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MacBook Air parts suppliers doubtful about profit growth from new release

Apple's control over materials procurement is allegedly causing suppliers to expect little upside from this week's arrival of a long-awaited MacBook Air redesign.

The 2018 MacBook Air.

The 2018 MacBook Air.


Apple assumed material procurement rights from related supply partners in mid-2018, DigiTimes said on Thursday, citing supply chain sources. Under such an arrangement, Apple orders the materials for its partners, meaning the latter have no say in quality or where they come from, and can't charge anything extra.

Suppliers are now only earning contract production fees, hurting profitability, DigiTimes said. "Massive" Apple orders may nevertheless be required to maximize capacity.

The problem in that regard may be that MacBook Air shipments reportedly came in under 19 million units in 2017 versus a peak of over 20 million in 2015. Simply beating 2017 numbers could be difficult, the DigiTimes sources argued.

The 2018 MacBook Air starts at $1,199, much higher than a previous $999. It does include a variety of sought-after improvements though, such as a Retina display, Touch ID, eighth-generation Intel Core i5 processors, and dual Thunderbolt 3/USB-C ports.

Apple infamously let the Air line stagnate for years, preferring to focus on the 12-inch MacBook, the MacBook Pro, and the iPad Pro. This is despite the Air often being a fan favorite for its combination of price and reasonable performance.

DigiTimes is a notoriously poor source for Apple's specific plans. However, it does have solid information from the supply chain —and Apple's product production requirements are well documented.