MacBook Retina Displays to Raise Consumer Price by $300?
Rumors are mounting that the next MacBook will contain the power of the Retina Display. But is it worth the extra expense?
Last week, MacRumors and numerous other outlets reported that if Apple (NASDAQ: AAPL) chooses to add a higher-res screen to its portable line of computers, the company will have to spend nearly $100 more on component and manufacturing costs.
At that rate, the next MacBook Pro could cost $300 more than the previous model.
How so? Let's analyze the component costs of the iPhone 4. Last summer it was revealed that Apple spends $178 on the component costs of each iPhone, which sells for an average of $560 (consumers pay less because of subsidies, but the cellular provider must pay up). This means that the company earns more than $350 on every iPhone sold, hence the reason why Apple's profits are so enormous each quarter. It also means that Apple's markup is more than three times the cost of its components.
Thus, if the MacBook Retina Display ends up costing Apple $100 more than its current display, and if Apple applies its 3X markup strategy to every product it manufactures, consumers could see MacBook Pros jump from a starting price of $1,199 to $1,499.
The Silver Lining
Realistically, Apple cannot raise the price of its MacBooks without losing a few sales. To prevent this from happening, the company will likely add a few new features to each Mac: solid state hard drives, thinner/lighter body, improved battery life, faster charging, and/or superior graphics from NVIDIA (NASDAQ: NVDA). NVIDIA is rumored to be taking the place of AMD (NYSE: AMD), the company that makes the graphics chips for the current MacBook Pros.
For a good 12 months now, Apple has been rumored to be working on a MacBook Air/MacBook Pro hybrid that will lead to the eventual marriage of both lines of computers, and eventually eliminate the need for separate offerings. That merger will inevitably come with higher prices (a high-end MacBook Pro can cost well over $2,000 -- much more than the most expensive MacBook Air, which retails for $1,599). But if consumers feel like they are being given more value for the additional fees, they'll accept them.
When it comes to Apple products, they always have.
Follow me @LouisBedigianBZ
© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.