Today's mobile devices, whether one is talking about smartphones, tablets, or even PCs, are upping the ante on display resolutions. High-end PCs now sport 3200-by-1800 pixel displays, and flagship Android phones feature up to 2560-by-1440 displays. I would argue that this "resolution race" originated with Apple (NASDAQ:AAPL), which coined the phrase "retina display" and started the trend of high-display resolutions in mainstream devices.
The ironic part of this all, though, is that Apple's MacBook Air, which management has strongly hinted is the biggest driver of the Mac lines substantial year-over-year growth in recent quarters, features a pretty paltry display.
Low resolution twisted-nematic for the MacBook Air
The displays on Apple's higher-end MacBook Pro and on other high-end Windows PCs typically sport very high resolutions of 1920-by-1080 or greater, and are what are known as in-plane switching, or IPS, displays.
IPS displays typically offer better viewing angles and color reproduction than an alternative type of display, known as twisted-nematic, or TN. These displays are cheaper to make and usually offer faster response times, but for general purpose usage and for "professional" use cases such as photo and video editing, IPS panels are "better." That's why the MacBook Pro line gets IPS panels while the MacBook Air gets a TN.
The MacBook Pro lineup gets high display resolutions of 2560-by-1600 for the 13-inch device and 2880-by-1800 for the 15-inch, while the MacBook Airs are stuck with 1366-by-768 for the 11.6-inch model or 1440-by-900 for the 13-inch models.
That's where the irony comes in
Despite the low-resolution "nonretina" displays, the MacBook Air is a very popular laptop. In fact, according to NPD (via AppleInsider), the MacBook Air "grabbed 56% of the U.S. thin-and-light notebook market during the first five months of 2013."
And that was before the upgraded variant with Intel's (NASDAQ:INTC) Haswell processor, which helped significantly boost battery life, showed up.
While the rest of the PC industry focuses on sticking in super high-resolution displays in a bid to beat Apple at its own game, consumers don't actually seem to value the display resolution over other factors. Sure, having a high resolution display is nice, but such displays add cost and use more power, which can detract from battery life.
Apple will eventually go retina in the MacBook Air, but that's not the point
I fully expect Apple to go with a much higher-resolution IPS display in the next-generation MacBook Air. As the power consumed by the processor continues to come down (I believe Intel's upcoming Broadwell processor will consume less energy than today's Haswell processors), more of the thermal budget becomes available for a higher-resolution display.
Additionally, at some point, the MacBook Air installed base will become so overwhelmingly dominated by fairly recent MacBook Air models that Apple will have to improve on that front (as well as some others) in order to persuade people to upgrade.
Nonetheless, my point here is that even with an inferior display to the high-resolution, touch-enabled IPS powerhouses available on Windows 8.1 laptops, Apple has continued to report Mac revenue growth well in excess of the broader PC market, implying overall PC share gains. Considering that Apple has pointed to the strength of its "portable [Macs]" on earnings calls, it seems that the MacBook Air is helping to drive overall notebook share gain for the company.
This ultimately suggests Apple's competitive positioning, at least in the Mac, is driven by factors such as the Apple brand, operating system, and other intangibles. Given how gross margin-friendly "intangible" competitive advantages are, I'd say this bodes well over the longer term for Apple's Mac business from a market share and a margin perspective.