The iPhone may be Apple Inc.’s (NASDAQ: AAPL) primary revenue driver and Services the rising star, but Mac sales are still the third largest source of Apple revenue.
Yes, Macs are popular and remain an important factor in AAPL stock valuation. But it looks like a key release that has been expected for this year has been delayed. Word is that the new MacBook Air — which was expected as early as WWDC 2018 in June — has been delayed, with suppliers being told Apple won’t start taking shipments of the new laptop until Q3 2018.
That’s left Apple suppliers scrambling and begs the question: how difficult can it be to update a laptop that’s had the same display since 2010 and is powered by a 5th generation Intel Corporation (NASDAQ:INTC) CPU from 2015?
Report: New MacBook Air Delayed
DigiTimes reports that supply chain sources have been told by Apple that volume production of the new MacBook Air has been delayed until the second half of 2018. The company would not begin to take shipments of the laptop until Q3 2018, which makes an October release the most likely timeframe.
That move is causing problems for suppliers who have an inventory of the materials needed to produce the laptop. They are faced with lower than expected utilization of their production lines during the time that had been slotted for the new MacBook Air, and the prospect of competing for production workers in the second half of the year — when Apple traditionally ramps up iPhone production.
Why Push the Laptop Release to Q3?
While the laptop itself is a rumor (Apple has never confirmed that it is building a new MacBook Air and, in fact, killed the 11-inch version of the laptop several years ago) there have been many reports of the new device from multiple sources. Where there’s smoke, there’s fire. Apple’s laptop has been strongly anticipated to be a star unveiling at June’s WWDC 2018 event.
So why the delay? The new MacBook Air would remain Apple’s entry-level laptop and it’s been estimated that the long-awaited refresh could boost Apple revenue from Mac sales by 10% in 2018. Obviously, that would be good for AAPL stock.
With an ancient display and CPU, and an existing keyboard and ports situation that most users are happy with, the company wouldn’t need to go to extremes to make it a much better and more competitive laptop. It’s not like any Mac laptop buyer is expecting a 4K display and octa-core CPU on a new MacBook Air.
Yet DigiTimes reports that some of Apple’s manufacturing partners are speculating the delay is because of a component shortage. The company may be waiting for volume availability of Intel’s 8th generation CPUs instead of going with the 7th generation.
Others suggest Apple has changed its release strategy based on market conditions. Perhaps the company feels the timing isn’t right for a new MacBook Air announcement in June and will instead ride on the new iPhone launch in September for maximum punch — and to drive a back-to-school rush.
A new MacBook Air in the fall might also help to give Apple revenue for the quarter a boost just in case the new iPhones follow up the iPhone X with lower than expected sales, helping to protect AAPL stock from taking a hit. Whatever the reason behind the delay, it looks like we probably won’t be seeing a new MacBook Air at WWDC 2018.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.