How Retina Display Indeed Brightened Apple’s Profit

When Apple announced MacBook Pro Retina Display at $2199 price point, I wrote this in GigaOm

This clever price discrimination will result in two positive effects on the units sold. One, some who would have settled for a MacBook Air or the 13-inch MacBook Pro will upgrade to the $2,199 MacBook Pro. Two, it will push some who preferred the 15-inch MacBook Pro to the $2,199 version with Retina Display. The net result is a higher ASP than the current $1,245 number. Even if one in ten customers of first category and one in five in the second category upgrade to Retina Display, Apple will see the MacBook ASP (Average Selling Price) go up to $1,363.

Apple announced its Q4 numbers yesterday. Despite its hits and misses with iPhone and iPad there is one bright spot – its portables (MacBook line) did very well. MacBook volume came in at 3.95 million, up 10% YoY and revenue from MacBook revenue came in at $5.363 billion, up 16.9% YoY.

I predicted Apple’s ASP could go up to $1,363. If you the math with the revenue and volume numbers you will find that the ASP came in at $1,356. That is within margin of error.

The net result of increased volume and higher ASP is $297 million in additional revenue which is mostly profit because of incrementally higher margins on higher priced units, meaning Apple is also on track to add $1 billion in profit (full year) as I predicted.

That is one magical product indeed.