Will the 11-inch MacBook Air cut into iPad sales?


Will Apple's just-announced 11-inch MacBook Air cut into sales of iPad? Many people own a Windows or Mac PC and a smartphone (iPhone if you're on TiPb, right?) and it was a tough job for Apple to convince anyone but frequent flyer execs to plunk down the cash needed for a secondary computer like the original MacBook Air. Arguably, they failed and it remained a niche if premium product. Apple tried again with iPad. Instead of trimming down the Mac they went IMAX on the iPhone. While it remains to be seen how successful they'll be in the long term, inarguably they've achieved a good level of success with it so far.

With the new MacBook Air, however, especially with the 11-inch model, Apple is butting their Mac OS X line into fairly close competition with their iOS line and iPad. Where before the gap between a $500 iPad and a $1500 MacBook Air came down mostly to cost vs. keyboard, iOS vs. Mac OS X, now for twice the starting price of the iPad you can get a Mac that's almost as portable and a lot more functional.

iPad still has the edge in ease of use (though Mac OS X 10.7 Lion starts to change that) and battery life, the new MacBook Air matches its instant on. Now some thought iPad could never compete in a netbook world and it's doing very well. But iPad is a fantastic value, with incredible build quality and premium materials that really does a few things well. By contrast most netbooks are cramped, underpowered, cheaply constructed, and aren't really optimized for anything. MacBook Air is a Core 2 Duo with unibody aluminum chassis, a full sized keyboard, and an almost full sized, multi-touch trackpad. And it can run Adobe CS5. Well.

(Also, Apple aficionados wouldn't have gone near a netbook but they'll jump all over the newer, cheaper MacBook Air.)

Apple now has two contenders between smartphone and main machine, one more like the iPhone, the other a Mac. Price is still a factor as is priorities, but it feels like now there's a choice for that spot in the lineup where before it was iPad's alone.

Anyone think iPad should be worried?

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Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Reader comments

Will the 11-inch MacBook Air cut into iPad sales?


Not really. I'm a student at a large state university and I see tons of people w/iPhones and either a Macbook/Pro or Windows machine of some sort. I see a few w/iPads but they don't have a laptop w/them either. So just from my personal experience, people choose either a laptop or iPad and this could definitely persuade them to choose a MBA instead of iPad. Either way, good for Apple. They will get more customers because of this, not less. Also, I think the new Air is awesome but still a bit expensive to REALLY take off. To get 256GB, which is really how much I would need, it would have to be a 13" and ridiculously expensive.

Where's the 3G slot, I can not understand them omitting it, Fatal sales floor this time & theirs no excuses. I would buy one if it had 3G.

First - apple makes money either way ... plus u pretty much need a computer to sync ur iPad ... Unless it's ur rookies computer, hard to sync and update without a per-c of some kind and yea, apple wins - u either buy an iPad and then halo effect sets in or u buy an air.

Re: "Many people own a Windows or Mac PC and a smartphone (iPhone if you’re on TiPb, right?) ..."
Wrong, oh i-centric one! ;-p
Palm Pre + iPad, for me.

Apple doesn't do anything randomly, and pretty soon we will see a smaller (7in) iPad that will replace the current one. With that thought in mind, we will see how the company cleverly covered all ranges of sight with their products: from the tiny (iPhone/iPod) to the small (iPad) to medium (MacBook Air 11in/13in) to normal (MacBook 15in/17in) to bigger settings (iMacs). I bet in the first half of 2011 Apple will ditch the MacBook (white unit) and the 13in Macbook Pro in favor of the new Airs. If you still want a regular laptop, your choice will be the Pros 15in and 17in -there is no way to make those laptops as tiny as the Airs at least for the time being.

Apple would be ecstatic if the MBA 11.6" cut into iPad sales. MBA 11.6" average profit: ~$385. iPad average profit: ~$228. However, Apple will probably sell 250k MBA units per quarter. iPad units? >4m. So, it really really doesn't matter. (Profit here is estimated by taking 35% margin times ASP).
Actually it is kind of mystifying why Apple would sell the MBA from $1000 to $1800 while the MB and MBP 13.3 sell from $1000 to >$1800. The two laptops lines overlap. What's the benefit to Apple here? Revenue and profit per unit will be the same whether it is the MBA or the MBP. The customer base for people who'd want an ultra-light has to be smaller than for the more conventional MB/MBP.
And Apple's MB/MBP are quite svelte machines for their class. They are nice machines to hold and handle. It's as if Apple strategy here is to have a 4 to 6 month trial period to see if the MBA can be as popular as the MB/MBP 13 machines. If they have comparable sales, certainly if the MBA outsells the MB/MBP 13, then this will lead Apple to drop the MB and MBP 13 from the lineup all together. Apple probably sells 1 to 1.5 MB/MBP 13 machines.

I think they are still different markets. MacBook Air vs. iPad basically boils down to two choices in three different areas.

  1. Cost, which is very good for the MBA but still not in the same ballpark as the iPad.
  2. iOS vs. OS X (Lion, which incorporating elements of iOS will still be a very different experience).
  3. Keyboard. I love not having to deal with a physical keyboard on the iPad. But when I want a physical keyboard, I could see myself enjoying using a new MBA,

So I think they represent still very distinctly different markets, even if they are somewhat closer now than they were a week ago.

True, no 7in iPad coming up. Thanks to Anthony for pointing that out! But still, Apple conveys the same purpose with the 9in iPad for the small/mid-sized gadgets. Apple products complement, not compete against, each other.

I'm only gonna buy products made by Jimi from now on. If Steve Jobs is a dumbass, Jimi must have some great stuff for sale. :lol:

I would probably have to answer this as a "yes".
I am an iOS developer and have already sold one of my iPads and only have one left sitting around to do testing on. At the end of the day, it is just to darn heavy for sustained use. Be it ebook reading (iPad 1.5 pounds, Kindle 8 ounces) or watching a netflix moving or whatever. The only thing I really enjoyed having an iPad for was checking my email while sitting in my bed in the morning.
That said/explained, I pretty much plan on putting the $800 bucks I invested into the iPad I have sold into the new 11 inch Air. For just a couple hundred bucks more I feel that the value-versus-usability are going to be completely justifiable.

I have to admit, I'm strongly considering selling my 64 GB iPad 3G and picking up the $999 MacBook Air. I could probably get $900 for the iPad and accessories on eBay, which would cover most of the cost. Very tempting.

Seems Tim Cook largely agrees with the other commenters:
"In a conversation after the announcement, Mr. Cook said he was unconcerned by that risk. 'If one cannibalizes the other, then so be it,' he said. He said it was better for Apple to cannibalize its own business than for another company to do so."
Though the question asked was "will it cut into iPad sales" the answer has got to be, at least in Apple's view, "who the heck cares? We win either way." I'm inclined to agree. More users is more users. Apple is pretty clearly after market share, even at the expense of profit margins on individual product sales. And since SOOO much of Apple's money comes from app sales, the introduction of the App Store on OS X means they'll be able to count on those sales regardless of which type of hardware the consumer decides on.

It's another case of "they almost got it right". I'd actually consider the MBA at those prices, especially the 11", if they had built it on Arrandale ULVs instead of the dated Core 2 ULVs.

Starting at half the price, I don't think the iPad needs to worry. Besides they are not really targeted towards the same group of consumers.

Honestly, if had the money to downsize. I really would get the new Macbook Air. Before, I thought that I couldn't use that as my "main machine" for a few reasons. No CD Drive, No Ethernet Port, Not Enough CPU Power, etc. Ya know, all the things that I got the 13-inch Aluminum Macbook for. However, it really does fit my lifestyle/wants. I'm always on the go, it's light, thin, plus it has great battery life. I would get the 11-inch 128GB flash drive @ 1.6 GHz w/ 6GB of RAM. All my music, movies, etc are digital. So the extra $79 for the DiscDrive wouldn't be a big deal to me. I would only use it every blue moon. I haven't used a ethernet port in about 5 years, and I honestly don't use my Macbook to the full extent like those around me. I just download music, type papers, watch movies, surf the internet. But I love the Mac ecosystem. Oh well, maybe I can sell my MacBook, and save to make up the difference. It's like I have a BMW but al I need is a nice Honda...Ya know...

It may do this. The lines differentiating a mobile device from a desktop/laptop form factor are graying. But this is all part of the overall plan to combine the os into one in OS 11. For instance, that mission control we got demoed in the keynote is going to be the new UI motif in iOS5.

Interesting question since I recently bought an iPad that the entire family loves to use. So I ask myself.... self would I have bought the new Macbook Air instead. The answer is yes... until I realized that I could not get my corporate email on a Macbook Air because my company does not support this platform. However the iPad uses Exchange ActiveSync just like the iPhone so HQ has no way to stop me from accessing email on the iPad. This is a big deal because I want to travel with the iPad and leave the laptop at home.
Before you suggest Outlook Web Access... i thought of that too. Unfortunately my company restricts this to aonly users that are on their network which means that I need VPN support on the Macbook Air. I'm sure it's available... but that's not going to be a great email experience while traveling.

The price, and lack of features is the killer for me. Top end price $1500.00. Might as well get a laptop. At the low end, I would wait for the ipad2Gen, and just get a Bluetooth keyboard. I am sure it's a great product, but out selling the iPad going to be hard with the price tag.

I agree with the above.
I also didn't want the iPad because as a person who owns both a iMac and a iPhone and is interested in the Macbooks, the new Air is the PERFECT medium. The iPad seems to come short of my needs. I always hoped for a cheaper Air. The 11 inch size is also a perfect match. It's bigger than the iPad yet smaller than the cheapest Macbook.

sure for some people but the real question is dose it matter all the money goes to Apple and Apple really only cares about profite.

Then again, that ipad sale feeds the itunes monster, opens the door for iphone purchase, will tend to upgrade, etc. It's also important to remember that person will still need a computer as the ipad isn't a PC or Mac.
That mac air sale doesn't add (as much)..yet. A person could get by with just that.

I really don't think so, personally I believe it's two different markets. I do quite a bit of spreadsheet work with my iPad via numbers and I use pages a lot too. I have iWork 09 on my MacBook but I prefer the user experience on the iPad. With iOS 4.2 coming next month the iPad will have extended features that will make it more useful for business. And with future software upgrades I imagine Steve will be adding plenty of features we will wonder how we ever lived without. The MBA will appeal to the user that needs just a fee more features than the iPad has like audio and video editing software but an iLife suite for iPad would take care of that.

The simple answer is no, the main selling point on the iPad that the new Macbook Air doesn't have is the touchscreen interface, THIS is what makes the iPad a joy to use, the interactivity on the device is like no other at this size and price.

I own an iPad and I wish I had the Macbook Air instead. The iPad is great but I always feel locked down. It's things like not being able to download a file from Safari onto a flash drive that make me never think of it as more than a toy.
I think if the iPad had at least some sort of file system that all apps could read/write to and Safari wasn't gimped, then it may be more of a Macbook competitor. But I'm sure thats the way Apple likes it.