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Summary:

Writing in the Huffington Post, Larry Magid raises the point that PC netbooks are hot sellers for very good reasons — namely that these small laptops, which typically cost between $300 and $400, can do most things a large portion of users want to do with […]

Writing in the Huffington Post, Larry Magid raises the point that PC netbooks are hot sellers for very good reasons — namely that these small laptops, which typically cost between $300 and $400, can do most things a large portion of users want to do with a laptop computer, and do them much more cheaply, as well as being handily smaller and lighter than traditional laptops.

Small Laptop Price Premium Dynamic Turned On Its Head

I agree, and along with Magid note the irony of a changing dynamic where, reversing erstwhile conventional wisdom that computer consumers would be obliged to pay extra for the required engineering of miniaturization, with smaller laptops often costing more than larger siblings of the same brand (think PowerBook Duo vs. PowerBook or MacBook Air and MacBook), netbooks have turned the cost/weight equation on its head.

Mainstream netbooks, particularly ones equipped with the latest Intel Atom N270 processors running at 1.60 GHz, with a GB of RAM and a 160GB hard drive, are perfectly adequate for most common tasks people use computers for such as Web surfing and e-mail, and even for watching web video. At least for non-touch typists, their usually undersized keyboards are also considered tolerable.

Downward Pressure On All Laptop Pricing

Then there’s the netbook phenomenon’s collateral effect of exerting strong downward pressure on standard sized notebook computer prices, to which even Apple has not been immune, as exemplified by the 13″ MacBook Pro being cheaper than its aluminum unibody MacBook predecessor, and the debut of a lower entry level 15″ MacBook Pro stripped of its ExpressCard Slot and discrete graphics processor/VRAM.

A prima facie topical example is Lenovo’s new ThinkPad Edge, which has a 13-inch display, a typically excellent Lenovo full-size keyboard, an AMD Athlon dual-core processor, 2GB of RAM, a 320GB 5400 RPM hard drive, three USB ports, runs Windows 7, offers five-hour real world battery runtime, and is priced starting at an easy-on-the-wallet $599. Move up to a 1.3GHz Core Duo Intel processor and 4GB of memory and you’re still at $799.

That’s of course only $200 less than Apple’s entry-level MacBook, which at $999 has a much more powerful 2.26GHz Core 2 Duo processor and Nvidia 9600M 9400M integrated graphics, but only 2GB of RAM, a measly two USB ports, and a 250GB hard drive. To get the same 4GB of memory and 320GB of storage specs as the $799 Lenovo or even a $399 Dell Inspiron 15, you’re up to $1,149, while a comparable spec MacBook Pro will set you back a whopping (by comparison) $1,399 — a thousand dollars greater than your typical netbook.

Mac Still Greater Value, But Gap Narrowing

Now personally, I still think greater value is found in the Macs, especially due to their OS X-clusivity, and projected durability over the longer haul, or if you need the extra processing and graphics power they offer. But, with PC competition stiffening, and consensus building that Windows 7 is actually a pretty decent operating system, the OS X advantage is diminishing. That base AMD-powered Lenovo ThinkPad Edge for $600 bucks looks particularly enticing for cash-strapped or value-oriented users whose computing power needs are typically modest, especially in this challenging economy

That’s why I continue to stubbornly contend that the forthcoming iPad notwithstanding, Apple still needs a conventional clamshell notebook contender in the $600 – $700 price category.

Related GigaOM Pro Research: Report: The Future of Netbooks!

  1. Apple obviously does not “need’ any such thing considering their sales figures and profits margins. Your want does not make a need for them.

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    1. As someone who obsessively watches the sales numbers, I have to agree. Mac portable sales are going up, not down. A better argument could be made for a mid-size desktop replacement based upon dwindling sales of the Mac Pro meaning, as there is increasingly little to lose.

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    2. Ah Charles Moore, the netbook guy… It’s getting old. You aren’t going to convince anyone that Apple should make a netbook, even if you write a piece every 2 weeks erroneously making your point.

      As Darwin points out as well as the majority of the soon to come comments, Apple doesn’t “need” to sell a cheap notebook.

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  2. I strongly disagree. Apple notebooks are the top-of-the-line when it comes to laptops. People think “MacBook” and they think quality, durability, easy-of-use and high-price. People distinguish product quality by the highest price point, therefore having all Apple laptops start at $1,000 is a strategic price point which no laptop should dip below.

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  3. @darwin just to clarify I don’t strongly disagree with your comment, I am referring to the article :)

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  4. Isn’t the Lenovo ThinkPad a product of a Chinese company now since IBM sold it off? Where do dollars the end up???

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  5. We don’t see people hassling Maybach to make more affordable Maybachs akin to Fords.

    Why-o-why, then, do you deem it necessary for Apple to make netbooks? Not only would it be overkill with the iPhone and iPad, but it contradicts Apple’s overall business model: they want to make higher end products, and successfully do. Lower end products will always sell better by default because clearly, the majority of people go for what gets the job done. In this case, most who use computers just want it to turn on and take them to the internet.

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  6. When a 16GB iPhone debuts at $699? That’s silly, there’s no way they could make the kind of profit on a netbook they make on a $700 phone.

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  7. The “in this economy” argument gets disproved every time Apple releases their quarterly earnings. MacBook sales continue to grow, despite the higher price of entry compared to PCs.

    The question to ask yourself is how does a $600 – $700 netbook help Apple make more money? The answer is that it doesn’t. It would likely cannibalize sales from other MacBooks, reducing Apple’s revenues. Apple just isn’t interested in selling notebooks to “cash-strapped” consumers.

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  8. Perhaps some Apple execs should visit campus libraries. I’m doing some writing at the University of Washington, and netbooks are now about as common there as MacBooks. For commuting students who need to carry textbooks into campus, the weight savings are more than enough to counter the small screen and keyboard.

    It is possible that the iPad will counter this trend, but I suspect that will only happen if:

    1. Apple comes up with an even more compact Bluetooth keyboard for it, perhaps even a thumb keypad the size of an iPod touch. Students and those in business have gotten used to Blackberry-sized keyboards. Give them one of the iPad touch, the iPhone, and the iPod touch.

    2. Textbooks become available in sufficient quantities to let students save money and weight. And for that, we need an enhanced ePub standard that can intelligently deal with graphics and tables, as well as allowing highlighting and note-making. Students won’t go for textbooks they can’t mark up.

    Do both of the above, and Apple can make a big dent in the netbook market without selling a netbook.

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    1. That’s interesting – I’m a librarian at the University of Michigan, and I’m seeing exactly the opposite. Student laptop usage appears to be evenly split between Mac and Windows platforms here, and only 10-20% of the Windows users have netbooks.

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  9. why? so the retards who cry “but i can run windows just fine on my $300 dell” can’t get a mac? no thanks.

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    1. *can*

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    2. You’re not helping.

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  10. It’s a failed argument. What you *want* is not what Apple *needs* to do, no matter how much you may think you want it. Apple seems to be doing exactly what apple needs to be doing. This is proven by numbers, not anecdote.

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    1. Yes, which is why OSX has seen a decline in market share overall lately. A lower cost/high quality notebook from Apple could help it gain market share.

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    2. No such thing as lower cost and higher quality.

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    3. Weird so when Apple lowered the cost of say the iphone they made it lower quality? Or moving away from Apple when Sony/Nintendo lower the price of their consoles and include better hardware inside they are actually making it lower quality?

      Either way, I was saying Apple could make a lower cost laptop that is high quality not higher quality.

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