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Netbook Shipments Skyrocket, Apple Still Missing the Boat

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The Register’s Tony Smith notes in a report that the last 12 months have been good for netbook makers, who cumulatively shipped 30.2 million of the mini laptops in that period. According to market watcher Strategy Analytics, that’s 79 percent more than they moved in 2008 and amounts to 50-60 percent of total portable PCs shipped and around 17-20 percent of PCs sold overall.

The researcher also forecasts further growth this year as netbook chips deliver more performance and ARM licensees take on Intel’s (s intc) dominant Atom platform.

The iPad (s aapl) notwithstanding, I’m still convinced that Apple has fumbled the ball in not offering a netbook. If it can sell an iPad for $500, I deduce that a netbook with a clamshell form factor, a real keyboard and trackpad, plus ideally a low-powered Intel Core CPU, decent connectivity, and capability to run the real Mac OS, should be eminently possible at an entry-level price of $600-$650 — at which I contend it would be a strong seller. It’d certainly be a machine that would appeal to me much more than the iPad does in its announced configuration.

Chinese Knockoffs

A knockoff outfit in China is showing the way, having released a tantalizing example of the potential for a truly appealing Apple netbook, if Apple were inclined to play ball. The Chinese tech industry-watching blog M.I.C (ie: “Made-In-China”) has posted a review of what it calls “the ultimate MacBook Air knockoff” — the best MacBook Air wannabe ever, featuring a real glowing Apple logo and a form factor almost as thin as the real MBA — which M.I.C. thinks is possibly the most beautiful product the Chinese knockoff makers have ever copied. I’m inclined to agree.

Of course it’s not really a Mac, and OS X is not supported. It is a PC netbook in ersatz Mac clothing, powered by the latest version of the ubiquitous 1.66GHz Intel Atom N450 CPU with 1GB of RAM (upgradable to 2GB RAM at a modest additional cost of $180 RMB), a 160GB hard drive, a 13.3-inch (1280 x 800) LED-backlit display and a swappable 4-cell battery, plus 802.11b/g/n Wi-Fi, and, get this — selling for only $1,900 RMB (about $280). To say it’s much more affordable than Apple’s real MacBook Air is an extreme understatement.

The M.I.C. reviewers say typing is a pleasure on the MBA knockoff’s full-sized keyboard, and there’s a spacious trackpad too, although it doesn’t support multitouch technology.

Connectivity-wise, the knockoff netbook is somewhat less challenged than a real MacBook Air, with two USB 2.0 ports rather than the MBA’s one, a mini-HDMI port, and one headphone jack, but you also get an Ethernet port and a SD-card slot — not bad at all for a $280 laptop. There’s also a webcam along with an infrared detector beside it.

The downside cited is noise, with the fan reportedly running almost nonstop during basic operation, which would be tiresome, especially if you’re fan noise-averse like me.

As far as I can tell, these units aren’t likely to ever make it to North America as it’s a given that Apple Legal would have a lot to say about it. But if they were available, I don’t think I could resist. It looks like a great little inexpensive solution for taking on the road, and possibly running Ubuntu or Puppy Linux on instead of Windows.

How about you? Would a machine like this appeal? More pointedly, don’t you wish Apple would build a netbook Mac like this?

52 Responses to “Netbook Shipments Skyrocket, Apple Still Missing the Boat”

  1. Register writers are constantly proving they’re clue-impaired by writing such nonsense.

    Can’t they trot out a less worn meme once in a while? Profits on netbooks STINK! A whole lot of nothing is still nothing.

    Apple is vastly more profitable than the netbook manufacturers for one reason. They understand that making a boatload of laptops with microscopic profits is not good business.

    Sony Drone #1: “We lose 6 cents on each PS3 we sell.”

    Sony Drone #2: “Yeah, but we make it up on volume!”

  2. I’m reading this as I’m having breakfast in bed with my MacBook while my wife is using her Netbook. We’ve both been reading the NY Times using the reader running Adobe Air, which runs on both platforms.

    The new iPad may work almost like a Netbook if you have the optional wireless keyboard and perhaps even a little stand to connect the two.

    But the iPad won’t have the full functionality of a Netbook or Mac unless it becomes an open platform running unrestricted applications, be they MS Office, Adobe Photoshop, Air, Flash, Firefox, etc. I think Apple is making a big mistake by delivering a closed platform.I know that Apple just may allow things like specific Adobe Air applications, e.g., the Times Reader, to run on the iPad. But I simply don’t think I’ll ever be buying a “real computer” with anyone having that kind of control over my apps. (Yes, I do have an iPhone and love it, but don’t think of it as a real general-purpose computer.) What Aple is doing sounds like something the Chinese government would want to do.

  3. I think you massively fail to understand why most people who buy netbooks buy them. They do so because they’re CHEAP. It has less to do with portability than with the desire to get a portable computer at the absolute lowest cost possible. I don’t want Apple to be part of that market. In case you don’t notice, Apple’s focus is on great user experience, not being cheap, or ultraportable. Every netbook that I have used has been crap. If the product is crap, it completely negates any gains from getting it at a cheap price point.

  4. My impression based on talking with and observing netbook users is that they fall into two groups:

    1. Older people who don’t like computers but need them to email their kids, get photos of their grandkids, and occasionally browse. They’ll go absolutely crazy when the inexpensive much more intuitive iPad comes out. And the $14.95 data plan is perfect for their modest uses, since the alternative is a much pricer DSL or cable plan. Among seniors, the iPad will beat the socks off netbooks.

    2. Students who need something they can carry to campus, something that’s light and not so expensive that losing it is a disaster. Some will adopt iPads no matter what. Others will do so only if it comes with enough of the proper software for students to counter the sense that it’s just an iPod touch with a bigger screen.

    iWork is a partial solution, and Microsoft OneNote for the iPad would be even better. But what they’ll also want is the iPad as a replacement for physical textbooks, lightening still more what they have to carry and pay. And that means not just an ability to read via iPad applications, but the ability to highlight and make notations just like students do with physical textbooks. If iBook is just a reader and if ePub doesn’t improve enough to handle college textbooks with features such as endnotes and graphics, then quite a few students may grudgingly stick with netbooks until the iPad accumulates enough student-useful applications.

    Also, I suspect that a generation reared on thumb-typing, would be much more likely to adopt an iPad if someone would create an iPod touch-sized Bluetooth keypad for it. Faced with carrying an iPad and a full-sized keyboard, many students may opt for a cheap netbook instead. And I can easily imagine a student placing an iPad on the classroom desk in front of him and madly taking notes with that thumb keyboard held in his lap.

    Finally, there;s a third potential set of customers not being mentioned and for whom the iPad could replace, not a netbook but the Kindle. These are people on-the-go a lot who have a lot of written material they need to review, comment upon, and approve. If Apple (or someone) would create an application that would eliminate all the hassles (emailing, tracking, marking up etc) of this process, they’d sell planeloads of iPads to people who’d use it in addition to their full-sized laptop.

    Why? No one who is waiting in line at an airport for a few minutes is going to pull out their laptop, boot it up, and juggle it in one arm, to review documents. But someone with an iPad will use it every time they have more than a couple of minutes free. All that’s needed applications that let them get useful work done in those few minutes. And those typically people whose time is very valuable.

  5. Charles W. Moore

    Thanks for the votes of confidence, and also to Josh for pointing out that we don’t all have to have the same opinion in oder to have civil and thoughtful discussion of issues like this.

    To contribute a bit more grist to the discussion, contrary to the contention of those, including Steve Jobs, that the iPad will be able to do everything a netbook can do and do it better, the objective facts are that that there are a great many things that a small laptop can do that an iPad simply can’t. Netbooks can play HD video efficiently thanks to supporting Flash which the iPad doesn’t, they can multitask which the iPhone OS used in the iPad doesn’t support, many can video chat with webcams of which the iPad has none, they can run a full-fledged operating system, they can upload photos from a camera without mucking about with a USB adapter dongle — most netbooks have 2 or even 3 USB ports standard, and store more than 64GB of data (let alone the paltry 16 MB in the base $500 iPad) — even some basic netbooks these days ship with 160GB hard drives; they can support Skype and VOIP and support optical drives — either built in or peripherally connectable via USB, they have real keyboards and pointing/clicking input, (iPad’s optional keyboard dock can’t be used for lap typing there’s no mouse input capability at all — no Bluetooth, no USB — it’s touch or nothing), most support at least some hardware upgradability — especially for RAM and data drive capacity, neither of which is supported by the iPad. In short, netbooks can be used as practical platforms for writing, photo editing and publishing, and the iPad can’t.

    I think there could well be a big market niche for the iPad, and I hope there will be, but it’s no substitute for a laptop.


    • Since WHEN did Steve Jobs say the iPad can do everything a netbook can? (Hint: He did not.)

      Your strawman argument is typical of the people who simply do not get what the iPad is. And it’s getting ridiculous that people keep trotting out the same old lame memes to attack a device they’ve never even laid hands on, and certainly do not seem to understand what Apple is trying to do with it.

    • Well said Charles.

      And Eric, no one claims Jobs explicitly said the iPad can do everything a netbook can. However, he has done nothing but bash netbooks then releases the iPad claiming it is between the iphone and the Macbook. Such actions can be seen as him believing the ipad is meant to challenge the netbook.

  6. Now, an Apple-produced Netbook (assuming Apple wouldn’t cripple Flash or other Internet necessities on it) would actually be a product I’d be game for buying, unlike the iPad.

  7. The only reason netbook sales are exploding is because people are buying their 2nd or 3rd crummy netbook to replace the previous netbook that is messed up after only 6 – 12 months of use. It’s the Walmart buy cheap, dispose when broken consumer mentality. People think they are buying cheap, but if you plot $ versus time, they are actually paying more than if they had bought quality merchandise in the first place. It’s a poor bargain and I’m glad Apple doesn’t play this game. There’s no new behavior here – before netbooks it was hapless users buying their 2nd, 3rd, 4th $500 desktop after the previous model became a doorstop.

    • Jason Harris

      This is ridiculous. There are many valid complaints about netbooks being slow or hard to type on, but you’re completely pulling that out of thin air. They’re selling like hotcakes because at the price point, plenty of people would like a more portable internet browsing machine. Or they’re buying a new computer for their kids who they don’t want to break a $1500 laptop.

      This goes back to my point above about a perceived “quality” that is nebulous at best. Especially since most NetBook models have been out for maybe a year.

      Check out the next post on TAB about Apple devices having hardware failures btw.

  8. Jason Harris

    I’m glad to see some discussion here that isn’t just blatant Apple praise…

    I think the iPad is Apple’s entry into the netbook arena, and I’ve said my feelings on the iPad many places….I think a $500 iPad will always be a hard sell next to a $300 netbook for most people.

    As this thread is also evidence of, Apple users tend to very strongly feel like their brand should stay “premium”. It’s elitist, but it works. The fact is, there’s very little difference between a MacBook and a Dell or an HP running the same hardware, outside of the OS and styling. But the illusion of “premium” is why these devices can keep selling for so much. People want to show off their big glowing Apple at the coffee shop. They want to say “i use a Mac!” with the same pride that someone might say “I drive a Mercedes!” They’re status machines.

    This also justifies why they’re not in a hurry to add the functionality to the iPad that so many people are craving…the message is here…if you want that, buy a MacBook! The PREMIUM machine! These cheaper devices are limited, see?

    There’s always going to be a market for people who like the status of the device….just like there are always going to be people buying BMW and Mercedes, no matter if Hyundai comes out with a car just as good or not. But without that, Apple doesn’t have much in the computing market. So I doubt they’ll ever make a proper entry into the netbook range.

    If they sold a proper Apple for $400-500, the people who have deluded themselves that Macs are “nice” computers and other computers are “cheap” might have to get a reality check. And then they’d stop buying $1500 MacBooks. Gotta maintain the premium image unless they want to stop charging the premium price.

    • You’re probably right in that a $500 iPad will be a hard sell next to $300 netbook (unless the person actually spent some time testing the systems out), but I’m willing to bet that a majority of the people who buy the iPad will be highly satisfied with the product. Conversely, a majority of those who buy the netbook, will more than likely not be satisfied.

      The whole elitist notion is a false one as well. I don’t buy Macs because I want to feel special or be different, I buy them because I can tell the difference. Macs simply work better for me, they always have. I’m perfectly capable of using Windows or Linux, but using a Mac just feels better.

      Apple charges a premium because they invest in a lot of the technologies in their computers. The cheapest computers on the market are nothing more than systems completely assembled from mass-market, “off the shelf” components.

      No other manufacturer can say they develop their own OS, design their own motherboards, develop their own battery sub-systems, design their own silicon, spend so much time designing better case designs and manufacturing processes, run their own retail stores, make so many support options available to their customers, etc. …And most of all, pay attention to the details. It’s all of these things that make Apple’s products premium. That’s not a false perception, it is what makes all premium brands “premium”.

      If you only look at material costs, then yes, you are correct, all computers are pretty much the same. But most products are more than the sum of their parts.

  9. Ben Drucker

    I’ve come to expect more from The Apple Blog than this. Netbooks have no margins and they suck at doing things people want from portable computers like playing video. As the comments dictate, no Apple users want this, since they know it would be kick off the decline of the company. The Apple Blog should be embarassed for publishing something so lacking in quality or thought.

    • The purpose of the article was to spur conversation and discussion on the topic. Charles (the author) has an opinion and so do you…they don’t have to be the same opinion.

      Just because you don’t share the same opinion as Charles has nothing to do with quality or thought.

    • Err, I’m an Apple user and I’d like this. Netbooks are very useful for most general tasks, and the ION-equipped ones provide very good video. Unless you’re an Apple investor, their margins aren’t your problem. Their prices on the other hand are. With margins of 40% (4 times the industry average) and R&D of only $1.5 billion, saying that making more affordable products will kick off the decline of the company is laughable.

    • Ryan Thompson

      The author does have an opinion, and the poster has an opinion that Charles opinion is flawed. Considering how well Apple is doing in this recession, one must concede that they are doing something right.
      Since there isn’t a lot of evidence that low margin PC’s actually make money, the quality of the post does comes into play. I don’t think that it’s Apple that’s missing the boat.

  10. It seems rather obvious that Apple could make a solid netbook for $500-$600. If they are making the regular macbook for $999 and making a pretty nice profit off it then why can’t they make a Mac with a smaller screen, little less ram, little less powerful graphics and knock $200-$300 off?

    Apple could definitely make a decent netbook, but they might not make the amazing profit off it they are used to. But on the plus side if they made a cheaper netbook they might nab a bigger presence when it comes to computer sales, which might make more consumers consider mac when it comes to a more powerful machine.

  11. No, I don’t wish Apple would build a piece of crap like a Netbook. People don’t use them for any other reason that they are cheap enough to buy one just to have around for when you’re too lazy to use a real laptop.

    Everything the iPad does, it will do far better than a Netbook. And things the Netbooks do that the iPad won’t, they will not do _nearly_ as well as a regular laptop will.

  12. iphonerulez

    The netbook is the loss leader in the computer industry. Why would Apple want to enter the race to the bottom just for a tiny gain in market share? As an investor, I’m glad Apple is missing the boat in selling netbooks. When Apple sells the iPad, it will probably be clearing in profit what a really cheap netbook is selling for. Netbooks serve a purpose for handling e-mail and browsing and doing other light work. Sure, a few geeks want to stuff Microsoft Office on them and multitask so they can brag that the netbook is the ultimate road warrior device. Good for them. I’m sure there’s some pride in taking the slowest and cheapest denominator and getting some use out of it.

    I’m not looking to go that way. I’d rather use a more powerful laptop if that’s the case. The iPad will appeal to the low-tech user who only expects the device to do certain things very well. It’s not for computer geeks. It’s the consumer that’s going to decide whether to buy a netbook or an iPad and they have a choice. What I’m looking for in a device has nothing to do with a low-tech consumer. I think the iPad is best for them. We’ll only know their decision when the iPad ships.

  13. It’s Apple’s contention that all those people who are currently buying netbooks are really looking for a device like the iPad. They aren’t talking about the 1% who are geeks and buy netbooks to install different OSs and make them ultra portable workstations…they mean everyone else (the VAST majority). Apple making a netbook would undermine the whole point of making an iPad.

  14. In Steve Jobs words “we can’t make a sub $500 computer that doesn’t suck” or something along those lines. If you are willing to sacrifice quality for a lower price… apparently windows and the hardware that tends to run it is made just for you. That’s all netbooks are… I’ve used them and performance is pitiful… Apple DOESNT WANT to be in that kind of a market, and I am one of their customers because of their high standards.

    I never had read a whole lot on this site before, but with this article you’ve lost any credibility as an true “Apple Blog” in my book.

  15. Apple sells a netbook – it’s called the MacBook Air. The only difference is that Apple sells the smaller size and lower power=longer battery life as premium features rather than excuses to drop the price into the bargain bin range.

    If what you actually want is just a really cheap laptop then move along, Apple doesn’t do cheap.

  16. “More pointedly, don’t you wish Apple would build a netbook Mac like this?”

    To be honest? Not particularly, at least not personally. I have a 13″ MacBook Pro that serves me fine and fits in my bag comfortably, so I don’t really need a 10″ computer that can’t do what I might need it to (though the MacBook Air knockoff mentioned here is the full 13″). For times where I don’t want or need to take my MBP with me, I have an iPhone, which can handle the typical mobile web/email access I need. If I still want something else, I can bring something more specialized. For me, a netbook isn’t necessary.

    That said, I can understand why Apple is hesitant to release a netbook, considering the study last June that indicated that a high proportion of netbook users are unsatisfied with their purchase and that this might stem from the fact that most (6 out of 10) consumers asked admitted that they thought netbooks were the same thing as notebooks before purchasing the former. Apple and Steve Jobs are concerned with the company’s image, as imperfect as it is, and Jobs has made clear his aversion to selling “incomplete” devices (his term, if I’m remembering correctly) that would invite such dissatisfaction. The iPad, for better or worse (I’m firmly in the middle as someone who thinks it’s interesting but isn’t going to buy one), will be as close to a netbook as Apple gets, I think.

  17. Yeah, what margin can there be on a $250 netbook? Apple is just not in that business. They make more on an iPhone than they would make on two netbooks, so why bother?

    HP and Dell would love to have Apple’s margins, that’s for sure.

  18. cgdavilab

    Yes, a machine like this is apealing, but until I can justify me spending over $1000 on a laptop that performs just as well as my two HP minis that I have at home RUNNING Mac OS X 10.6, I will stick to that. lol

  19. Netbook sales exploded, but how many of those netbooks were purchased instead of a regular laptop? PC manufacturer margins are already thin. Selling $250 computers only makes them thinner.

  20. crucialwax

    Why race to the bottom? What folks fail to see is that this is actually helping Apple dominate the higher end market. People who want cheap, get cheap. People who want quality, and are willing to pay for it, are choosing Apple. Who dominates the 1000+ market? There’s a lot of profit up there.

    • You nailed it. Too bad the author of this post is way off base thinking, “fumbled the ball in not offering a netbook”.

      Have a look at AAPL 10Q. Which one? Pick one. They’re all the same – stellar!

      Given Apple and SJ’s performance (see Times CEO of the decade), I’ll put my money on AAPL and not some opinionated blogger.