A More Pragmatic Apple: Cheap Apple Music, MacBooks Pro with Ports
Context (What Happened)
Apple announced a new, $5/month Apple Music tier; color options for the HomePod mini; third-generation AirPods; and high end MacBook Pros that bet on Apple silicon’s integrated memory architecture, embrace mini-LED display technology, and give well-heeled consumers the ports they’ve been clamoring for.
Analysis
Apple Music Voice Plan: The headlines are focused on the extremely expensive M1 Pro and M1 Max MacBook Pro, but Apple began its event with a new, lower-cost music subscription: the Voice Plan. To cut the price of Apple Music in half, Apple is restricting the user interface to Siri and slightly limiting features (ex: no lyrics), but allowing subscribers to use any Apple device for playback. Cheaper subscriptions should expand the market, even if it only serves as an on-ramp for Apple’s more flexible full-priced options.
Competitive response: Amazon has long had a single-device Amazon Music Unlimited subscription option for $3.99/month; it can respond to Apple by opening that up to any Amazon device but limit it to Alexa control. However, Amazon’s current subscription options are reasonably competitive as is; Amazon simply needs to do a better job advertising them to consumers who don’t already own an Echo.
HomePod mini in multiple colors: If you wanted a bright yellow, orange, or navy blue HomePod mini, now you can have one. They’re even cuter than before, but still cost the same $99 and have all the limitations as before. Consumers looking for more flexibility, better AI, and more comprehensive smart home control will still be better served with an Amazon Echo Dot or Google Home Mini for less than half the cost.
Competitive response: Amazon does have colorful Echo Dots for kids, but not adults. Why not?
AirPod 3rd generation: The new AirPods look like the AirPod Pro for $80 less, which might nudge some people to buy them now that their first or second generation AirPods have been used long enough for their non-replaceable batteries to degrade. Apple is upgrading the sound quality, including new drivers, adaptive EQ, six hours of battery life (up from five), quick charge, magsafe wireless charging, and spacial audio. Pricing is $179, splitting the difference of the AirPods 2nd generation without ($159) or with a wireless charging case ($199).
Competitive response: At the $179 price point, almost everyone else offers active noise cancellation and can justifiably differentiate on that basis alone. However, the bigger competitive challenge is that Apple is keeping the the AirPods 2nd generation for sale at $129. That will require companies targeting that price point to drop down further if they were competing with Apple mainly on price. We are already seeing companies like Jabra introduce budget lines at $79; this is rational way to keep higher end customers buying premium products while not letting Apple beat you on price with $129 AirPods.
MacBook Pro 14”/16”: Over the past few years, Apple’s MacBook Pro line has frustrated many Mac-based professionals with keyboard problems, unappreciated Touchbars, limited connectivity, and aging processors. There was little doubt that Apple would solve the processor problem with its own silicon, but it was not clear that Apple would dramatically improve the display, webcam, and speaker system at the same time. Nobody expected that Apple would pander to buyer needs by including the a full array of ports. The new MacBook Pro does all these things in either 14” or 16” sizes:
When Apple introduced the M1 chip, it integrated memory, processing (CPU), graphics (GPU), and assorted special-purpose cores for managing machine learning (AI) and video all on one chip. This was extremely power efficient, but didn’t allow for the amount of RAM the professionals need to keep huge media files in memory, and the GPU cores were not as capable as pro systems – including Apple’s own Intel/AMD options – with discrete graphics. On the new M1 Pro and M1 Max, Apple is doubling down on the single chip integration, piling on the integrated memory (up to 64GB), and adding GPU cores (up to 32). Theoretically, the M1 Max’s 10.4 teraflops of graphics power equals last-generation standalone graphics cards for PCs that require 600 watt power supplies and matches the best current discrete laptop GPUs. However, Apple’s real competitive edge is performance while using the battery; the industry’s dirty little secret is that processors and graphics cards throttle all the way down when not getting power from the wall. The M1’s integrated architecture is designed to deliver full power untethered, and that is being extended to the M1 Pro and M1 Max.
Apple is not alone in offering high resolution 120Hz variable refresh rate displays or the first to put mini-LED backlighting into a laptop. However, Apple is the first to combine high resolution, 120Hz ProMotion, and the incredible brightness and contrast of mini-LED. If it lives up to its specs – and Apple’s displays usually do – the display goes a long way towards justifying the MacBook Pro’s price point all on its own.
Next generation silicon and displays are not particularly surprising, but Apple listening to customers and adding ports and card slots to improve utility? That’s out of character for a company that launched the MacBook Air with just a single USB-C port. There is an SDXC card slot to make camera file transfers faster, an HDMI port for displays, televisions, and projectors, and multiple USB-C Thunderbolt ports for everything else. The much-loved MagSafe power connectors are back. The speakers (which were already great) got an overhaul, the webcam (which was not) is now 1080p, and the TouchBar has been replaced with physical keys. What’s next, an iPhone with a headphone jack?
The MacBook Pro 14 starts at $1999 but can be optioned up to $5899. The MacBook Pro 16 starts at $2499 and goes up to $6099. The base configurations are somewhat shy on storage for creators, so most builds will end up $400 - $1000 over the base models. For mainstream consumers entranced by what really does seem like a generational leap in Apple laptops, the new MacBook Pros are credit card busters. However, for true professionals doing content creation these are not expensive laptops, they are powerful tools that will greatly speed up common workflows. Many of these professionals have not updated their laptops in a long time – Apple’s MacBook Pro line has been lackluster for a few years – and the new models are reasonably priced when amortized over their expected lifetime.
Competitive response: Long term, Intel, AMD, Nvidia, and Qualcomm will have to find a way to provide better CPU and significantly better GPU performance while on battery power. Short term, they absolutely must at least find a way to soundly beat Apple on raw GPU performance and video management tasks while plugged in. Competitors can also point to gaming performance as a reason to buy Windows machines as long as Apple doesn’t have developer support for AAA titles – if the game is not available on MacOS, it doesn’t matter what frame rates might have been like on an M1 Max if it did. Touchscreen and pen workflows are another area where there can be advantages to products like Microsoft’s Surface Laptop Studio, which is not competitive with the new MacBook Pro on battery life or GPU.
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