First time using iPhone chip! Apple plans to launch a

# Source: Wall Street Insights

By Zhao Ying

Despite its lower memory configuration, the budget MacBook is unlikely to see a noticeable hit to its operational smoothness and will also support Apple Intelligence, expected to keep it competitive in the entry-level segment. Industry insiders revealed that Apple projects annual shipments of this product to reach 5 to 8 million units, accounting for approximately 20% to 30% of last year's total Mac sales.

Apple plans to launch its first entry-level MacBook, which will feature an iPhone-grade processor for the first time and could be priced below $799. The device will only come with 8GB of RAM, half the 16GB configuration of the existing MacBook Air and MacBook Pro models, but the reduction is not expected to significantly impact its running smoothness. It will also support Apple's AI assistant, Apple Intelligence.

On Thursday, Mirror Daily cited insiders as reporting that Apple is highly confident about the sales prospects of this first low-priced entry-level laptop. Industry sources stated that the tech giant forecasts annual shipments of the device to hit 5 to 8 million units, making up about 20% to 30% of Mac's total sales volume last year.

In terms of the supply chain, Quanta Computer will secure more than half of the orders, with Foxconn, Apple's long-standing manufacturing partner, taking on the rest. Despite rising memory prices, Apple has signed new DRAM and NAND supply agreements with memory manufacturers including Samsung Electronics, SK Hynix and Kioxia, which is expected to guarantee supplies at least through the first half of 2026.

This product strategy underscores Apple's ability to offset cost pressures through its high-margin services business and in-house chip development, opening up new growth avenues for the company in the fiercely competitive entry-level laptop market.

## Drastic Memory Cutback, Hardware-Software Integration as the Key

The 8GB RAM on this entry-level MacBook is only half that of Apple's current models, but the company leverages a highly integrated design to enable more efficient and flexible memory usage. By contrast, Wintel laptops running on Windows software and Intel hardware adopt an open architecture, with the operating system and hardware coming from different suppliers. This limits the level of hardware-software integration and necessitates additional redundant memory space, according to reports.

Insiders said that despite the lower memory configuration, the device's operational smoothness is unlikely to be significantly affected. It will also support Apple Intelligence, helping it maintain competitiveness in the entry-level product category.

## Supply Chain Layout to Counter Rising Memory Prices

On the supply side, insiders disclosed that Apple has inked new DRAM and NAND supply deals with memory makers including Samsung Electronics, SK Hynix and Kioxia. These contracts are expected to ensure a steady supply at least until the first half of 2026. With supply issues largely resolved, reports noted that the impact of surging memory prices on Apple's financial performance is likely to be relatively limited.

In manufacturing, Quanta Computer will get more than half of the assembly orders, with Foxconn handling the remainder. This order allocation reflects Apple's balanced strategy in supply chain management.

## Services Business and In-House Chips Offset Cost Pressures

Reports indicated that the impact of rising memory costs on Apple is likely to be muted, thanks to the continuous expansion of the company's high-margin services business. Encompassing iCloud, Apple Pay, Apple Music, Apple TV+ and the App Store, this business boasts a gross profit margin of 70% to 80%. It accounted for 26.2% of Apple's total revenue in fiscal 2025, up from 24.5% in fiscal 2024, 22.2% in fiscal 2023 and 19.8% in fiscal 2022. The growing profitability of this segment provides a buffer against memory price pressures.

Furthermore, reports stated that aside from memory, Apple designs all other key chips in-house, including the M-series processors for laptops, A-series chips for iPhones, S-series Bluetooth chips and C-series 5G modem chips. The company deploys these chips at a sufficiently large scale to achieve economies of scale, resulting in significant cost savings. The entry-level MacBook will feature an iPhone-grade processor for the first time, further embodying Apple's strategy of cutting costs through chip reuse.

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