Why No Retina MacBook Airs

There were no MacBook Airs with Retina Display announced today on Apple’s special event.

The reason is pretty clear looking at what Apple had to do to develop the iMac with Retina Display. From Apple’s website;

A more advanced timing controller.

The timing controller, or “TCON,” is the brains of the display — it tells each pixel what to do and when to do it. Because iMac with Retina 5K display has four times as many pixels as the standard 27-inch iMac display, the TCON had to be able to handle more information than ever. But even the most powerful timing controllers available couldn’t manage this number of pixels, so we had to create a new one with four times the bandwidth of the previous-generation 27-inch iMac — up to 40 Gbps. Now a single supercharged chip beautifully orchestrates the symphony of all 14.7 million pixels.

To develop Retina Display hardware that has at least comparable performance to their non-retina products, Apple has to develop new hardware down to the semiconductor level. This hardware has to have processing power that is multiple times faster than previously available.

This takes time and effort. And as is obvious from the use cases, the iMac has much higher priority for Retina Displays than the MacBook Air.

For a bit more information on how pixel-density can adversely affect performance, here’s an article describing the poor performance of brand new Android devices with high-res screens.

“Adreno-powered Nexus 6, Galaxy Note 4 deliver poor graphics performance vs. iPhone 6 Plus”

Some Chromebooks have high-res displays but they have it easy. Nobody expects high-end graphics performance from Chromebooks, and there are no apps that take advantage of the performance even if it existed.

Are Chromebooks Losing Market Share in the Sub-$300 Notebook Segment?

Yesterday I wrote about an NPD report that came out for back-to-school PC sales in 2014.

In that report, Chromebook sales were reported to account for 18 percent of all sales of notebooks under $300.

This sounds like good news if you don’t remember what NPD was telling us a year ago. Stephen Baker, NPD’s Vice President of Industry Analysis for Consumer Technology, said the following;

In the last eight months Chromebooks have snagged 20 percent to 25 percent of the U.S. market for laptops that cost less than $300.

If Chromebooks sales have truly fallen from 20-25% market share to 18% market share in the sub-$300 laptop segment, that’s pretty bad news for them. Not that it’s particularly good news for Microsoft either.

Back-to-School PC Sales 2014

NPD published their report for US consumer retail PC sales during the 10 week back-to-school period yesterday.

スクリーンショット 2014 09 25 8 07 49

U.S. consumer retail PC sales grew almost 3 percent during the 10 week Back-to-School period (week of July 4th through Labor Day week) after declining by 2.5 percent in the previous year.

So it seems like PC sales aren’t falling too badly and have actually risen a bit. Mac sales are continuing to be quite strong. Chrome OS has made some gains but not nearly as impressive as compared to 2012-13.

As I have repeatedly said in this blog, what I find interesting is how Microsoft is retaliating to Chromebooks.

Chromebook sales were up 32 percent in 2014 and accounted for more than 5 percent of notebook sales, and 18 percent of all sales of notebooks under $300. Windows notebook ASPs fell over the last three weeks to just $441, which was 8 percent lower than last year, but the price cuts lifted units by 4 percent. Entry-level Windows Notebooks priced under $300 increased by 37 percent as prices dropped from $271 to $242. 2-in-One Windows devices accounted for 13 percent of Windows sales as volume increased 6x over 2013.

What we see is that low-cost Windows notebooks that are price-competitive with Chromebooks are increasing sales in line with the rise in Chromebook sales (37 percent vs. 32 percent). Hence it appears that although Chromebooks sales are up 32 percent, the market share of Chromebooks within the notebooks-under-$300 segment is not increasing. What is happening is that the notebooks-under-$300 segment expanded 30%, and both Chrome OS and Windows machines increased their sales at the same rate within this segment.

Simply put, Chromebooks are not gaining market share relative to Windows notebooks in the sub-$300 segment. What’s happening is that the sub-$300 segment is rising 30%.

Within this segment, Chromebooks have 18% market share whereas Windows has the remainder. To eventually win over Windows, Chromebooks has to be growing much more rapidly. The possibility that Chromebook share is not rising at all in this segment is a huge red flag.

Looking at the big picture, Microsoft has simply made the typical response that an incumbent would make when faced with low-end disruption. Microsoft’s software business is very much fixed-cost, and hence they tend to fiercely guard market share at the expense of margins. They have also made similar responses in the past.

Nothing new here, but still interesting to see this play out according to theory.