Apple turns the RAM crisis into an opportunity

TL;DR: Meet the MacBook Neo—Apple's cheapest laptop ever, announced yesterday following the release of a budget-option iPhone on Monday. As customers balk at higher prices from tariffs and RAM shortages, the company known for exorbitantly priced tech gear is making a statement: It won’t give an inch to its budget-friendly competitors. And it could be the right play for the company at exactly the right time.

What happened: At just $599, the 13-inch MacBook Neo is the thriftiest line of laptops Apple has ever released. It’ll actually run you the same amount as the new entry-level iPhone 17e, and it comes in four colors, including a soft “blush” and “citrus” shade.

These product launches might seem out of character for a company that once charged $999 just for a monitor stand and still charges $19 for a polishing cloth, but it’s also a sign of the times. The cost of DRAM has shot up by about 171% in a year, and the price of tech gadgets has been climbing quickly—making affordable options more attractive to sticker-shocked consumers.

Why the Neo is so cheap: If you’re wondering whether there’s a catch—maybe the Neo is the first MacBook made of cardboard—the crucial cost-saving factor is that this laptop is basically an iPhone with a much bigger screen and a keyboard, using the same A18 Pro chip as the last-gen iPhone 16 Pro. Like the 16 Pro, the Neo has just 8GB of RAM—the MacBook Airs all come with 16GB these days—and it only has a slim 256GB of storage.

There are other tradeoffs with the Neo, too: It uses a mechanical trackpad instead of Force Touch, the base model doesn't include Touch ID, and the keyboard isn't backlit. While Apple's latest refresh focuses heavily on integrated AI and the Neo's product page claims it was "built for Apple Intelligence,” its base 8GB of RAM is only just enough to run Apple Intelligence, leaving very little headroom for anything else.

The Neo’s cheapness is also propped up by price hikes on all other MacBooks, with the new top-of-the-line MacBook Pro now running up to $400 more at $3,899 (the base version is $1,699). The fact that Apple charges a premium on these high-end models means it can likely afford to take lower margins on the Neo.

How Apple is budget-mogging its competitors: Apple is essentially the only Big Tech firm that’s primarily a hardware company. It already dominates the smartphone market, commanding 69% of it in the US and 20% globally last year. The big selling point of its rivals, including large Chinese phone makers like Xiaomi, Oppo, and Vivo, is that they offer more affordable options than Apple’s shiny luxury goods. Now, as these lower-margin brands pretty much uniformly raise prices, their value proposition may dim—giving Apple a ripe opportunity to slide in and bite off even more market share.

Part of what makes Apple so resilient is structural. The iPhone maker designs its own chips in-house and, being TSMC's single largest customer, gets preferential access to supply. Apple's scale also lets it lock in component pricing and supply commitments far in advance, leaving it somewhat better insulated from memory and chip cost shocks than virtually any of its rivals.

The education gambit: Apple’s budget pivot isn’t just about holding tight on market share as hardware gets more expensive pretty much across the board—it might also be a way to make gains in the education space (the bright colorways for the Neo seem to support this theory). The US alone spent more than $30 billion putting laptops and tablets in schools in 2024. Some are already calling the Neo the “Chromebook killer”—though Google hasn’t announced price hikes for these budget computers yet, and the lowest-end models can still be found for much cheaper than $600.

The bottom line: Everyone else is raising prices, and consumers are feeling the squeeze on their wallets. Apple is using this moment to finally charge you less—and it could make out like a bandit because of it. —WK