The MacBook Neo May Be Too Popular for Its Own Good
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Apple’s MacBook Neo has been selling like hotcakes since it first went on sale four weeks ago. It began flying off the shelves on day one, with shipping estimates rapidly climbing into late April, and it’s shown no signs of slowing down.
As of today, the soonest you’ll be able to get your hands on a new MacBook Neo if you order online — in any color or storage configuration — is sometime in May. You might have better luck visiting a local Apple Store, particularly if you’re not fussy about the color, but many of those are also having trouble keeping up with demand, with no new stock expected before the middle of next month.
In an unusual twist, even third-party retailers are struggling to keep the affordable new MacBook on their shelves. Best Buy and Target are listing delivery dates at least a week or two out.
While Apple is naturally thrilled at how well the MacBook Neo is selling — CEO Tim Cook called it the “best launch week ever for first-time Mac customers” — we’re beginning to wonder if Apple actually underestimated the demand, especially in a shifting market where rising memory prices are driving many competing products into the stratosphere.
For example, while the MacBook Neo is maintaining its steady $599 base price (which drops to $499 for education), potential Microsoft Surface buyers have seen those devices skyrocket in price. ZDNET’s Ed Bott wrote yesterday on how the same device he purchased in December — a Surface Pro with 32 GB RAM and a 1 TB SSD — for $1,822.17, is now selling for $3,071.63.
As anyone who has been paying attention to the consumer electronics market probably knows by now, this is a direct result of “RAMageddon” — rising prices on memory and other chips as a result of an AI gold rush that’s driving up demand much faster than manufacturers can keep up.
Apple isn’t entirely immune to this — some Mac Studio configurations have clearly been impacted — but it’s doing its best to weather the storm and hold the line on iPhone pricing.
The MacBook Neo’s Secret Sauce
However, it also has an interesting ace in the hole with the MacBook Neo. The affordable laptop is built using an A18 Pro chip with Unified Memory that not only makes it less impacted by RAM prices, since the 8 GB is baked into the chip, but has also let it use an existing supply of chips that might have otherwise gone into the bit bucket.
The A18 Pro debuted in late 2024 in the iPhone 16 Pro and iPhone 16 Pro Max. The MacBook Neo is the first time it’s been used in any other device, but there’s also a telling difference in the MacBook version of the chip: it has one less GPU core.
The MacBook Neo has what’s known in the industry as a “binned” chip. It’s far from the first time Apple has done this — the first Apple silicon MacBook Air famously had a “binned” M1 chip, and we’ve also seen a similar process with A-series chips on the last two iPad mini models and even the 2021 iPhone 13.
What happens here is that not every chip that comes out of TSMC’s fabrication process runs perfectly, and this specifically seems to impact GPU cores more than anything else. When an A18 Pro chip shows up that can’t run all six GPU cores properly, TSMC simply burns one out and calls it a five-core chip.
Since the iPhone 16 Pro models all promise a six-core GPU, Apple is left with a “bin” of chips that it can’t use in its iPhones. Since it costs money to make those, it doesn’t just want to toss them out, so it saves them for future products. For example, the M3 iPad Air got M3 chips left over from the M3 MacBooks, the 2024 iPad mini got the iPhone 15 Pro’s leftovers, and the MacBook Neo gets the A18 Pro chips that weren’t good enough to go into an iPhone 16 Pro.
The Neo Dilemma
The problem is that Apple doesn’t have an unlimited supply of these binned A18 Pro chips, and it no longer appears to be running a fabrication line to create new ones. After all, the iPhone 16 Pro models were discontinued in September, which leaves the MacBook Neo as the only current Apple product that still uses any version of this chip.
This strategy is fairly widespread, and as Ben Thompson points out at Stratechery, it effectively means that Apple is using “free” chips for the MacBook Neo. That’s a handy cost-cutting measure that its competitors can’t match.
The question is what happens when Apple runs out of these chips. Apple is reportedly facing a dilemma over what to do once the current A18 Pro bin runs dry. According to Tim Culpan at Culpium, it may be forced to ramp up production of new A18 Pro chips, which would “risk killing the sweet profit margins it enjoyed on making a device with ‘effectively free’ chips.”
On the flip side, while Apple already has a “MacBook Neo 2” planned for next year — which it would have to as it never expected the A18 Pro supply to last indefinitely — it might end up needing to accelerate that switch. The catch is that, while it undoubtedly already has a healthy supply of binned A19 Pro chips from the iPhone 17 Pro models, many of those are already going into the iPhone Air, which also conspicuously has one less GPU core compared to Apple’s flagship. Assuming the A19 Pro has the same manufacturing yields as its predecessor, that could mean fewer spare chips to power a MacBook Neo.
It will be interesting to see where things go from here. While the MacBook Neo isn’t in trouble just yet, Apple might find itself in a crunch position this fall, forcing it to either eat into its profit margins or find some way to tweak its pricing structure to compensate for the chip shortage. Either way, it’s a very safe bet that the MacBook Neo is going to remain on an annual cycle for the foreseeable future.
