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

[deconstruct60]

The original article that MacRumors is reporting on here is targeting investors, who do care if Apple has to lower the margins.

It isn't necessarilyh lower margins. If Apple had been able to all of the Neo with 'previosly abandon" chips then the margins would be higher than other Macs. Very likely they have a plan to use a mix of previously binned and new perfect chips to fullfill the suppose. They are already charging a 'charge back' price for these "free" ( it is in quotes because not really literally true. If literally true then would not need quotes).

Apple is likely charging a A19 Pro price that is lower than what they charged to iPhone Pro. First, they are likel blended ( $40 binned and $80 full average $50-60 ). They are charging for the binned die.

Nevermind that the memory is attached in the final package. That certainly isn't not free. TSMC doesn't even make it.

Most investors don't really want to know how the business really work... just looking for herd dynamics.. "what would other partially clueless people do".

 

[31 Flavas]

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!

You know they're not actually free, right? I mean, that's like saying the binned chips for all of Apple's other Mac products are "free".

 

[Deasnutz]

Wait, so the Neo is just Apple’s leftover crap? Which they hustled poor kids into buying?

 

[bigglow]

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

I see it more likely that the Macbook Neo will be refreshed with the A19 Pro chips sooner rather than restarting or reallocating A18 Pro chips. Resulting in a less than 12 month refresh cycle. Possibly ~6-9 months then normalize to ~12 months.

As the iPhone 17 Pro is still requiring more A19 Pro chips then expect Apple to increase or reallocation orders for it.

I strongly doubt they'll have another run of A18 Pro chips.

Based on supply constraints I expect the Mac mini Neo to come out with the A19 Pro chip.

 

[31 Flavas]

Wait, so the Neo is just Apple’s leftover crap? Which they hustled poor kids into buying?

Got news for you -- this has been happening since the 1970's. 16k EPROMs that had 1 defective chip, would get that defective chip disabled, and be sold as an 8k EPROM. in the 1980's, you know how you'd buy 5, 8, 10 MHz 8086 or 8088? or today how you might buy an Intel i3, i5, i7 or a Risen 3, 5, 7? If you're not buying an i9 or Ryzen 9, you're getting reject CPUs. Those lower numbers are just the imperfect trash CPUs that intel and AMD want to hustle your sorry ass with. Live an learn bro.

 

[CMMChris]

@31 Flavas You forgot to tell him that most Mac base models use Apple's leftover crap as well 😂

 

[31 Flavas]

Deliberately handicapping the chip sounds crazy to me, though Apple can't just give people different chips in the same laptop model.

You know what Intel Celeron processors were back in the day? Junk Pentium II processors.

 

[svish]

Interesting! Seems like a good problem to have. Looks like there will be a new Neo every year going forward. Hopefully the colors will be brighter and better for the next version. With the current Neo, I like only the Citrus.

 

[Reason077]

I'm disappointed they're cramming "faulty" chips into these and selling them for hundreds

There is nothing new or unusual about this. Apple has always sold entry level models using "binned" CPUs with fewer GPU cores. For example, the cheapest version of the M4 MacBook Air is just a "binned" version of the M4 with 2 less GPU cores.

The real difference with the Neo, of course, is they're using a chip originally designed for iPhones and iPads in a Mac.

 

[Basic75]

There is nothing new or unusual about this. Apple has always sold entry level models using "binned" CPUs with fewer GPU cores. For example, the cheapest version of the M4 MacBook Air is just a "binned" version of the M4 with 2 less GPU cores.

The real difference with the Neo, of course, is they're using a chip originally designed for iPhones and iPads in a Mac.

I'll say it once more. All M4 chips are binned. Some chips go into the "fully functioning chip" bin, others go into the "some cores disabled" bin. And while I'm at it, it's "2 fewer cores", not "2 less cores". You are right that this is not new or unusual. Take AMDs Ryzen processors where each CCD has 8 cores but some models only have 6 cores per CCD enabled. There are many more examples across the whole industry.

 

[jlc1978]

Duron chip and then do the pencil bridge hack on them to turn them into Athlon's

Or a hole punch to turn single sided floppys into dual sided ones...

did it mitigate demand that every Intel Mac that wasn't an i7 (or i9 or whatever the premium chip was of that generation) had a "defective" intel chip?

Yup. This whole defective chip argument is silly, all that matters is how well does it work. I'd bet most buyers have no idea what an A17 chip is, they just want a Neo.

it's just how silicon works

And arguing over silly things is just how MR works...

 

[jlc1978]

Folks, please remember that the Neo has more computing power than much of the equipment used in sending the gang to the moon the first time.

The iPhones on Artemis have more computing power as well, and it would not suprise me if tehy beat Shuttle as a bonus ...

 

[dandyryan]

Just take the chips from the iPhone Air. I'm sure they have plenty of stock.

 

[JosephAW]

There are boxes full of binned A18 Pro chips with four cores they could use or possibly A17 Pro from the previous year.

Or Apple could just kill off the product and just say this was a 20th anniversary one off. 🤔

 

[skellener]

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….

At the beginning of the article, it’s stated that these chips are basically free. I think Apple be fine with a slight lower profit margin. 🤦‍♂️

 

[SactoGuy18]

If I were Apple, I would work with TSMC to work on an M1 SoC built on the N3P 3 nm process specifically for the MacBook Neo. The result is an M1 SoC that will run faster than the original M1 because its power consumption will be much lower.

 

[Charlie Bonesx]

At the beginning of the article, it’s stated that these chips are basically free. I think Apple be fine with a slight lower profit margin. 🤦‍♂️

they aren't actually free. and they almost certainly wouldn't have just been discarded if they hadn't put them in the Neo. They would have used them for something.

 

[boswald]

There is nothing new or unusual about this. Apple has always sold entry level models using "binned" CPUs with fewer GPU cores. For example, the cheapest version of the M4 MacBook Air is just a "binned" version of the M4 with 2 less GPU cores.

The real difference with the Neo, of course, is they're using a chip originally designed for iPhones and iPads in a Mac.

Maybe the word "faulty" is the wrong choice. Binning is much more appropriate in this case.

 

[Charlie Bonesx]

If I were Apple, I would work with TSMC to work on an M1 SoC built on the N3P 3 nm process specifically for the MacBook Neo. The result is an M1 SoC that will run faster than the original M1 because its power consumption will be much lower.

you don't want to just keep using older designs for the same os, you end up either not being able to transition low level OS stuff to newer instruction sets, or running multiple threads of code for different chips

 

[Basic75]

If I were Apple, I would work with TSMC to work on an M1 SoC built on the N3P 3 nm process specifically for the MacBook Neo. The result is an M1 SoC that will run faster than the original M1 because its power consumption will be much lower.

So they should do additional work to achieve something they already achieved in a different chip? Why? And I bet a die-shrink of the M1 still wouldn't reach the single-threaded performance of an A18 Pro.

 

[wallaby]

This is frustrating. I was hoping to buy one for my little bro for graduation, and it’s not guaranteed, so…hopefully they’ll still be available first week of May, if 3 weeks is the standard ship time?

 

[Charlie Bonesx]

.

 

[Charlie Bonesx]

This is frustrating. I was hoping to buy one for my little bro for graduation, and it’s not guaranteed, so…hopefully they’ll still be available first week of May, if 3 weeks is the standard ship time?

in Canada you can order right now and it delivers between 1-8 may

 

[31 Flavas]

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.

Is CPU / GPU and parts “binning” really such an unknown thing among MR forum members?

It’s always been mentioned in articles that the base Mac model units and even the base MBP’s have “binned” processors.

Maybe it just goes ignored or … well - other forum members are an excitable bunch.

 

[Tagbert]

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!

That is a strategy that Apple and other manufacturers have used for many years. It’s a smart way of dealing with the failure rate of chips on each new fab process generation and lets them use those chips in lower cost devices. It’s good for Apple and good for the customers. And it’s less wasteful than just disposing of the chips that, other than having a disabled GPU or two are perfectly fine. People do seem to love it.