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

[MacTiki]

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

Apple is reaching a tipping point with regards to nickel and diming customer for the slightest configuration upgrades.

People are starting to ask do I need to spend $1,200 on an entry level Apple or would a $500 Windows system work for me.

And while Apple Silicon is fast and energy efficient it is becoming more of an appliance than a computer with no upgrade path and limited support by third party software and OSs

With Intel based Macs VirtualBox, VMware and even bare metal third party OS installs are easy not so much on Silicon.

 

[UK-MacAddict]

I had preferred macs over window pc's as I'm no fan of Microsoft. But I switched over to Windows. After you clean it up and debloat it, it does the job with little mess or fuss. The computers last longer at a cheaper price. It may not look as nice but its more capable than a mac. I don't use any Microsoft products or services and iTunes works fine on Windows. Apple need to double-down their efforts for the mac.

I've switched over to Windows as well since Macs can no longer boot camp. Also for the money I paid it obliterated everything Apple had on offer at the time.

It was a big move since I've been using Macs since 1998. However, Windows has improved a lot since I last used it on daily basis. It's just as smooth as MacOS these days.

 

[AppleUser2]

I think it was on Unbox Therapy where the guys were talking about what people are looking for in a slow economy, and that's value for money. Performance-wise, the Air can do most tasks outside of demanding Pro workflows. Even if folks do some creative projects every now and then, the Air is enough - and in some ways that competitive advantage of Apple Silicon is a shot to the foot, most folks just don't need a MacBook Pro anymore.

One thing I will say, is the loss of Bootcamp, coupled with growing interest in gaming on PC - even doing a build - I think this time around Mac folks are actually looking at the PC as a 'Pro' purchase - or at least, that's where that money is going, because the Mac can no longer scratch that itch for tinkerers and folks who like to dual boot. A lot of Mac users have become used to being able to dual boot for what feels like decades.

I know for me that's the case - the Air is a fantastic everyday laptop, great plugged into a screen and covers a lot of bases, but for gaming & other Pro workflows, for hobbiest computing, it's not hard to be looking elsewhere.

Yeah, times are tough and the increased costs on some Apple products (base iPad, some Macs) is going to bite.

 

[steve09090]

1. Slowing down HD speeds “forcing” people to a higher tier will keep some from purchasing, maybe just offer a decent whole package to start.
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.
3. If the whole market is slowing down, and you are priced at the highest end of that market, then yes, your sales will suck.
4. As others have said, with layoffs and shrinking personal budgets, people will look for value and cutting expenses.

But I’m sure in their millionaire minds, prices aren’t even a factor.

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?

 

[bice]

Best to wait for the M5.

BMW did a great job with their M5 and it has been out for ages.

 

[loby]

I don't think the price of them is helping. The 16" MacBook Pro went up by a lot with the M2 and the M2 Air went up compared to an M1 Air. They need to come back down a bit in price.

The issue is the economy (and world economy too). Prices for everything are going up, especially on necessities (like groceries and gas etc.). Wallet is getting dry.

It is not that Apple products are just so good now (like the MacBook Air or M1) that no one needs a Pro or M2 or a better laptop. It is as if telling Apple that you have made a product that is too good and lasts too long, so therefore make a product that is only good for a year to make people buy...dumb.

Customers who buy MacBook Pro's do not buy every year, it is not an iPhone.

Apple is a business and knows across the board that sales will start to get hit as possible recession comes and/or prices rise, especially on their higher price items. They will take the hit like everyone else. No surprise. It is not because M2 does not give a reason to buy over M1.

Maybe the big days of spiked sales and profits are coming back down to reality for Apple. Tim's magic might be leveling out. Not a big deal. Apple will still make the bucks regardless, maybe (like everyone else) not as before. You are not going to have record sales every quarter or year, share holders have to come out of the clouds and back down to earth.

Tim has to now shift and re-train the share holders not to expect or rely on "crazy" profits each quarter or year.

Hearing a slowdown in sales is not surprising...ok Apple...bring out M3 Mac Pro..

 

[UK-MacAddict]

I'm looking for a big laptop to replace an old iMac. the base 16-inch Macbook Pro with 1TB of storage looks to fit my criteria. In France, I will have to pay 3229 euros for this configuration.
3229 euros. Let that sink in.

For this same price I could (just an example) configure a Surface Laptop 5 15" with 32GB of RAM and 1TB. You'll say yes but the MacBook is better at managing RAM and more powerful AND I WOULD AGREE. But for this price I also get 4 years of premium support (equivalent to Apple Care) and 15 months of Office for the whole family.

This will not make me switch, but it's still very tough to swallow considering the whole package and context. I can understand why many people are holding off their purchase or simply buying elsewhere.

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

 

[senttoschool]

Explains why the iMac never got the M2 update. It's already a poor seller. Why update it to M2? They'll wait for M3.

 

[UK-MacAddict]

1. Slowing down HD speeds “forcing” people to a higher tier will keep some from purchasing, maybe just offer a decent whole package to start.
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.
3. If the whole market is slowing down, and you are priced at the highest end of that market, then yes, your sales will suck.
4. As others have said, with layoffs and shrinking personal budgets, people will look for value and cutting expenses.

But I’m sure in their millionaire minds, prices aren’t even a factor.

1TB SSD with 16GB RAM. This should be the standard starting point across every single Mac line.

 

[mdatwood]

Not every year but every two/three years would make more sense since the M2 just demonstrated how much of a failure it was.

Failure? C'mon. The M2 was a normal upgrade. It was no way a failure.

The real issue is that the M1 was/is so good (not just the chips, but the whole machines), that there is zero reason to upgrade until machines break from use. I have a 16" M1 Max, 64gb and it's the best computer I've ever owned. I never think "I wish this was faster".

I like that Apple is doing more frequent incremental upgrades so that when I do have to buy another machine it won't leave me wondering/waiting for something new.

 

[Robert.Walter]

Are you expecting like a new "new" MacBook Pro every year or something? It's perfectly normal for OEMs to release major hardware revisions every few years with minor increments in between.

The is exactly the model Apple is using w phone and watch.

 

[Glenny2lappies]

Some of us are rather attached to our Intel machines as there's still things we do on them which can't be done on Apple silicon. Running Win-DOS in a VM for example -- and no, we can't run the RISC version

 

[newdeal]

Mac sales are driven by younger people (college and univeristy ages as well as young parents). These people are hit hardest by rising rates and inflation because they are the most likely to have large debt. They are also the most likely to be hit by a contracting job market because they have either no or low seniority. There comes a day when their credit cards are maxed out and that is when they stop spending (because they have a spending addiction) and have hole to dig out of that will create a reasonable downturn in the sales of things like Macs etc. This is why Apple is trying to expand their financing options but unfortunately its may be hard to pay off the financing if you have maxed out credit cards so they have to be careful on who they approve. The good thing is that services are cheap enough that they should continue and iPhones still get dropped in the toilet and are seen as necessities at this point so the company will be fine but might have to cut their Mac margins which I assume are likely higher since switching from intel chips to their own in an attempt to keep sales up

 

[tucupeis]

trade in value of a 1yr old m1 max mbp 16 ($5600 new) is less than $1000. its ridiculous

 

[neuropsychguy]

Yes… if sales are plummeting then your product is not worth the price tag you’ve put on it. It’s that simple. Either you bump the specs, lower the price or accept the lower sales

There is a recession that's hitting around the world. Even if it isn't or doesn't become a recession everywhere, there have been signs of economic downturns for many months now. PC sales worldwide were down at least 16% last year compared to the previous year with particularly steep declines in late 2022. Of the major companies, Apple's sales declined the least: https://www.gartner.com/en/newsroom...h-quarter-of-2022-and-16-percent-for-the-year

2023 will not be better (from a sales standpoint for companies like Apple). 2024 might not be better either but it depends on how bad the economic downturn / recession is and everything else affected by it.

 

[gmarm]

I mean, I don't know, perhaps paying 5k for a high-end Pro machine is a bit too much? It's what keeps me from upgrading anyway.

 

[rp2011]

The base M2 Macbook Air had no reason to exist. It is not better than the base M1 and not better than the base M1 MacBook Pro 14" Consumers are not stupid. If Apple offers a solid replacement, people will flock to it as they did with the M1.
I certainly would have bought a base M2 Air if it was a better value than either the base M1 or the base M1 14"
When all was said and done most consumers are deciding to wait for the M3

 

[Glenny2lappies]

They are more than I can afford. Don't really want to spend more than £1000 then you've got to factor in £400 to upgrade RAM and SSD since you can't do it yourself any more.

You'd be hard pressed to get a decent premium laptop for £1000 even if it was running Microsoft software.

Macs do compare well with premium laptops in price; hence Microsoft's Surface products are almost copies of the Macs, but hobbled by the awful Windows experience.

The other thing about Macs is they tend to last a long time.

 

[Admiral]

Hopefully this means that M3 chips are on the cusp of being released into new products like the 15 inch Macbook Air?

That's what I think. Apple's traditional Steve-era response to recession was "We'll innovate our way through this." I'll bet Apple is working hard to ready M3-generation Macs with very significant performance improvements.

 

[neuropsychguy]

3. If the whole market is slowing down, and you are priced at the highest end of that market, then yes, your sales will suck.

That's not really what happened last year. Apple's sales declined the least for the major computer companies.

 

[spnc]

Failure? C'mon. The M2 was a normal upgrade. It was no way a failure.

The real issue is that the M1 was/is so good (not just the chips, but the whole machines), that there is zero reason to upgrade until machines break from use. I have a 16" M1 Max, 64gb and it's the best computer I've ever owned. I never think "I wish this was faster".

I like that Apple is doing more frequent incremental upgrades so that when I do have to buy another machine it won't leave me wondering/waiting for something new.

Relative failure yeah, by Apple standards. I guess they didn't plan to halt chip production so early in their forecasts.

 

[spnc]

Also the fact that you get a slower/cheaper SSD in the M2 clearly doesn't send a good signal to consumers lolol

 

[Realityck]

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.

So you had a China’s Fall 2022 covid 19 policy heavily impacting Mac production that resolved itself in Dec 2022. It’s not that long ago that Apple issued warnings about that quarter. Then we have the wonderful M2/Pro Mac mini models along with 14”/16”M2 pro/max MBP early January showing Apple could move past these problems. Now we are expecting more model updates not like it’s been bad otherwise. Stuff happen, why do you think Tim Cook was over there, promoting their manufacturing as returning. Does Apple/Foxcomm make that much from Korea?

 

[Solomani]

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

True. But it's a fantastic word for sensational journalism. 😄


As stated above, the entire PC industry is contracting, which includes Apple.


My take on this? I'm less worried about specifically Apple. I'm more worried that "if entire industries" are contracting and collapsing.... that's a 500% precursor and accurate predictor that we are heading into wider economic Recession.

Get ready to see your loved ones lose their jobs. Get ready to see your favorite restaurants and favorite small shops get shut down for business permanently. Just like what happens in every Recession.

Apple? Apple will survive just fine. Just like they easily survived and rode out every damn Recession (contraction is just a gentle way of saying it) for over 4 decades.

 

[Steve121178]

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.

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

Too expensive. UK pricing is obscene. Anecdotally I know plenty of people who've simply been priced out of Macs and bought PC's instead. Apple got far, far too greedy.