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Analyst: Flash memory makes MacBook Air more profitable than bigger laptops

We already know the MacBook Air is thinner than most laptops, but it turns out that the stack of money it makes Apple isn't. An analyst named Brian Marshall of Gleacher & Co. says that the flash memory in the MacBook Air is one of the big places that Apple makes its money on the machine, reportedly costing Apple just $80. According to Marshall, this means the profit margin on the Air is between 28 and 37 percent; that's almost 10 percent higher than Apple's traditional MacBook lines.

According to Andrew Rassweiler of iSuppli, also quoted in the story, Apple is now one of the world's biggest (if not the biggest) consumers of hardware flash memory, and its deals on memory are so good that the more memory in a device it makes, the better profit it will eventually see. Which, of course, is why the latest MacBook Air is so big on flash memory.

Of course, Marshall's analysis doesn't take into consideration marketing or advertising costs, and Apple certainly has a sizeable advertising budget going into its devices. But when you consider pure hardware costs, Apple's positioned its "satellite laptop" to be a very strong product indeed.

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We already know the MacBook Air is thinner than most laptops, but it turns out that the stack of money it makes Apple isn't. An analyst...
 

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tuaw,com

"According to Andrew Rassweiler of iSuppli, also quoted in the story, Apple is now one of the world's biggest (if not the biggest) consumers of hardware flash memory, [...]"

Steve Jobs explicitly said so last week (that they're the world's #1 customer for flash memory). So not exactly a new insight here.

October 26 2010 at 11:13 AM Report abuse rate up rate down Reply
woody

Unless you're an Apple stockholder, how is news about the Apple profit margins anything other than extremely annoying?

October 26 2010 at 10:33 AM Report abuse rate up rate down Reply
2 replies to woody's comment
tuaw,com

Time to become an AAPL stockholder then? ;-)

October 26 2010 at 11:09 AM Report abuse rate up rate down Reply
John

Well, if their margins stay big then they'll have the funds to develop great new products that we all love. Thin margins are a sign that they are on the wrong track.

October 26 2010 at 12:44 PM Report abuse rate up rate down Reply
David Frantz

Frankly this is a big problem with Apple, they price Flash memory way to high. It doesn't matter if ot is an iPod, Mac Book or an iPad, Apple really sticks it to the customer for each incremental increase in flash. It is extremely obvious but yet geys little focus in the Mac Press.

Maybe TUAW ought to take a closer look. Just look at the price increase on the iPad for the very marginal imcremental increase in flash. It is pretty stunning when you think about it.

October 26 2010 at 9:59 AM Report abuse rate up rate down Reply
1 reply to David Frantz's comment
mabhatter

You're kidding right?

This was the whole point of Apple dropping $500 Million UP FRONT on long term contracts last year, in the middle of the crunch. Apple put up money to build FAB when everybody else was trying to save a buck. It comes down to Apple having the market tied up, why would Apple charge any less than what other companies have to pay? Or what the market would bear? All these analysts are discounting the role Apple's huge bankroll gets them... they can afford cash up front for new capacity, they can pay their bills in CASH and don't have problems with credit or cashflow..... they're highly demanding, but if they are your customer they are also nearly a "sure thing".

October 26 2010 at 1:37 PM Report abuse rate up rate down Reply
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