting the entry-level 256GB model is among the options Apple is weighing as component costs climb. Such a move would push the Neo's effective starting price up by $100 without raising the price of any individual configuration. Apple recently made a similar move with two of its other Mac models. Apple stopped offering the Mac Studio with 512GB of RAM in March, and it dropped the Mac mini's lowest 256GB storage option last week, making the latter's starting price increase from $599 to $799 in the United States. The moves were made due to higher-than-expected demand and a worldwide shortage of memory chips bumping up costs as AI data center build-outs squeeze supply. Culpan says the pricing strain around the Neo is tied to Apple's push to ramp up manufacturing. Shipping estimates on Apple's website currently sit at two to three weeks across the lineup following stronger-than-expected demand, and the company is said to have instructed suppliers to increase production capacity to 10 million units, roughly double the original forecast of 5 to 6 million. To meet its revised production goal, Apple needs a new supply of A18 Pro chips from TSMC. The Neo uses the same chip as the iPhone 16 Pro, but existing inventory was reportedly depleted by the early demand. TSMC is also said to have limited spare 3nm capacity, with AI-related orders consuming much of its output. Apple's costs are being further complicated by the fact that the initial Neo batch used lower-bin A18 Pro chips with one GPU core disabled. However, a fresh production run would produce more fully functional chips, increasing the per-unit cost even before any expedited manufacturing premiums are applied. If Apple ultimately decides against dropping the $599 MacBook Neo configuration, Culpan says the company is alternatively considering introducing new color options for the current-generation Neo to cushion a potential price hike.Related Roundup: MacBook NeoBuyer's Guide: MacBook Neo (Buy Now)Related Forum: MacBook NeoThis article, "Apple May Drop Base $599 MacBook Neo as Chip, DRAM Costs Climb" first appeared on MacRumors.comDiscuss this article in our forums

Apple is considering adding new colors to its MacBook Neo lineup as a way to cushion customers against a possible price increase, according to Taiwan-based tech columnist and former Bloomberg reporter Tim Culpan. Writing in his latest Culpium newsletter, Culpan says that the runaway success of the entry-level laptop has left Apple paying more for the components inside it. As a result, he says new finishes are one option being weighed by Apple to keep enthusiasm high if those costs end up getting passed on to buyers. Starting at $599, the Neo is currently sold in Citrus, Blush, Indigo, and Silver. Apple does not appear to have settled on which colors might join the lineup, and the report does not name any specific shades the company may be considering. The pricing pressure is said to stem from Apple's decision to dramatically scale up production. After Neo demand outstripped initial expectations, Apple has reportedly asked suppliers to prepare capacity for 10 million units of the debut model, up from an earlier target of 5 to 6 million. Shipping estimates on Apple's website currently sit at two to three weeks across the lineup in the U.S. and many other countries, with Quanta and Foxconn said to be racing to fill orders from factories in Vietnam and China. However, meeting the doubled production target requires a fresh batch of A18 Pro chips from TSMC. The Neo uses the same system-on-chip as the iPhone 16 Pro, and Apple quickly exhausted its existing inventory filling early orders. The original run was made on TSMC's N3E process at least two years ago, and it is believed that TSMC has no spare 3nm capacity to allocate, as AI customers are sucking up much of the available output. What's worse for Apple is that the first batch of A18 Pro chips were "binned" versions with minor defects that, rather than scrapping, were repurposed for the Neo by switching off one of the six GPU cores. That means a new production run will result in top-tier chips rather than defective ones, which means a higher per-unit cost that Apple will have to pay even before TSMC adds a premium for expedited production. DRAM prices have also climbed sharply since the Neo first went on sale -- again driven by AI data center build-out -- which has pushed the laptop's bill of materials higher still. Culpan reports that Apple has not ruled out raising the Neo's price as a response. Related Roundup: MacBook NeoBuyer's Guide: MacBook Neo (Buy Now)Related Forum: MacBook NeoThis article, "MacBook Neo Could Get New Colors to Cushion Potential Price Hike" first appeared on MacRumors.comDiscuss this article in our forums