Apple's New MacBook Air: Where's The Retina?

Jun.11.13 | About: Apple Inc. (AAPL)

I will say upfront that while I am not personally an Apple (NASDAQ:AAPL) user, I have tremendous respect for the software and hardware engineers over at Apple; these folks are best in class, and I believe that the investor chants of "no innovation" must be incredibly disconcerting for the "deep in the trenches" engineers that work hard to make even the most "mundane" aspects of a software or hardware product to hear this about their creation. That being said, when Apple launched its MacBook Air, something didn't quite feel right about it, and I think I have pinpointed the issue - it's the (lack of retina) display.

Where's The Retina Display?

The new MacBook Air 13" and 11" promise 12 and 9 hours of battery life, respectively, as well as the latest-and-greatest Intel (NASDAQ:INTC) "Haswell" processors, which seem to be primarily responsible for this battery life increase. My question, then, is given the beefed up graphics processor and the tremendous power savings, why was a high resolution display not included? Apple has been gung-ho on ultra high resolution displays in its iPad, iMac, and MacBook Pro products, but for some reason, the MacBook Air remains well behind these other Apple products and - more importantly - behind the slew of Microsoft (NASDAQ:MSFT) Windows 8 based Ultrabooks which are now touting rather amazingly high resolution displays.

I believe I have the answer to why Apple is doing things the way that it seems to be.

A MacBook Air With Retina Would Obsolete The rMBP 13"

I penned a piece some months ago titled, "Will Apple Kill The 13" MacBook Pro?," in which I questioned the need for the coexistence of the 13" rMBP and the 13" MBA. It was my view that an updated "Haswell" based 13" MacBook Air with a retina display would completely remove any need for a 13" MacBook Pro for the majority of users, and as a result Apple would merge the two product lines. It seems that Apple is reluctant to do so, and as a result will keep the display resolutions on the MacBook Air designs lower than those in the MacBook Pro in order to keep the Pro relevant.

As an additional point of differentiation, I believe that when the 13" rMBP is refreshed that it will feature the 28W "Haswell" processor with "Iris" graphics, rather than the current 20W "Ivy Bridge" + PCH solution. Max power consumption goes up, but idle power improvements and a smaller board footprint (to allow for a larger battery with no increase in weight/size of the device) will still allow Apple to see battery life improvements in the next generation 13" MacBook Pro.

Higher Resolution Screens Draw More Power

Apple seems to have really focused on performance on this new MacBook Air, since in addition to the latest "Haswell" chip, Apple also included a blazing fast PCIe SSD and faster WiFi. My guess is that since "Haswell" brought dramatic power savings, Apple probably preferred to advertise "all day battery life" rather than take some of the extra battery life headroom and exchange it for a more power hungry 1920x1080 or even 2560x1440 display. I expect Intel's "Broadwell" (14nm shrink/enhancement of "Haswell") will bring about further power savings, and as a result Apple may be able to spend those battery life savings on an even better display.

Conclusion

I believe that Apple is keeping the 13" MacBook Air without a higher resolution display primarily to have another point of differentiation for the 13" MacBook Pro. Whether this turns out to be the optimal strategy going forward, particularly as many of the Windows 8 based "Ultrabooks" will feature very high resolution, touch-enabled displays for similar price points, remains to be seen. For the first time, while I applaud Apple for being first out of the gate with the latest Intel chip platform, I have to wonder if Apple will still be able to position its products as the "highest end available" going forward, at least in the thin and light laptop space. Let me know your views below.

Disclosure: I am long INTC, MSFT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.