New MacBook Air: Will Foxconn’s Wage Increase Affect Consumers?

The new MacBook Air was actually predicted weeks before its unveiling yesterday, and do you know why? Because of the supply chain. Industry trackers noticed that "AppleInsider regularly checks stock levels of Macs with Apple's officially authorized resellers in order to maintain its Mac Price Guide. In its most recent check, it found that Amazon.com, MacConnection, MacMall and J&R had all run out of the 1.83GHz MacBook Air, and at least two were also completely without the 2.13 GHz stock configuration, too," according to this article from early October.

In the unveiling, Steve Jobs stated that this version of the MacBook Air is what would result "if the iPad and a MacBook hooked up." He goes on, "It includes instant on, improved battery life and a flash drive instead of a hard drive. That makes it more durable if it's bumped or dropped. At it's thickest point, it is 0.68 inches, tapering to 0.11 inches. It weighs 2.9 pounds. But it's durable."

Who's manufacturing these marvelous machines? Why, if you guessed Foxconn, you're correct. Following a wage increase in light of worker suicides, the next question for consumers, of course, is "How much will the price increase for me?" Not much, if at all, according to this piece in The Atlantic. Analyst Daniel Tello states that "the falling cost of materials could offset increased manufacturing costs. So definitely no effect for consumers, and probably a net positive for Apple's margins when component cost declines are taken into account."

And if prices do rise, "it won't happen until Apple's second quarter, which runs, roughly, from January through March," analyst Dennis Hildebrand wrote. "Apple will protect the holiday quarter at all costs." All things considered, the new MacBook air is being offered at a respectable $999. We'll see what happens in January, after the holidays.

Spend Matters believes that while component prices will usually face downward price pressure in a typical market, the combination of rising commodity prices, lesser capacity in certain supply markets (and longer lead times) and of course rising labor costs in China could serve to put upward price pressure on the Macbook Air and other Apple products in 2011. Of course, Apple, unlike many other high tech manufactures, has some significant margin to play with so the actual impact they pass through to consumers is very much up to them. As for our office, we're not going to chance it. We actually plan to buy our first Macbook Air in the coming weeks.

Sheena Moore

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