NetbookTech

Those Apple netbook rumors just won’t die will they?

This time, analyst Gene Munster of Piper Jaffray, states that Apple will likely introduce a “scaled-down MacBook Air” in the next two years – possibly as early as 2009. The system would probably come with an 11 inch display and cost between $800 dollars and $1000 dollars – still above what most of us are used to paying for Windows-based netbook systems. (mind you, you can always buy a $400 dollar MSI Wind and run a hacked version of OS X on it).

Now of course, I wouldn’t label such a system a netbook but then again- there’s really no formal definition as to what a netbook is, is there?

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Wall Street analysts at Apple’s quarterly conference call yesterday received a special surprise – Steve Jobs himself was on hand to answer questions about the company’s performance and where it was going. Of course the question of netbooks came up again, and Steve had some interesting things to say.

As most of you already know from last week’s MacBook/MacBook Pro  announcement event, Jobs considers the netbook market a “nascent” category – something they will monitor but not get involved in .. yet. Yet at the very core, it boils down to this. Apple won’t get involved with every single computing market out there (think Tablet PC as an example). The market has to have demand, and it has to generate a good gross profit margin for the company. Remember, Apple has long charged more for their products than comparable PC products simply on the basis that their products were better than PC counterparts. If a Windows based netbook is going for $399 – what would a comparable Apple netbook cost? $499? Surely it can’t be $399 also because then Apple is telling us their product is value wise the same as a Windows based netbook. So.. is $100 dollars the added value of an Apple branded product? Is it $50 dollars? Is it more as is the case for MacBooks and MacBook Pros?

Or of course, you can put it the way Steve puts it – “We don’t know how to make a $500 computer that’s not a piece of junk, and our DNA will not let us ship that.” Translation – we don’t want to enter into that market because it might dilute our brand.

So in the meantime, what is Apple’s response to the netbook? It’s the iPhone of course. In this single device, you can do many of the same things that a netbook can – although a major piece that’s missing is office productivity software. However, the iPhone has a growing application developer audience, it has A LOT of users, and it’s pocketable – something a netbook can’t claim.

Of course, Apple reserves the right to change it’s mind down the road…

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So the Apple notebook event came and went and .. unfortunately there was no announcement of an $899 notebook system as rumored. About the only real price movement was the reduction in price of the current MacBook systems – from $1099 to $999.

In many ways, it makes sense for Apple to maintain a certain price level for their notebook products. Coming out with an $899 or lower model would most certainly dilute sales from higher end Apple notebooks – and thus reduce their overall gross profit margins. These are certainly the same risks that many notebook vendors face today with the onslaught of netbook systems. First time and second time PC buyers are opting for netbook systems over more expensive notebooks – simply because they’re 1) cheaper and 2) more than adequate for their needs.

Of course, it’s still important for Apple to maintain some vigilance on the netbook front – simply because these systems do pose a threat to Apple’s notebook business. Luckily for Apple, a person who wants OS X on a netbook has no choice but to go to an Apple notebook system – unless they venture to install a hacked OS X copy onto a netbook. 

It’s a shame too – it’s weird for me to say this but I’d much prefer to run OS X on a netbook than Windows XP or possibly even Linux. Having tried OS X on the Atom based S10 netbook, I certainly would love to see a low cost netbook from Apple. Unfortunately, it’s very unlikely for Apple to ever take this course unless it really feels it needs to.

The Boy Genius Report has received information from an Apple insider that supposedly confirms the existence of an $899 product price point within the Apple Store inventory. Hmm.. is this possibly the new rumored Apple low end notebook/netbook system? Guess we’ll find out in about 10+ hours but let’s hope Apple indeed comes out with a low end model. The company needs to have a product that can effectively compete against low end Windows notebooks and netbook systems and an $899 model could possibly do that.

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