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How Should Apple Address the Netbook?

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With all the interest in Netbooks these days, many eyes are on Apple (s aapl) to see what kind of move they may make in this relatively new space. Some analysts believe that Netbooks are a risky idea for all PC makers, while others foster the belief that Apple could be in trouble because of such devices. I think the speculation and analysis of Apple’s plans has been done to death (as with anything that Apple hasn’t announced yet), so this is my view of how I think Apple should address the Netbook market.


Quickly, let’s define a typical Netbook. Generally sized around 6″ by 9″, these are small, ultramobile computers. The hardware tends to be severely underpowered, that is, relative to the notebook and desktop computers we are used to using these days. And it’s commonplace for optical drives, and most ports (ethernet, display, etc) to be absent in order to save space. So these are small, limited capability machines that can go nearly anywhere and accomplish run of the mill computing activities like email and web browsing.

The Rub

On one side of the coin are fears coming from PC makers themselves. They don’t want to cannibalize their high-end computer system sales by addressing the Netbook market. Profit margins on Netbooks, after all, are nothing like the high horsepower gaming and multimedia machines they love to sell for big bucks. Apple, being mostly a premium-only computer maker, could very easily fit into this line of thought. The other side of the coin however, is that Apple’s relatively small market share can only be diminished by such inexpensive rival computer offerings, especially in these difficult economic times. Apple’s Achilles heel is that (with the exception of the relatively low-powered Mac mini) they don’t offer low-end machines. Analysts feel that they need to get into this space to have a chance at holding the footing they’ve fought so hard for.

On Their Way

I think the recent upgrades to Apple’s notebook line have greatly blurred the lines between consumer and pro, leaving plenty of space for a Netbook-size offering. Of course if something is indeed in the pipeline, Apple will lie through its teeth about it until they’re good and ready for a proper unveil. My suspicion is that whatever Cupertino’s concept is of a Netbook, it bears very little resemblance to what the rest of us are becoming accustomed to from the likes of Dell (s dell), HP (s hpq), and other current Netbook manufacturers.

In a manner of speaking, Apple has already entered this market, albeit, incognito. Disguised as a cellular phone and MP3 player respectively, the iPhone and iPod touch are on the verge of being an ultramobile computing platform. I’m not saying they that these devices do in fact fill this space — there are after all, lots of shortcomings when compared to a true Netbook (lack of x86 architecture and no copy/paste come to mind, for example) — rather, that they’re a peek at the potential from Apple.

Fellow GigaOm blogger, jkOnTheRun’s Kevin Tofel, shared with me, “The market is trying to shoehorn a full desktop OS on to these devices, but that may not be the best idea.” Interestingly, Apple has already shown us a modified version of OS X running on these devices — possibly a step toward addressing Kevin’s gripe. Unfortunately, the ugly truth is that an unsubsidized 16GB iPhone costs nearly $700, which is nearly double the typical Netbook price tag. In order for Apple to compete with conventional Netbooks within their price range would be a monumental task, at least by conventional thinking. Perhaps it’s time to think different…

“I Got Vision & The Rest of The World is Wearing Bifocals”

I believe Apple will put to use the strong partnership they’ve forged with Intel (s intc) and Nvidia (s nvda) to cram some powerful parts into a small package — mostly because they don’t seem capable of bringing anything less to market. And I’m guessing the interface will be something Multitouch-based, only taken to the next level.  I’m envisioning something along the lines of a full half of the clam-shell being akin to the glass trackpads of today’s unibody MacBook line.

Despite super tiny hard drive options now a days, I can see Apple pushing MobileMe as a cloud storage solution (hopefully once MobileMe is running like the well-oiled machine we all expect from Apple). In doing so comes a possible option to alleviate a small bit of the pricing if a MobileMe contract is agreed-upon at purchase. The way Apple has pushed .Mac in the past leads me to believe that this isn’t too far fetched. Then to address further costs, subsidized pricing may come as this device is offered via partnership with AT&T and their 3G service, for nearly ubiquitous connectivity.

Last, Kevin mentions the relatively poor battery life of current Netbook offerings. Between Apple’s efficient hardware architecture designs, and the new moldable battery technology in the 17″ MacBook Pro, I’d say there’s yet some more huge potential for Cupertino to turn the Netbook market on its ear.

Last Words

If Apple can overcome the pricing hurdle, I’ve no doubt they’ll bring a whole new degree of sexy to the Netbook market. With the iPhone, they’ve proven their ability to enter an already established market and hurtle themselves to the front of the pack. Why not with something like a Netbook that could bring even more users into the fold? (Ha, I say ‘users’ as if Apple is a drug. Perhaps I’m on to something…)

In my completely unsubstantiated opinion, I think it’s safe to say that the Netbook market is much more viable for Apple to consider than the Tablet space has been, and that an announcement is inevitable in the next year. How that product will look and function, or how its price will stack against the competition is anyone’s guess. But as someone who’s hungrily eying some of the current Netbook models (to be lovingly made into a Hackintosh to hold me over), I’m anxiously anticipating hard news from Cupertino on the subject.

Got some wild, Apple-worthy ideas of what their Netbook may look like? Do share in the comments! Oh, and bonus points if you know where the “bifocals” quote is from…

10 Responses to “How Should Apple Address the Netbook?”

  1. I say Apple needs to build one. I would buy it tomorrow if they made one. I have a unibody Macbook Pro and an iPhone and do a lot of international travel. I would leave the Macbook Pro at home and take the Apple NetBook any day!! Apple makes awesome devices big and small and if you priced it at $600 or $700 and had the same form factor as the Air then the whole world would buy it.

  2. Horatio8

    Your statement that in Netbooks most ports are absent is incorrect. My Dell Mini 9 has 3 usb, ethernet, vga out, mic, and headphones. This is pretty standard for the category. I do agree that an optical drive is not a feature. I think there is a market space for an Apple netbook that is priced around $1,000 and offers enhanced video and sound.

  3. couple quick things: it’s Achilles heel, not heal:)

    also – where is the $700 unsubsidized price for a 16GB phone coming from? full retail on one is $499, which is definitely more than most netbooks but still a couple hundred less than the $700 i saw here – unless this isn’t referring to american prices, which i (perhaps wrongfully) assumed?

    to address to actual issue, i have an aspire one running windows7. it’s got the standard atom, 1gb ram, and a 160GB hard drive. aside from lacking a discrete video card, it’s actually a hair more powerful than the 15″ powerbook g4 that i own. when it came down to either replacing the HDD/Keyboard in the powerbook (to say nothing of the cost of buying a new battery, because mine is shot), it was more cost effective to purchase a netbook than to repair the powerbook. i have a mac pro as my main machine, so i was mostly using the powerbook for the market the netbook sits in – internet, email, that sort of thing.

    that all being said, i’m very satisfied with my purchase. total was $412, tax included. the six cell battery gives me roughly 5 hours of battery life with wifi on, and brightness to a minimum.

    i will agree that any apple take on a netbook would likely be radically different from anything currently on the market. i have a special love the the 12″ powerbook, which was indeed a full featured notebook with all the trimmings, in a pretty tiny case.

    lack of an optical drive is fine, apple already brands its own external superdrive, and third party options are plentiful. my aspire has no lack of ports – three usb 2.0 ports, ethernet, AND vga. not to mention two card readers. i can envision an apple netbook sporting a pair of usb ports, and maybe a mini display port. assuming they used the atom, pairing it with nvidia graphics (aka – the ‘ion’ platform) would be far better than the integrated intel graphics on most netbooks now, but iirc intel makes it difficult to get the atom for a decent price using anything but intel graphics. i’m not entirely convinced apple would go with the atom though, given it’s rather poky nature (not that i have any complaints).

    the glass trackpads on apple’s current notebooks are simply massive compared to current netbooks offerings, so it’d be interesting to see them reconcile that. most netbook trackpads really suck. maybe a multi-touch screen is the answer, but if that’s the i see it manifesting itself in a portable tablet style device with no physical keyboard.

    of course, all this supposes that apple addresses this market as it exists now, rather than redefining the whole thing as many expect them to, ala the iphone. it’ll be interesting to see.

  4. The Apple netbook will be a handheld (PS Semi will be very critical here). And it is the only way for it not to cannibalize the sales of their laptops. Market share numbers contribute nothing to the bottom line of the company and in this tough business environment every cent made counts.

  5. JC in Ottawa

    Apple’s greatest asset is the ability to run OS-X on an ARM platform:
    – Much lower power, with integrated GPU. It could be the same die as the next generation iPhone, only multicore Cortex-8 running higher clock speeds.
    – Microsoft Windows cannot compete, as it’s x86 (power hungry Atom+GPU)
    – Advanced features, such as Instant on, and push e-mail in sleep mode
    – low power = smaller heatsink = longer battery life
    – Will not cannibalize Macbooks profits

  6. Monstamac

    Netbooks are the wrong answer to the right problem. Mobile and readable access to our information on the go, whether that be traveling, or simply away from the desk. An iPod Touch the size of a paperback novel would be near perfect ( or even a little bigger ). The Sony ebook reader is the perfect form factor. It doesn’t need to be smaller, you have your iPhone. It doesn’t need to be a “Computer”, or you’d take it with you. I hold out hope that this is where we are heading, and if Apple doesn’t do it, I hope someone else does. I need it now and I don’t need yet another laptop, however small.

  7. As a frequent non-business traveler/backpacker I can think of nothing that could be better than having an Apple netbook to stuff into my backpack to use when I need to send an email, reserve forward bookings, booking flights, checking in,etc..