Apple

Why Apple is moving into the lower-cost smartphone and laptop markets

The luxury tech maker is heading down-market.

3/6/26 11:11AM

This week, Apple unveiled a lower-end iPhone and MacBook, each starting at $599. The move signals an effort by a company known for premium devices to push deeper into price-sensitive markets, where it has historically lagged.

“Apple lost basically a generation of customers to Google Chromebook, and think they need to get that back,” said Michael Levin of Consumer Intelligence Research Partners, which has followed Apple for years. “Recall, Apple used to dominate the educational market, which for many years created loyal customers for decades thereafter. That’s why we see Mac computers in wide use among adults and businesspeople relative to life 30+ years ago, when it was a little more of a novelty. So, a low price point today with features that appeal more to younger folks would help with that effort.”

Meanwhile, global smartphone shipments are headed for their steepest drop on record, pressured by rising component costs that are pushing up prices. Android manufacturers, which rely more heavily on lower-income consumers and operate on thinner margins, are especially exposed.

That dynamic could play to Apple’s advantage.

As The Wall Street Journal wrote, Apple’s scale gives it unusual leverage over its supply chain. And with industry-leading margins, it can afford to hold prices steady even while adding value. The new iPhone 17e costs the same as last year’s 16e but offers double the storage, while the Neo is Apple’s cheapest MacBook yet. Apple can also absorb margin pressure at the low end and make up for it elsewhere in its lineup.

Apple’s laptop and desktop lineup is “still heavily dependent on North America and Europe, as well as developed markets in Asia,” according to Jay Chou, a research manager at IDC.

“The MacBook Neo could provide opportunities to grow beyond developed markets and into the hands of budget-conscious buyers more broadly.

The company already dominates in its strongest markets. Last quarter, Apple held 69% of smartphone market share in US, Counterpoint Research found, though its global share was closer to 25%. That suggests there may be room to grow internationally — especially among consumers who want an iPhone but balk at flagship prices.

The demand is visible in the secondary market: Apple accounts for more than half of global used and refurbished smartphone sales. In other words, many consumers want iPhones; they just don’t want — or can’t afford — to buy them new.

As new smartphone sales decline this year, Counterpoint expects used device sales — and used Apple sales — to rise by just as much.

If consumers upgrade, Apple wins. If they trade down, Apple may still win.

Jon Keegan11h

FT: Meta considering “tens of billions” in new capital to fund AI

Just days after Google announced a monster $85 billion upsized equity raise, the extremely profitable Meta is seeking to sell “tens of billions of dollars” in stock, according to a new report from the Financial Times.

Meta is planning on spending between $125 billion and $145 billion on AI capital expenditure this year alone.

Shares dropped more than 5% on the news.

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Meta is supercharging its subscription businesses

The free-app giant never really cared about recurring revenue. Now, it’s launching paid plans for all sorts of stuff.

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FT: Anthropic staff helping the NSA use Mythos for offensive cyberattacks

Anthropic’s Mythos AI model was deemed too dangerous to release to the public, with the company citing its ability to orchestrate novel cyberattacks.

And that’s just what the National Security Agency is doing, with the help of Anthropic staff embedded at the agency, according to a report from the Financial Times.

Only a small number of companies and US allies have been given access to the advanced model, which means America’s adversaries have not had the chance to shore up their defenses against the AI model’s new offensive capabilities.

The arrangement is especially unusual as the Pentagon has deemed Anthropic’s AI a national security supply chain risk — effectively blacklisting it for defense work — in response to the company’s refusal to allow its technology to be used for any legal application, which could include autonomous killing or mass surveillance. Anthropic is currently suing the US government to fight the determination.

US National Security Agency using Anthropic’s Mythos for cyber attacks

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Longtime Tesla bear JPMorgan upgraded Tesla and raised its price target to $475 from $145

For more than a decade, JPMorgan was Wall Street’s most stubborn Tesla skeptic, anchored by auto analyst Ryan Brinkman’s strict focus on traditional car fundamentals and near-term delivery numbers.

But JPM recently handed coverage of the stock to a new analyst, Rajat Gupta, who is throwing that playbook out the window. In a note Friday, the firm upgraded Tesla to “neutral” from “underweight” and raised its price target 228% to $475 from $145. (The analyst consensus on FactSet is $403.) Instead of focusing on the company’s struggling vehicle business, the new analyst is orienting himself more toward Tesla’s idea of the future, now modeling Tesla’s physical AI and robotaxi fleets all the way out to the year 2040.

Here are the main reasons for the capitulation:

Looking past the car lot: Gupta argues that Tesla “is at the forefront of physical AI, entering uncharted TAMs” and therefore “deserves the benefit of the doubt to be valued on LT earnings potential” rather than near-term speed bumps.
Unmatched vertical integration: Tesla’s control over everything from battery cells to custom silicon gives it a massive moat. JPM notes this starting point advantage is “unmatched at an industrial level scale” and “still somewhat under-appreciated and misunderstood.”
The AWS flywheel effect: Deploying Optimus robots inside its own factories “should not only lower COGS for the base automotive business, but more importantly, help validate the product at an industrial scale.” Gupta called it “a classic flywheel effect, somewhat analogous to AWS and Kiva at AMZN.”

For Tesla bulls who have argued for years that this is an AI company and not a carmaker, JPM’s sudden $3.9 trillion valuation model is the ultimate validation.

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