Faced with the perfect storm of a bleak market and a boom in ultra-budget portables, Apple is believed by some to be readying its own take on the netbook for the first half of 2009.
The company has until now insisted on keeping its prices largely unchanged and instead has upgraded the specifications of its systems to maintain that price. That has kept its average selling price high but has also all but locked the company out of the entry-level and developing-world markets; these are now being joined by cash-strapped customers even within the US, making it that much less likely any of them will pay Apple's minimum asking price. At $999, the least expensive MacBook is twice or more the cost of the most frugal Windows alternatives, Gottheil says.
Gottheil dismisses the notion of an artificial premium on Apple products, noting that they often compete well for the features, but is certain that the Cupertino, Calif.-based company has reached a breaking point where perceived quality can't override genuine financial woes from customers.
"It is too much to ask consumers to pay more than twice as much for a PC in these times," the analyst says.
Moreover, the market is also understood to be shifting away from the Mac's traditional price range. The sudden explosion in the popularity of netbooks — portables with 10-inch or smaller screens that are often based around low-power processors and meant for basic Internet use — has pushed the price of a notebook to as little as $300. Apple can't ignore this, Gottheil claims.
But while the Mac maker's chief Steve Jobs has argued that the iPhone is netbook-like in fulfilling many of the same online roles, the researcher believes that the desire for a keyboard ultimately the usefulness of the iPhone for certain software and that something more is necessary.
Instead, he and TBR are confident that Apple will release a computer in the netbook class within the first half of next year, but one that doesn't obey many of the rules dictated by the industry. Like the MacBook Air ultraportable, this future system would be at least as thin and light as others in its category but would potentially have a larger surface area to allow a larger display or more comfortable input. Netbook owners carry their systems "in stacks with papers and books" and care more about thickness than footprint, according to Gottheil.
Crucially, he also takes to heart Jobs' assertion that $500 systems are typically "junk" and believes that Apple will price the system at $599. The figure would be just low enough to draw customers who would pass over the plastic MacBook but high enough to avoid the risk Apple's co-founder perceives in dropping the price particularly low.
As with most Windows PC makers, Apple would reportedly have to accept the risk of cannibalizing sales for some of its more lucrative notebook models but could theoretically maintain its profit margins and continue to grow its Mac shipments ahead of the industry curve.
While the market conditions are widely accepted and are potentially supported by rumors of an unknown device being tested at Apple that would more closely fit the bill, Gottheil's statements do contradict some of Jobs' own beliefs about netbooks and Apple's role in the marketplace. He believes netbooks are part of a "nascent" category that may not pan out and has said he would be "surprised" if large volumes of notebook buyers shifted to the very bottom of the price spectrum and created problems for Apple.
Still, TBR's analyst warns that buyers, including those looking at Macs, were "more cautious" even in the summer and that Apple in its current position would gain share mainly at the expense of its revenue as users opt for less expensive models whenever possible.
256 Comments
nothing to see here...
I would hate it if Apple released anything below 900$. It just makes the Apple brand look cheap, and crappy. And it allows all these other people to be carrying around a fruit logo when they shouldn't be. In the end Apple will just dilute their brand. Please Steve Jobs - don't do it!
A netbook will never happen from Apple i think, why? who the heck is gonna buy the $1700 Macbook air then?
Given that the MacBook Air is Apple's idea of a 'netbook', my guess is we're more likely to see a touch based Tablet instead. Something in the 6x8 inch size.
It's a natural extension and would further build on the touch interface of both iPhone and multi-touch gestures of the MacBooks.
Going this route would go counter to simply miniaturizing laptops as current netbooks are. By going 'touch', this perceived premium will allow Apple to charge more in the $600-$800 range.
Am I the only person getting tired of netbooks? Fine, they make ultraportable notebooks intended solely for browsing the Internet and responding to email. Great! Why do we keep hearing about how great they are? They're narrow-use products. I'm already tired of the term netbook, just like how I got tired of the terms like "Web 2.0" and "blog" years ago. Enough.
Snow Leopard and a rumored $99 iPhone are bigger deals than an Apple netbook.