Chapter 1: What new products has Apple announced recently?
Apple has new hardware and may have a hit on its hands. Motley Fool Money starts now. Welcome to Motley Fool Money with the Hidden Gems team. I'm Travis Hoyum, joined today by Rachel Warren and Lou Whiteman. And guys, Apple is in the news again. These announcements aren't quite as exciting as they were 15 years ago, but I did think that this new product announcements over the last couple of days
We're kind of meaningful because this is some new products that could be compelling, and we're in this new world of AI. So, Rachel, let's start with you. We have new MacBook Pros. We have new monitors. We have a new MacBook Neo, including Airs. I don't know if we need both of those things. What did you take away from all these new products announcement? Do any of them move the needle for Apple?
I think it does. So the MacBook Neo, I do think, is actually a bit of a shift in Apple's strategy. The idea here is to directly challenge Windows PCs and Chromebooks in that more budget-conscious consumer as well as education sector. So it's $599 for the MacBook Neo, $499 for education clients. It's Apple's most affordable laptop ever.
It's about $400 less than the prior generation of MacBook Airs. It's the first Mac to run an iPhone class chip. which is the A18 Pro. It delivers up to 16 hours of battery life. It's capable of on-device AI tasks. That's pretty cool. The MacBook Air, I think, still has a very clear place in the lineup. It's obviously a higher price than the Neo.
Nearly double the price, even just for the lower-end model. It is. Well, and that's what's interesting. So Apple has strategically differentiated the prices here to try to avoid total cannibalization. You also see that they actually increased the starting price of the new MacBook Air by $100 to $1,099.
And the MacBook Air recently was updated with the M5 chip, so you've got much higher CPU and GPU scores. I think this is an interesting move. I mean, the Air is really the mainstream choice if you're a user that needs significant RAM, longer battery life. But then the Neo, Apple's trying to target segments that they maybe had previously ceded to competitors like Alphabet and Microsoft.
So I think you look, I mean, these entry-tier devices, they're designed to capture millions of iPhone users who maybe have never owned a Mac and maybe they're more budget conscious. And so I do think that there's something to be said for this. It's so on brand for them to announce a Chromebook killer that is 3X more expensive than a lower Chromebook.
Do you think that's really the market that they're going after? The Chromebook is such an underpowered product. My kids use it at school. When I saw the Neo, what was exciting for me was, this is the first Apple product that I could see. We could actually buy this for the kids, and it wouldn't completely break the bank, or giving them a seven-year-old PC like we have that ultimately breaks.
It fits a nice category for consumers. Maybe you're right that it doesn't fit in for schools. I don't think it does, period. Look, Chromebooks right now have 80% market share in the K-8 market. Really, I challenge you to go try and get most school systems to change anything about the way they do business, especially something that's going to be more expensive.
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Chapter 2: How does the MacBook Neo change Apple's strategy?
I think they have intentionally stunted this machine. The eight gigs of RAM, I think, matter in terms of you're not really going to get the power users that way, even if they are just using web apps. I don't think this is a problem. But I do think, Travis, to your point, these used to be much more exciting. The stock is up less than 1% today.
No longer is there a visionary on stage in a black turtleneck announcing some brand-new category. We used to talk about Apple cars. We used to talk about Apple TVs. Now, we're talking about Chromebook rivals. And Apple's a great business with install-based, but I don't think anything says more about innovation at Apple 2026 than that. Yeah, we have not heard, at least yet, about the Apple TV.
I'm also looking for a Mac Studio because that's what I would consider buying. Lou, I want to push you on one thing. I'm just looking at the financial numbers. I want to take this a little bit in a financial direction, not just vibes on their products. But a vast majority of Apple's sales from a segment standpoint goes to iPhones. So that's really what you need to protect.
And then services are actually number two at $113 billion over the past year. If you're trying to build a moat around the business, that's it. The Mac, only $33 billion worth of revenue.
If something like the Neo just expands that product, gets you using two Apple products instead of one, maybe you add that computer instead of buying a Chromebook or a different tablet for kids, for example, isn't that enough of a win, even if you're not necessarily setting the world on fire?
What I don't know here, maybe, and I think it can be a win, it's not setting the world on fire, but how much of those incremental sales are people that just otherwise wouldn't have bought something? Or are they at the expense of the iPad or something like that? Yes, there's probably add-on, but if you are basically selling an add-on device to an existing user,
That's, again, nothing wrong with it. And I don't mean to imply that they shouldn't do this, because I don't think it's strong enough to really cannibalize their sales. And you're right, the iPhone is so important.
But again, I think the market has this right, putting the stock up less than 1%, because I think it's just, if any other company did this, if Samsung did this, we wouldn't be talking about it. It's Apple, so we're talking about it. But I do think we're sort of Again, everyone's living in the past, wanting those one more thing days to come back.
And there is no sign that they're coming back anytime soon. Maybe later in the year, we'll see something more incredible. But this is very much just mature company does mature company thing. That's true. The other thing we don't have an answer to yet, but something to keep an eye on as an investor is they did not significantly raise prices on most of their products.
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Chapter 3: What are the implications of the MacBook Neo for budget-conscious consumers?
You know, even the first iPhone, it was Samsung and companies like that that were making huge screens. And Apple was kind of like, ah, we don't want to do that. And suddenly they had to follow suit a few years later. Do you really think that that boils down to a screen that's just a little part of your glasses or something? I'm skeptical about that. I really am.
There are some things that audio is good for. There are some things that visual is good for. I do think here, that AI has potential to help us evolve here. Better voice recognition and better just making that actually work. Maybe we don't need keyboards. There is incremental change. My guess here is the next five years or so in consumer tech are very similar to the last five years,
refinements on existing designs, new complementary devices kind of to supplement, but no huge radical disruption. If anything, you know, I mean, I think there is a threat here, but really what it is is that if AI is everything that they say, does AI become almost the entire device? Does AI become almost everything we interact with? And if so, does operating system matter as much?
And that, I think, that is a real long-term threat. I don't think right now, but I think that is the more just interesting twist here than some new form factor that's going to spring up in the next year or two that puts the iPhone at risk. I think the bigger question is, is that, does that walled garden fall if we use the operating system less.
Yeah, the other question is, are we moving to a world of what you would call thin clients? So where, like you said, the compute is in the cloud, so you don't necessarily need a super powerful computer or mobile device in your hand. You just need something with a good internet connection. So maybe the differentiation point becomes completely different.
Yeah, maybe that does kind of eat away at the operating system. But then again, you have millions of people choosing that operating system, and they've been doing that for a very long time. When we come back, we are going to talk about the future of airline stocks. Now that oil prices are up, you're listening to Motley Fool Money. Welcome back to Motley Fool Money with the Hidden Gems team.
All right, Lou, your favorite airlines. Many of these stocks have been on fire over the past few years, at least relative to historical performance. They've optimized pricing. Valuations are relatively low, single digits. Price earnings multiples in some cases. But now we have skyrocketing oil prices. Oil is up about 15% in the past week.
week as we're recording this conflict in the Middle East could turn us towards a recession. We talked about that yesterday and the potential impact the higher oil and gasoline prices can have on the U.S. economy, which is already in a tenuous spot, especially for the bottom 70% or 80% of consumers.
What is the bear and bull case if you're looking at airline stocks and seeing these and salivating at these low multiples? First of all, it's worth noting that the actual business effect is very small. United is the largest airline to the Middle East, but still, it's less than 2% of their seat miles, the way we do it. For Delta and American, well less than 1%.
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