It isn't the MBP 14" that is the contention point here. 15" MBA likely will slot in in zone that the MBP 13" covers (with its increasingly data enclosure).
The other major issue is that vast bulk are not going to do 16GB RAM upgrade piled on top of the GPU core upgrade. The more BTO options weave in the more distorted a picture you create about the market product placements Apple is actually going for. Walking the BTO optiona ladder is about goosing more margin. Highly likely Apple doesn't really care much about fratricide when the mark up margin gets very far when basically printing profits either way.
The MBA 13" with your upgrades is $1699 and so is the MBP 13" . Did the sky collapse raining utter destruction? Nope.
The base standard MBA 15" ( likely closer to 14.8 and 14.9 and Apple is rounding up. While rounding down the MBA's 13.6" being rounded down to 13". ) The screens are not 2" gapped. So little good reason that the prices would be broadly gapped. The base standard MBA 13" and 15" will likely start with some GPU cores down. [ NOTE: the MBP 13" has two screens. The touchbar screen costs money. Is that going to more than about an 1" more in diagonal space on the primary screen? ]
Apple could 'fix' this by starting the MBA out with better SSD floor where the bandwidth isn't kneecapped. The difference in NAND availability between 1H '22 and 1H '23 is HUGE. There is now a glut of NAND chips. In 2023, Apple Scrooge McDuck end users on NAND is a bit over the top .. even for Apple. If Apple isn't going 'upgrade' the MBA 13" for a decent amount of time then wouldn't hurt to fix its SSD starting point also.
To unkeecap the MBA 13" (and presumably 15") it is $200 to take it two packages and no bandwidth backslide. There is your $200 right there. Dropping the 2 GPU cores is another $100 . There is a $300 gap between entry MBA 13" and MBP 13" . Another option is that the screen is only $100 more and keep kneecap folks on the base level SSD (hoping folks looking not to backslide just pay up ... on even cheaper NAND. The bill of material costs have gone down on NAND and use that to help pay for screen size bump. ).
[ If the notch is adding cost .. could 'de-notch' it also. I suspect though making more notched laptop screens have economies of scale help across the line up though. ]
"after taking the hit of 3-4 BTO option pricing changes , I'm pretty close to buy the entry more of the next one up ... So what the heck just buy the more expensive model. (with slightly smaller screen). ". Congratulations ... Apple has just walked up the pricing ladder from build to order machine with higher logical overhead to a standard off the shelf model ( likely available immediately in the retail store room).
Problem here where? ( at least for Apple. They just walked you into spending more. At likely about the same profit margins; so they make as much either way. )
P.S. I suspect Apple keeps the MBP 13" around as a cheap alternative to throw M2 ( and later M3 ) SoCs into to soak up entry flow. Pretty good chance the MBA 15" would take over the #2 in sales slot from the MBP 13". Apple keeps it around the the notch haters , touchbar fans , and corner case use cases.
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