Apple Halted M2 Chip Production in January Amid 'Plummeting' Mac Sales

[kingtj1971]

Exactly. No way I would buy a M2, knowing what's coming next. I guess a lot of people in my shoes are simply ignoring the M2.

Sure .... But this has always been the risk of letting the public know about whatever you're working on releasing next as a tech business.

The bigger question might be; "Why do so few people feel like they're in a situation where they need a new Mac ASAP, or want to buy more of the existing model, rather than holding out for something else?"

I think one answer lies with corporate America. In the business world, most places want to keep buying whichever computer(s) they standardized on. They don't care so much about the "next big thing" coming down the pipe. They're more worried about building a uniform system image or configuration that they know lets them set up a new machine to deploy or wipe/re-deploy with minimum hassle. This accounts for a LOT of sales of hardware that's been out for a while and which your typical home users would say wasn't "a good buy" anymore.

A lack of M2 Mac sales tells me you've got a dwindling number of corporations out there who purchased them for their employees. Otherwise, sales would be stronger despite talk of a coming M3.

But I'd also say that Apple hasn't really kept up the value proposition for buying a Mac vs a Windows PC in recent years, and this is starting to really hurt them. No matter how nice a computer is, and even how nice its OS might be? The software has to be there too, or it's nothing more than a good looking paperweight.

Apple already pretty much ceded the entire "games" segment to its competitors. (Even hold-outs like Blizzard finally got tired of trying to support a native Mac version of games it developed.) It's become largely irrelevant in the entire educational sector too, at this point. (Yeah, you might still have a relatively large number of college students carrying a Macbook around -- but that has as much to do with the brand recognition and "coolness factor" as anything practical.) You don't walk into your elementary or high schools today and see computer labs of all Mac like you used to. Google and Chromebooks took over a big chunk of what was once Apple's territory there.

I feel like today's Apple is focused squarely on "creative professionals" as their target market. And yet, even in those fields, people are often questioning the wisdom of investing in Macs. If you're editing video and Final Cut Pro isn't your strong personal preference as an editor -- what does a Mac really give you over a high-end PC workstation? If you're into music composition, how many packages besides Logic Pro really only work on a Mac?

 

[Realityck]

Apple’s Cook-era response to recession is “We’ll milk our customers for all they’re worth. Nickel and dime those suckers!”

A recession is a significant decline in activity across the economy that lasts more than a few months. Are we there yet or is this using the word just to create news associated with some web based warning to cut interest rates before it is too late?

 

[Ener Ji]

Assuming the 15-in MacBook Air rumors are real, I hope this encourages Apple to configure and price it such a way that it'll be a smash hit. M3 chip, dual external monitor support, and priced for strong value is what I'm hoping for.

 

[genovelle]

Plummeting is never a good word when it comes to mac sales.

Somehow we see these reports every quarter it seems. Conveniently weeks before Apple announces their results for the previous quarter. All but once or maybe twice in the last decade these reports are completely wrong, but are never called out.

 

[ry-guy]

So many anti Apple bias going on here.
1. They didn’t "slow" down the SSD. They just used a single chip instead of 2.
2. They released a new model and didn’t reduce the price of the current model. I guess some people want to shop on bargain bins. Feel free.
3. Sales didnt suck. Especially compared to other systems. Get your facts right.
4. Nothing wrong with shopping around, but there is also nothing wrong with quality and the best battery, portability versus power. But everyone has their own circumstances.

I think you’ll find they have their prices worked out pretty well. But what would one of the most succesful companies in the world know, versus the analysis you provided?

Ok, i may have woke up more cranky than normal today but to add:
1. My point still stands, they bottlenecked the speed at which you can transfer data, so still “slowing it down”.
2. My point was compared to “the rest of the world”. It may not have changed in the US but that is the only country it didn’t.
3. Ok, a bit of hyperbole on my part. But the fact that they halted production and didn’t merely cut the numbers means that it “sucked” comparatively to the m1 haha.

Final note: Just because Apple is a successful company doesn’t mean they don’t do stupid things. But regardless, we aren’t in Apples boardroom so we don’t know what they are ever thinking.
Also as an American who moved into a foreign country, i have literally seen all the points above take place. It’s cheaper for me to fly to the US, buy a computer and bring it home than it is to just buy it here. I miss the Apple promised land.

 

[ignatius345]

2. I understand the dollar compared to the rest of the world, but raising your prices on what is already a premium price in the rest of the world, it’s obviously going to affect your sales.

Nope. Macs prices have stayed more or less the same for many many years now -- even as inflation has eaten away the real-world cost. Go back and look at the prices of Macs from 10, 15 years ago.

Take this white MacBook from 2009, as a random example. It was about the equivalent at the time of today's M2 MacBook Air -- a nice non-pro general purpose MacBook. It sold for $999, which is about $1400 in 2023 dollars. Base model MacBook Air M2 is less expensive than that. And the M1 Air is cheaper still.

Fact is, Macs have fallen in real-world cost, along with prices of computers in general. They're still more expensive than bargain PCs, but that's been the case for decades.

 

[defferoo]

I think it comes down to a few factors.

1. Demand - Compared to M1, the M2 release was never going to be as big since so many people waited until the M1 came out to upgrade.
2. Process - The M2 generation of chips is manufactured on N5P which is an enhanced version of the N5 process node used for M1. This resulted in a half-step node upgrade, so the difference between M1 and M2 is not enough to warrant upgrading since there weren't many architectural changes. It also meant that expectations for the M3 are higher which could lead to some people delaying their purchase.
3. Pricing - The M2 MacBook Air, which is their best selling product, was priced much higher than the M1 variant, likely resulting in buyers deciding to wait for the next version to come out before upgrading. I imagine if the M2 Air was priced the same way as the M1, it would have sold much better.

 

[paradox00]

Read my more detailed post above. There's a number of factors that will make the next model(s) attractive for M1 users. Which the M2 failed to deliver because of course it was too soon.

Virtually one should buy a new computer every refresh cycle. That's dumb. To even consider it is a waste of most people's time. It's almost always a waste of money outside of a few niche user profiles. Most M1 buyers are not looking at the specifics of M2 vs M3; they just aren't buying them because they "just bought a computer."

The only real issue is that the markets demand year over year growth, with almost no consideration of what drove the previous years sales. A transition to new, higher performing silicon in the midst of a pandemic driven demand spike for laptops doesn't simply doesn't come around all too often. When M3 macs hit the market, they may still be below M1 sales, but they'll be compared to the previous years quarters with M2 sales, so they'll show year over year growth again, and everything will be good. If M3 came out instead of M2, I doubt it would have shifted the sales narrative too much, even if it will be a much bigger upgrade over M1.

 

[The Game 161]

not a surprise people don’t update their Mac that often. Can’t see myself upgrading mine for at least 3-4 years

 

[Analog Kid]

Taiwan's TSMC did not send 5 nano-process M2 chip wafer workpieces to the outsourced semiconductor package test (OSAT) in January and February, according to the OSAT industry on the 3rd. It is believed that it was because Apple requested to stop production as demand for MacBooks dwindled.​

​

Isn't the better interpretation of this "Sales believed to have slowed after holiday quarter"?

Sensationalism is a little over the top around here.

 

[deasys]

I think we all need to accept the iMac was replaced by the Mac mini/Studio + Studio Display currently. iMac may return but that's why it has been so long between updates on it.

Oh, I know what Apple was thinking (or hoping). However, that combination is a much more expensive and much "messier" desktop solution than the large iMac. Those systems were (and remain!) so ubiquitous for a reason…

 

[insoft.uk]

Apple‘s Mac line is in trouble, when they dropped intel they didn’t drop the price of their new Apple Silicon macs the increased prices, pure greed while M1 was good M2 was basically M1.5 not a huge difference and the lack of reliability even degraded more as everything is getting tied down with SN on component’s and not allowed to self repair as it’s not permitted by Apple you just purchased to use not own out right.

if it wasn’t for iPad & iPhone with iOS development the Mac days would be numbered no reason to exist

 

[Allen_Wentz]

Apple can offer nothing to compete on the GPU front in any Mac with Nvidia 4000 series GPU's.

The question is not does M2 GPU equate to Nvidia 4xxx, but does UMA plus up to 96 GB RAM plus 38 M2 GPU cores get a particular workflow done well? In my case the answer is yes.

lMO the harder question is, how will they compare under 2024/2025 workflows? Personally I suspect OS/apps will have evolved to really like having lots of fast UMA RAM; but I have no special info other than having carefully watched hardware/OS/apps evolve for decades.

 

[paradox00]

Nope. Macs prices have stayed more or less the same for many many years now -- even as inflation has eaten away the real-world cost. Go back and look at the prices of Macs from 10, 15 years ago.

Take this white MacBook from 2009, as a random example. It was about the equivalent at the time of today's M2 MacBook Air -- a nice non-pro general purpose MacBook. It sold for $999, which is about $1400 in 2023 dollars. Base model MacBook Air M2 is less expensive than that. And the M1 Air is cheaper still.

Fact is, Macs have fallen in real-world cost, along with prices of computers in general. They're still more expensive than bargain PCs, but that's been the case for decades.

You're only talking about base price though. I'm pretty sure their average selling price has gone up over the years (but I'm having trouble finding this data). More people have moved away from base configurations, more people have been pushed to higher priced skus, and more expensive models at the top end have been introduced.

I know for myself personally buying a mac is far more expensive now. Most buyers didn't do this, but the past me would buy the processor I wanted and update the ram and hdd/ssd seprately for far less than Apple's premium (before reselling the removed components to recoup even more costs). Now I'm buying the ram spec too and going to external drives for SSD upgrades ><

For the more typical user, 8GB/256GB is far more underspecced than it was when they first introduced that configuration as the base model. Upgrading to what (imo) should be the base configuration in 2023 costs $400.

 

[Schizoid]

No need for Macs any more, this time next year we’ll be doing everything we dreamed of wearing Apple Goggles™ Max Pro

 

[joehohoho]

Massive price increases on top of already inflated upgrade costs doesn’t help their cause.

I mean there’s a difference for paying for a premium product and then that company taking liberties in pricing just because they’re premium. Feel they’ve taken the bite of greed too far.

 

[Realityck]

No need for Macs any more, this time next year we’ll be doing everything we dreamed of wearing Apple Goggles™ Max Pro

So no business or creative needs, just pretending the world goes away. Oh sure.

 

[Mundty]

Apple halted production of its M2 series chips at the start of 2023 following a pronounced slump in global demand for MacBooks, claims a new report out of Korea.

Facing "plummeting" Mac sales amid a severe PC market downturn, Apple in January completely suspended production of its custom-designed M2 series processors that power new MacBook Pro and Mac mini models and the latest MacBook Air, according to The Elec.
As the report notes, TSMC finalizes its fabrication process by sending the wafer-processed products to Amkor Technology's Korean factory for packaging work. However, in January and February there were reportedly no products forthcoming, which also forced the package material parts company for M2 chips to stop supplying the usual materials.

The suspension is said to have continued through February, after which production of M2 series chips resumed, but they were "only half the level of the previous year," said the Korean-language report, quoting a person familiar with the matter.

Apple's revenue was down approximately 5% year-over-year in the first quarter, a steeper decline than had been expected by analysts as Apple grappled with iPhone supply issues in particular but which also saw declines in Mac and wearables.

iPad revenue was up 30% thanks to the launch of new M2 ‌iPad‌ models, but Mac revenue saw a notable drop because there were no new Macs released in the final months of 2022. Mac revenue was $7.7 billion, down from $10.9 billion in the year-ago quarter. ‌

During his Q1 2023 earnings call, CEO Tim Cook admitted that Apple faced a "challenging" situation in the PC market. "The industry is contracting," said Cook. "We have a low share but we have a competitive advantage with Apple silicon, so strategically we are well positioned within the market. But I think it will be a little rough in the short term," added the Apple chief.

Apple unveiled the M2 chip in June 2022, when it appeared in an updated 13-inch MacBook Pro and a new MacBook Air. In January 2023, Apple then added M2 Pro and M2 Max variants to its 14-inch and 16-inch MacBook Pro models, and also added M2 and M2 Pro chips to its Mac mini configuration options.

Apple's first custom processor, the M1, was announced in late 2020 and still powers Apple's 24-inch iMac, which was launched in April 2021. Almost a year later the Mac Studio was unveiled with Max and Ultra versions of the same chip.

An updated version of the iMac with the M2 chip is seemingly missing from Apple's plans, according to Bloomberg's Mark Gurman, and there is no word on if or when a refreshed version of the ‌Mac Studio‌ with M2‌ Max and ‌M2‌ Ultra chips will launch.

Article Link: Apple Halted M2 Chip Production in January Amid 'Plummeting' Mac Sales

Tim Cook is an ignorant **** who doesn’t understand they are pricing mid-tier Users out of the market. The 2009 13-inch MacBook Pro was $1,200 brand new when I bought it and was a superbly reliable machine. At the time 8GB ram was perfect at that time. Fast forward 5 years and I buy the 2016 15-inch MacBook Pro refurbished for $2,000. I wanted the bigger screen and quad core processor, but I figure this is Apple and I’ll experience the same reliability as the first computer. Immediate keyboard problems, none user serviceable battery, ram, or SSD. I’m admittedly frustrated considering how much I paid for this thing, but stick with it until 2021. I start thinking about grabbing a M1 MacBook Air given all the performance upgrades and keyboard fix. $1,200 sounds reasonable until I start looking at the specs, 8GB of ram and 256GB SSD in 2023? $200 for 16GB ram and another $200 for a 500G SSD. At that point you’re nearing the 14-inch MacBook Pro prices, so there is no reason to buy the Air… and there’s their grand tactic. Charge you ten times the price for upgrades to force you into buying the Pro model and zero viable options in between. I’ve gone back to building desktop PCs and using a ThinkPad as my mobile computer. There is a limit to the amount of nickel and dimming you can do to customers. I’ve reached my limit. Bye bye

 

[TheLunaPark]

Literally his number one job as CEO of a publicly traded company.

You can make a healthy profit without ripping people off. Prices in Europe especially are ridiculous.

 

[martinX]

I love Apple silicon but I am finding the release cycle very confusing. I feel like the Pro/Max/Ultra chips need to come before the regular chip, otherwise you end up in the weird scenario where the lowest end Macs are running on newer chips than those at the highest end.

Exactly. Whither M2 Ultra? Still, the way Apple releases things keeps Max Tech busy and Vadim breathless.

 

[reyesmac]

They wouldn't be having this problem if they didn't lean so heavily on being a boutique brand. They make products that are better than what is currently out there but competitors can quickly mimic their style. But in our current world with the supply chain being what it is, would they even be capable of making products that sell at ridiculous numbers and not just ridiculous prices?

 

[falainber]

I believe switching to Intel/AMD CPUs and Nvidia GPUs would invigorate the demand for Macs significantly.

 

[Youth in Asia]

Starting price of M2 MBP in the UK is £2.1K. I'd rather fly to the States and buy one. Apple are fleecing EU(and ex-EU) customers. I blame Tim Apple!

 

[BellSystem]

I think you overestimate how many people are though.

I seriously doubt it is the reason for any noticeable decline in sales.

I say that as one of the people who did enjoy using Boot Camp.

I can generate a list of at least 1,000 machines over several clients that won’t get replaced due to this. I think you underestimate the impact.

 

[turbineseaplane]

They have all become too expensive when factoring in RAM/SSD upgrades that you can only get from Apple