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Apple’s new MacBook: Worth a $500 tax?

FORTUNE — If the 13-inch MacBook Pro with Retina Display looks familiar, that’s because you’ve seen it before. Last summer, Apple released a 15-inch version, which I reviewed and liked. It was a fast, tightly-engineered slab of hardware with one of the best displays around. The only caveat was the stratospheric price tag. At $2,199, only gamers, video editors, or the plain affluent need apply.

Now, just months later, we have its smaller, 13-inch sibling. Sound now comes through the keyboard and new air vents on either side of the notebook’s bottom — the 15-inch has speakers on either side of the keyboard — but otherwise, the new MacBook Pro looks identical. Visually, it’s yet another example of Apple’s (AAPL) excellent industrial design, but chances are people will mistake it for its predecessors. I spent more than a week toting it around San Francisco — and in one case, even shamelessly waved it around a cafe — but no one noticed.

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Still, the MacBook Pro with Retina is thinner and lighter. Just over 3.5 lbs., this MacBook Pro is 1 lb. lighter and 20% thinner than generations before it. That puts it within a stone’s throw of the 13-inch MacBook Air, which is just half-a-pound less give or take. The $1,699 version, our review model, offers a 2.5 GHz dual-core Intel Core i5 processor, 8 gigabytes of RAM, 128 GB of flash storage, and 7 hours of battery life. A $1,999 version mostly offers the same components, but doubles the flash storage. Missing in action: the optical disc drive, which Apple appears hellbent on systematically ridding from its notebooks model by model.

Everything zipped by in day-to-day usage. Apps opened within seconds, if not instantly thanks to that flash storage, and juggling multiple tabbed browser windows and apps was oftentimes smooth. The only hiccups occurred when multitasking and playing Flash-based videos on Hulu. Videos briefly became choppy, but slogged on. I chalk this up mostly to the lack of a dedicated graphics card since this wasn’t an issue on the 15-inch MacBook Pro when I tested it.

The Retina Display is every bit as sharp as expected. With a pixel density of 226 pixels per inch now, that means there’s four times the pixels of the previous 13-inch MacBook Pro. There’s the option to change the resolution to one of four settings, with the highest setting “More Space” allowing users to see far more on their screens than before. This made it easier for me to work day-to-day when I was away from a monitor to hook it up to, although text at times became too small without my glasses on. Viewing angles are superb, too. No matter how much I tilted it, I could still easily make out what was onscreen, something which I can’t say of many other notebooks, even my MacBook Air.

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Apple also says it improved speakers on this notebook. While volume is louder, the bass response was lacking, even when compared to the 15-inch MacBook Pro Retina, which sports overall better clarity, particularly on acoustic songs. In other words, you’ll never mistake these for anything but above-average notebook speakers.

Battery life, too was also solid: 4.5 hours with full brightness and 5.5 hours with two-thirds brightness. That’s not as long as the 13-inch MacBook Air, which I can routinely eek 6-plus hours out of, but given the faster processor and better display here, the tradeoff is understandable.

In all, this new 13-inch MacBook Pro is an extremely solid and welcome addition to MacBook line, although, some may wonder who exactly it’s for. Without a dedicated graphics card, it’s obviously not aimed at video professionals, and with a $1,699 price tag, it’s probably out of reach for many students and budget-conscious consumers. That leaves people with some cash to burn seeking a notebook that strikes a balance between solid performance and portability. In which case, they’ll walk away happy with this. But for others, the cheaper MacBook Air — and in some cases, non-Retina MacBook Pro — remains a more attractive bargain because chances are, most users won’t miss the faster processor. They may however, wish they had a few extra hundred to splurge on the sharper screen.