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Apple is Reportedly Facing a 'Massive Dilemma' With the MacBook Neo

boswald said:
On one hand, I'm disappointed they're cramming "faulty" chips into these and selling them for hundreds, but on the other I'm happy to see so many people experiencing macOS for the first time. I hope Tim can handle a slight bump to profit margins and get it sorted out.
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This is the playbook every chip maker, including Intel, has been using for years. It's called binning. Lithography is expensive, requires incredible precision and relatively minor defects can lead to partial unreliability at certain voltages, temperatures or clock speeds. Chips are designed so these performance impairments can be walled off and the chips used safely at a different spec.

The reverse happens too -- high quality chips are often slipped into a lower-spec box or device. Lower potential margin, but a sale's a sale, and $80 for a chip is still better than not selling at $100. It cost the same to produce either way, the true impact is to the revenue model.

I'd personally be shocked if Tim Apple didn't realize exactly what this decision implied, both for a successful Neo launch and a weak one. They know what it'll cost to slide fully working chips into Neos rather than iPhone Pros.
 
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There is no good evidence for this.

It all startet with an article from Ben Thompson (Stratechery) but he cites no physical evidence of this. He just makes an inference.

I don't think Apple (or TMSC) would store 6 million A18 Pro over a long time. What's more likely is that TMSC continued in small scale to produce A18 Pro after the iPhone 16 Pro was withdrawn from sales in September 2025.

I'm pretty sure all the A18 Pro in the MacBook Neo was produced in 2025 and probably from the latter half of 2025.
 
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iMac The Knife said:
Well, now we know why they were able to get the price point so low on these. Here, have a discarded chip in your machine that we paid $0 for. We think you're going to love it!
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There is no good evidence for this.

It's just an inference made by Ben Thompson (Stratechery) with no physical evidence.
 
MacRumors said:
These so-called "binned" chips with a 5-core GPU are effectively "free" to Apple, given that they otherwise would have been discarded.

Herein lies the dilemma.
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This far more fallacy than 'dilemma'. The binned chips are not necessarily 'free'. They are only 'free' if increase the price of the fully functional chips high enough to cover the total wafer (and testing ) costs. There is zero necessity in making the binned chips entirely 'free loaders'. Apple can charge some money for the binned chip also. That reduces the load costs on the fully functional chips. Let's say the perfect chips sell at $80 and sell the binned ones at $40. That is very , very far from 'free'. If the perfect chips have to carry all of the weight then price could increase to $90 for those. You would be driving down margins on the iPhone Pro so that the Neo's margins could go up. People are paying money for the Neo. Apple doesn't have to give it away for 'free'.

It would nuts to try to make the iPhone Pros solely pay for all the SoCs in the Neo. The Neo is likely paying some non-zero number. The whole point of selling the A18 Pro longer is to lower the R&D recovery costs on each chip sold (which raises margins). Chips shipped to customers that don't collect any money at all is way past goofy. There are costs associated with development the chip that go past just the direct wafer processing costs. Those also have to be recovered.

It is also more than looney toons. The defects are not only going to fall exactly on a single CPU or GPU core. There are other dies with memory controller damage, secure enclave damage , display controller damage. etc. It isn't just one subsystem of the chip that gets defects. The GPU is a larger fraction of the chip so occurrence rate is higher, but that doesn't mean that defects only happen here. Again some example numbers just to make it concrete conversation. If 70 iPhone Pros sold per year and a 90% defect free rate. That is about 7M defective chips. If only 30% have just one defect in just the right place to be sold as a binned Neo chip that is just 1.7M. If needed 2M Neo then would only need another 0.3M 'perfect' chips to round out the load. Even 3M Neos would still get half of the chips covered by the previously gathered ( 1.7M vs 1.3M ). If had a $80 versus $40 split between those groups still getting a blended aggregate cost $60 range. Still cheaper than $80.
 
JPack said:
This is such a fake, made up story.

You literally see the date code on the Neo’s A18 Pro as 2545, meaning November 2025. These chips were made well after iPhone 16 Pro ended production.

So, no these are not “binned” or leftover chips. The A18 for Neo are brand new.
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It's all based on an article from Ben Thompson (Stratechery) who made an inference based on the A18 Pro having one less active GPU. He had no physical evidence to support his claim.

Now you have even provided evidence which makes is claim unlikely to be true.
 
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Kidseeghost said:
Apple was probably planned this as price ladder device and not for it to sell well. They wanted people to climb the ladder to the Air that’s why it’s crippled.
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There a literally billions of people on the planet that cannot climb the ladder higher. The Neo is a product that is mainly targeted at folks who have not been able to climb the ladder. The point is to grow the Mac market coverage.

Apple does want the folks who were able to 'stretch' for the Ait to continue to do so. However, that is not the primary target for the Neo.
 
Chopper3 said:
So they don't need to 'run out' of Neo-grade 18 Pros, they can just take otherwise perfect chips and set them to behave at the same level as the 'broken' ones. It's that simple.
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As the article points out, they aren't ever in danger of running out of Neo-grade chips. They're in danger of running out of the "free" Neo-grade chips, and will have to start making new chips at full price and then artificially limiting their core count.
 
MacRumors said:


The all-new MacBook Neo has been such a hit that Apple is facing a "massive dilemma," according to Taiwan-based tech columnist and former Bloomberg reporter Tim Culpan.

In the iPhone 16 Pro models, the A18 Pro chip has a 6-core GPU. During the chip manufacturing process, however, sometimes a CPU or GPU core can turn out to be faulty. Rather than discarding the leftover A18 Pro chips with only a 5-core GPU, Apple opted to use them in the MacBook Neo, as a way of optimizing its supply chain and costs.

These so-called "binned" chips with a 5-core GPU are effectively "free" to Apple, given that they otherwise would have been discarded.

Herein lies the dilemma.

In the latest edition of his Culpium newsletter today, Culpan said the MacBook Neo is selling so well that Apple's supply of the binned A18 Pro chips with a 5-core GPU will "run out" before the company is able to fully satisfy demand for the laptop.

Apple's initial plan was to have suppliers build around five to six million MacBook Neo units before ceasing production of the model with the A18 Pro chip, he said, but it sounds like demand is so strong that Apple might run out of A18 Pro chips to put in the MacBook Neo before the second-generation MacBook Neo with an A19 Pro chip is ready next year.

Apple is unlikely to mark the MacBook Neo as temporarily sold out, so it may be forced to take action, but profit margins might be affected.

A18 Pro chips are manufactured with TSMC's second-generation 3nm process, known as N3E, and Culpan said TSMC's N3E production lines are currently operating at maximum capacity. As a result, he said that Apple may have to pay a premium to restart A18 Pro chip production for the MacBook Neo, which would lower its profit margins.

Apple would have to disable a GPU core on these chips to ensure that they have only a 5-core GPU, like all other MacBook Neo units sold to date.

Alternatively, Culpan said that Apple could reallocate some of its chip production that was originally planned for other devices, but he said the cost would still be higher than what it paid for its initial batch of A18 Pro chips.

Culpan speculated that Apple could also opt to discontinue the $599 model with 256GB of storage, leaving the $699 model with 512GB of storage and a Touch ID button as the only configuration available. This is unlikely to happen any time soon, in our view, given how heavily Apple has been promoting the MacBook Neo's affordability.

Apple might also be able to move up the release of a MacBook Neo with the iPhone 17 Pro's A19 Pro chip, but that too would be a costlier option, at least until the company achieves a sufficient stockpile of binned A19 Pro chips with a 5-core GPU.

In any case, Apple could opt to keep the starting price of current and future MacBook Neo models at $599 and simply accept lower profit margins on the laptop, especially given that it attracts customers to the macOS and broader Apple ecosystem.

Two weeks after MacBook Neo pre-orders began last month, Apple's CEO Tim Cook said the Mac had its "best launch week ever for first-time Mac customers," suggesting that the MacBook Neo has been a massive hit. This news should not come as much of a surprise, as the MacBook Neo is the most affordable MacBook ever released.

All configurations of the MacBook Neo currently have a 2-3 week delivery estimate on Apple's online store in the U.S. and many other countries.

Article Link: Apple is Reportedly Facing a 'Massive Dilemma' With the MacBook Neo
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False.
It does not cost less to manufacture a “binned” chip. The binned chip has the same manufacturing cost. The speculation that Apple inventoried five million binned IC’s is just that - speculation. Even more ridiculous: The speculation that Apple designed the Neo assuming a CPU cost of zero. Surely they did no such thing.

It is estimated that Apple sells over 10 million MacBook Airs annually. So why would anyone at Apple assume the volume of a $600 laptop would be only 50% as high as the volume of their $1,100 laptop?
 
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switz said:
Please note that the screen on the Neo is NOT one of the top specifications screens that exist. Thus a binned core is immaterial to the operation of the Neo and I would wager most customers are not rocket scientists and thus do not need the extra core.
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It's the only part of the Neo I've been mildly disappointed in - going back and forth between a 16 Pro and the Neo, the screen differences are noticeable. The Neo's screen isn't terrible, better than the M1 Air, but the 16 Pro's is much brighter (the main thing I look for!)
 
iMac The Knife said:
"These so-called "binned" chips with a 5-core GPU are effectively "free" to Apple"...you'll have to take this up with the author of this article.
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They are not free. Apple buys wafers from TSMC like everybody else. They don’t get their money back when a die fails qual. Do you think TSMC says, “Here, have five million free chips, go sell them and do whatever you want?” Of course not. That is not how the semi business works.
 
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The A18 is the same generation as the M4 - the M4 just has more cores. I wouldn't be too surprised if under the hood, we eventually see "super binned" M4s masquerading as A18 Pros. Or Apple could just release an M4 variant at $799 to take some pressure off of the $699 model. Release it with some new colors, everything will be fine.

And for the people who are complaining about the use of a 'binned' chip in a $599 laptop - did you realize that the $2,199 MBP uses a binned M5 Pro? Get out your pitchforks!
 
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hans1972 said:
It's all based on an article from Ben Thompson (Stratechery) who made an inference based on the A18 Pro having one less active GPU. He had no physical evidence to support his claim.

Now you have even provided evidence which makes is claim unlikely to be true.
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The more I think about it, the more crazy it sounds that these chips are actually binned.

Neo's A18 Pro chips are clearly dated November 2025. If these were binned chips, they would be dated early- or mid-2024.

The alternative theory is those are binned chips cut from wafers back in 2024 and stored as loose dice until November 2025 for the Neo. But every move, inspection, or re‑sort of those loose dice increases damage risk. Unpackaged dice also risk contamination from oxidation. So why the heck would Apple tell TSMC to delay packaging them? All of this also ignores common sense that a $599 MacBook is probably going to have huge demand, so you can't rely on scrap chips for a new product line.
 
You know... Connecting the dots here, I wonder if this also accounts for the conflicting iPhone Air 2 rumors we have got lately. Initially, Air 2 was slated for next spring with some design updates. Now its being rumored for fall this year with a simple spec bump to the A20. I wonder if this is part of the plan to move the Air off of A19 pro sooner so that it can be devoted to the neo faster. The current Air uses the binned A19 pro with 5 GPU cores which would be the same config as the neo.

The initial plan of the second gen neo arriving "mid-2027" aligns with the Air 2 arriving spring 2027...
 
Zackmd1 said:
You know... Connecting the dots here, I wonder if this also accounts for the conflicting iPhone Air 2 rumors we have got lately. Initially, Air 2 was slated for next spring with some design updates. Now its being rumored for fall this year with a simple spec bump to the A20. I wonder if this is part of the plan to move the Air off of A19 pro sooner so that it can be devoted to the neo faster. The current Air uses the binned A19 pro with 5 GPU cores which would be the same config as the neo.

The initial plan of the second gen neo arriving "mid-2027" aligns with the Air 2 arriving spring 2027...
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So you think:

1) Apple prefers to sell a $599 device instead of a $999 device?

2) Neo has high demand. Since it's so high, it needs an update to A19 Pro sooner rather than later?
 
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