Apple Still Needs a Sub-$700 Conventional Notebook

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 (s intc) 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 (s aapl) 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 (s nvda) 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!