Apple's (NASDAQ:AAPL) broader transition to super high-resolution displays inches closer to completion. Apple started the shift in 2010 with the iPhone 4, and then kicked things off on the Mac front with the Retina MacBook Pro in 2012.
However, there was a key difference in those product launches. In smartphones, the subsidized price did not change so the effective cost to consumers to upgrade was $0. But with the Retina MacBook Pros, there was a $400 premium that consumers were paying to get those sharp Retina displays. That's much more to ask when the value proposition may not be as clear.
At the time, the difference in component costs was estimated at just $65 to $92, so most of the premium was going straight to gross margin. It only took a couple of months for Apple to aggressively cut prices, presumably because adoption had been tepid. Indeed, Mac average selling prices, hardly flinched after Retina displays were introduced, and are lower today.
This is why references to Retina iMacs that were recently uncovered in the forthcoming OS X Yosemite may not be a particularly promising revenue opportunity for Apple. Rumors of Retina iMacs have been around for at least two years, but there have been technical limitations with powering so many pixels. A 27-inch Retina iMac has nearly three times as many pixels as the Retina MacBook Pro.
The good news is that Intel (NASDAQ:INTC) has made incredible progress over the past 2 years with its integrated graphics. That's relevant because Apple has started using integrated Iris Pro graphics in the low-end iMac, and it likely wants to expand the use of Iris Pro going forward. Apple has been a big pusher of integrated graphics, pressuring Intel to really beef up its graphics prowess.
Sure, NVIDIA's discrete graphics should have no problem handling all those pixels, but it's quite likely that Apple's road map puts a heavy emphasis on integrated graphics. As Intel continues to drive integrated graphics performance, a Retina iMac inches closer to reality.
It's times like these when actions speak louder than words. Apple always talks about its focus on making great products that comprise a broader ecosystem. Even if there's not much revenue upside from iMacs (depending on where it prices the all-in-one desktops), upgrading them to Retina displays strengthens the product lineup and maintains the momentum that Apple has in growing its share of the global PC market.
Most companies that are singularly focused on the bottom line might not actually make investments that don't promise financial gains. Apple keeps its eye on the bigger product picture, which is partially how it may have solved the Innovator's Dilemma.