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by Jason Snell & Dan Moren

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By Jason Snell

The Retina divide

One aspect of the criticism of Apple’s new MacBook Pro laptops has been their prices. The new models feature higher base prices than the previous generation—in essence, the old Good-Better-Best trio has been replaced by a Better-Best-Bestest set.

It’s not quite a price hike, but it’s an elimination of the least expensive option. And combined with the price hikes internationally due to the stronger dollar, it’s got a lot of people crying foul.

What’s struck me in all of this is the challenge Apple’s had in getting the base prices of Macs down as it converts the entire product line to Retina displays. Since the first Retina MacBook Pro arrived in 2012 for more than $2000, it’s been a question—how long would it take before Apple could clear away the non-Retina laptops and iMacs from its product line while keeping the lowest prices of its product lines intact?

Chart of Mac prices with a line of demarcation at $1299.

Four and a half years later, it’s still an open question. The laptop line still features a $999 non-Retina MacBook Air. Apple’s had a sub-$1000 starting price for Mac laptops for some time now, but the cheapest retina Mac is the $1299 MacBook. That’s a $300 divide. On the iMac front it’s a similar story—the two base models of the 21.5-inch iMac are non-Retina, starting at $1099 and $1299. The first Retina model is $1499, a $200 divide.

In the case of the iMac, that $200 buys you not only a Retina display upgrade but a faster processor—3.1GHz rather than 2.8Ghz—and Apple’s doesn’t appear to offer processor upgrades for any iMac system for less than $200.

This makes me wonder: To what degree are Retina Macs more expensive because the Retina display (and the increased graphics power required to drive them) adds to the cost of making the device, and to what degree is it a feature differentiator that Apple feels it can use as a way to get people to spend more money?

The answer is probably that it’s a combination of factors. Retina displays are undoubtedly more expensive than non-Retina ones, so maintaining profit margins surely factors in. On the MacBook side, the $300 price gap between the 13-inch Air and the MacBook (and more notably, the $500 gap between the 13-inch Air and the 13-inch Pro that’s probably its best analog) suggests that Apple simply can’t sell a Retina laptop for $999 with an acceptable profit margin.

On the iMac, I’m less sure that it’s anything but an artificial distinction. The $200 price difference between the two models, including an upgraded processor, suggests that Apple’s giving away a little bit of profit margin on that model, but not a whole lot. My guess is that the next time Apple updates the iMac, there will still be a single low-cost non-Retina model at the bottom of the line. It might even be a holdover from the previous generation, as the MacBook Air is—no Thunderbolt 3/USB-C ports, no new processors, just something to say your product line starts at $1099 instead of $1299.

Will Apple ever sell a Retina Mac for less than $1299? It seems inevitable, but for now the company seems content to follow a similar approach to the Mac as it does with its iOS devices: Offer the latest and greatest hardware at premium prices, and offer older models at the low end in order to create a range of prices.

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