iPad or MacBook Neo? Comparing Apple’s three $600 computers

Market structure: Apple embedding three sub-$600 SKUs tightens its defensive moat at the entry price point — winners are AAPL, TSM (TSMC) and accessory/AppleCare revenue pools; losers are low‑end Windows OEMs (HPQ, DELL) and Android tablet makers who compete on price. Pricing power shifts toward Apple because it controls silicon and margins; expect modest share re‑allocation (2–5% unit share gain in education/consumer tiers over 12 months) rather than a volume tidal wave. Cross-asset: AAPL equity should see modest positive bias; implied volatility likely compresses into the next earnings window; TSM exposure benefits semiconductors; little direct commodity impact aside from seasonal NAND/DRAM orders (MU beneficiaries).

Risk assessment: Tail risks include antitrust remedies or forced OS-level changes (low probability, high impact within 12–24 months), supply shocks at TSMC (medium probability, near-term) and a China demand slump that could create inventory write‑downs in 1–2 quarters. Hidden dependencies: accessory attach rate (Magic Keyboard, Pencil) and services conversion drive much of margin upside — a 5–10% variance in attach rates implies +/-$0.05–0.15 EPS swing over 12 months. Key catalysts: holiday sell‑through (Nov–Dec), Apple’s next fiscal results (~3 months) and China macro releases.

Trade implications: Tactical long AAPL exposure (equity or 3–6 month call spreads) to capture holiday uplift, paired with selective short positions in HPQ or LNVGY to express device-share shift. Buy TSM for supplier upside; size modestly (1–3% portfolio) and trim on +15% or after two fiscal quarters. Options: implement 3‑month AAPL 5% OTM call spreads to limit theta decay; consider buying puts on HPQ 3–6 month to express downside.

Contrarian angles: Consensus underestimates accessory and services follow‑on revenue — a 10% attach improvement could lift FY margins more than street models expect. Conversely, the market may underprice cannibalization of Mac mini ASPs if buyers shift to iPad Air for productivity, pressuring Mac revenue by ~2–4% next two quarters. Historical parallel: early iPad launches depressed Mac units but expanded overall ecosystem revenue over years; if returns or warranty costs rise materially, margin upside could be delayed.