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Wednesday, January 21, 2009, 02:45 pm PT (05:45 pm ET)

Apple rules out "iPhone nano," not keen on Mac netbook

Apple exposed its complete lack of interest in building a stripped down, voice-only iPhone or a Mac-based netbook during its fiscal first quarter conference call Wednesday afternoon.

No iPhone nano

In response to analyst questions on iPhone pricing, Tim Cook, Apple's acting chief executive, stated, "We are now in over 70 countries with the iPhone and you're correct, some of them are non-subsidized markets.  Examples are, the largest is in terms of size of the market, our sales are clearly materially less in those markets than they are in the subsidized markets with contracts.  We are constantly evaluating the best way to play in these markets.  We know there's a huge opportunity here, and we will make adjustments in the future there to play in a better way."

Cook also destroyed the speculation around an "iPhone nano," saying, "You know us, we're not going to play in the low-end voice phone business. That's not who we are. That's not why we're here. We'll let somebody do that, our goal is not to be the unit share leader in the phone industry. It is to build the best phone."

Steve Jobs made similar remarks during the last quarterly conference call in October. When asked why Apple only has one product offering in the vast smartphone market and what further opportunities for innovation or "other market opportunities within that market" Apple might have, Jobs replied, "I wasn't alive then, but from everything I've heard, Babe Ruth only had one home run. He just kept hitting it over and over again.

Jobs added, "I think that the traditional game in the phone market has been to produce a voice phone in a hundred different varieties. But as software starts to become the differentiating technology of this product category, I think that people are going to find that a hundred variations presented to a software developer is not very enticing. And most of the competitors in this phone business do not really have much experience in a software platform business."

"So we're extremely comfortable with our product strategy going forward, and we approach it as a software platform company, which is pretty different than most of our competitors."

No Mac netbook imminent

Asked about the sub-$500 netbook market, Cook answered, "We're watching that space, but right now from our point of view, the products in there are principally based on hardware that's much less powerful than we think customers want, software technology that is not good, cramped keyboards, small displays."

Cook added, "We don't think people will be pleased with those products. It's a category we watch, we've got some ideas here, but right now we think the products are inferior and will not provide an experience to customers they're happy with."

Again, Jobs made very similar comments on the prospects for a netbook from Apple during the last call. "As we look at the netbook category, that's a nascent category. As best as we can tell, there's not a lot of them being sold," Jobs said.

"You know, one of our entrants into that category if you will is the iPhone, for browsing the Internet, and doing email and all the other things that a netbook lets you do. And being connected via the cellular network wherever you are, an iPhone is a pretty good solution for that, and it fits in your pocket.

"But we'll wait and see how that nascent category evolves, and we have got some pretty interesting ideas if it does evolve," Jobs said.

Additional coverage of Apple's Q109 release

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Notes of interest for Apple's Q1 2009 financial results call
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