Apple prepares to enter low-cost laptop market for first time

Apple held about nine per cent of the global PC market in the third quarter, ranking fourth in the industry, trailing Lenovo Group Ltd., HP and Dell — all of which sell Windows or ChromeOS devices. Photo by CHRIS TUITE/AFP via Getty Images/Postmedia files

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The new device — designed for students, businesses and casual users — will target people who primarily browse the web, work on documents or conduct light media editing, according to people familiar with the matter. Apple is also targeting would-be iPad buyers who might prefer a traditional laptop experience instead.

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Code-named J700, the machine is currently in active testing at Apple and in early production with overseas suppliers. The Cupertino, California-based company plans to launch it in the first half of next year, said the people, who asked not to be identified because the product hasn’t been announced.

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An Apple spokesperson declined to comment.

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The move would represent a strategic shift for Apple, which has historically focused on premium devices with hefty profit margins. The company also has vowed not to chase market share with lower-end offerings.

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But Apple is facing a growing threat from Chromebooks, the low-cost laptops that run Google’s operating system, Chrome OS. There’s also a potential opportunity to entice Windows customers. Microsoft Corp.’s shift to Windows 11 has rankled some users of the previous-generation software and left them without security updates.

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Shares of personal computer maker HP Inc. briefly dipped to a session low on the news. The stock and that of fellow PC maker Dell Technologies Inc. were both down about two per cent as of 12:03 p.m. in New York. Apple gained less than one per cent to US$270.25.

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Apple plans to sell the new machine for well under US$1,000 by using less-advanced components. The laptop will rely on an iPhone processor and a lower-end LCD display. The screen will also be the smallest of any current Mac, coming in at slightly below the 13.6-inch one used in the MacBook Air.

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This would mark the first time that Apple has used an iPhone processor in a Mac, rather than a chip designed specifically for a computer. But internal tests have shown that the smartphone chip can perform better than the Mac-optimized M1 used in laptops as recently as a few years ago.

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Apple has long used iPhone chips to power the iPad but shifted those devices to its M-series processors for higher-end models a few years ago.

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The company has previously experimented with the market by selling a discounted M1 MacBook Air for under $700 through Walmart Inc. and other retailers. But the upcoming model will be an entirely new design, rather than a discounted older machine.

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Apple’s cheapest Mac currently is the US$999 M4 MacBook Air — a price that can drop to US$899 with educational discounts. Chromebooks, meanwhile, sell for as little as a few hundred dollars, with premium versions reaching about US$600.