Since most of the R&D are done on the iPhone side, Neo's margin is actually quite good. The R&D for M5 and M5 Pro etc have to be amortised by Air and MacBook Pro.

The percentage should be similar. In the old days of Apple pricing, Apple margin is nearly fixed and you could literally work out their BOM by doing reverse calculations. Things changed with Tim Cook but it is still largely similar.

Lower margin, but higher volume. Plus a subset of the buyers will subscribe to Apple Music, buy apps from the App Store, etc.

I am surprised that they only do it now, since Mac marketshare growth has stagnated for a long time and it's even hard to grow the iPhone marketshare. Growing the Mac marketshare by making very competitive models is one of the best ways for them to grow and to grow services fees.

I think the problem was Apple management was too obsessed with the iPad, believing they would replace laptops.

Apple's advantage is that they design a large share of their own parts, and their partners build them at a very high volume since they are used in more than one product line.

They don't have to pay a margin to so many component vendors in addition to economy of scale gains.

At a lower Neo volumes, they were using already manufactured iPhone Pro chips that were binned due to a bad GPU core, but they reportedly have already blown through that supply.

They also came up with a new process that uses extruded recycled aluminum for the case, which needs much less CNC time to clean up.

I wonder if they're losing money on the actual units to get more people into the ecosystem?