Apple, Inc.'s New MacBook Positioning Is Perfect

By Markets Fool.com

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Image source: Apple.

Every year, Apple introduces the best <insert product name here> that it's "ever made." The company uses this hyperbolic language in order to convey a sense of progression, which in turn justifies paying a premium for the latest and greatest that Apple has to offer.

Before the media event earlier this week, Apple had consolidated its notebook portfolio to the MacBook Air and MacBook Pro, but the company has now brought back the MacBook lineup -- and it's positioned perfectly.

The old switcheroo
Not long ago, the MacBook was positioned as the entry-level consumer notebook. The MacBook Air occupied the mid-range price points, while the high-end MacBook Pro naturally appealed to professionals who demanded greater performance.

But as Apple embarked upon its transition toward high-resolution Retina displays -- an admittedly long and arduous process given the engineering complexities -- something happened. The MacBook Air stopped being competitive in terms of its specifications.

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Image source: Apple.

While rival PC OEMs were embracing higher quality display panels, the MacBook Air started to look a little long in the tooth due to the lower quality TN panel inside. Yet Apple couldn't simply toss a Retina display in and call it a day. Instead, Apple continued dropping the price of the MacBook Air, which has now become its entry-level consumer notebook and starts at $899.

That's why the new MacBook fits right in. It will become the mid-range MacBook, and the higher price point relative to the MacBook Air will be justified by the newer design and the Retina display. In terms of sheer performance, the Intel Core M isn't more powerful than what's currently found in MacBook Airs, which is why the new MacBook must justify its premium price in other areas, such as the display, fanless design, and silent operation.

Apple has effectively switched the positioning of the MacBook and MacBook Air.

Keep on keepin' on
While the Mac business has declined in relative importance as the iPhone business soared, it still remains an important part of Apple's legacy. On a trailing-12-month basis, the Mac comprises 12% of sales, just a hair shy of the iPad's 14%. Under traditional resource allocation models, that would typically dictate that Apple spend more on developing iPads than Macs, but Apple has never bought in to traditional resource allocation models.

Meanwhile, Apple is distancing the new MacBook from the iPad. The iPad Air and Air 2 have a 9.7-inch display, which is a little too close to the 11.6-inch MacBook Air for comfort. This is before even considering the rumored iPad Pro that everyone's been talking about, which may similarly feature a 12-inch display. Now, Apple can confidently sell a flagship iPad Air 2 and new 12-inch MacBook without as much overlap in the value proposition.

To be fair, Apple deserves some credit where it's due: this is the strongest MacBook lineup it's ever had.

The article Apple, Inc.'s New MacBook Positioning Is Perfect originally appeared on Fool.com.

Evan Niu, CFA owns shares of Apple. The Motley Fool recommends Apple and Intel. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.