By Seb Janacek, 4 March 2009 16:03
COMMENT
So why hasn't Apple jumped on the netbook bandwagon? Seb Janacek has a few ideasÂ…
As netbooks continue their inexorable rise up the wish lists of gadget hounds, businesses and ordinary folk alike, the clamour for Apple to join the market continues to increase from all sides.
That's despite both Steve Jobs and interim CEO Tim Cook categorically denying that Apple is about to enter what has been described as a 'nascent' market.
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Jobs has also suggested that the iPod Touch and iPhone is in essence a kind of netbook, based on what they are commonly used for. He's not fooling anyone though.
Starting from essentially zero market penetration in late 2007, by the end of last year, roughly 10 million netbooks have shipped, according to IDC. They now account for seven per cent of all portable PCs, an extraordinary growth rate in a short time.
So what defines a netbook?
Jobs may have a point in that the Touch is great for web browsing and email, is lightweight, has wireless and is relatively cheap.
It's not ideal for office or productivity tasks. I'm a fan of the soft keyboard and will happily 'tap' out a hundred words or so of an email but a longer document is painful.
But at what cost? It's a loaded question.
Firstly, as Jobs claimed late last year, Apple doesn't know how to make a $500 Mac that 'isn't a piece of junk', as it's not in the company's DNA. Consider the current Mac Mini. A mere $100 above the $500 price point and it looks overpriced, probably because it is.
Secondly, Apple would undoubtedly sell bucket loads of shiny units if it did release a sub $500 OS X-powered netbook.
However, given the company would be competing in an aggressive and increasingly populated market with price being the key differentiating factor, its margins would be cut and its profits would suffer. An anathema to the Apple board.
Furthermore, sales of netbooks would cannibalise sales of higher margin, higher specification MacBooks, again resulting in more loss of profit.
Lest we forget, Apple has somewhere in the order of $28bn in cash thanks to its aforementioned high profit margin strategy and is well placed to sit out tough economic times and come out smiling the other side without compromising the same strategy.
Appealing to a customer who focused solely on price makes no sense to Apple. Someone who cares solely about price has a casual interest in quality and that is another anathema to the Apple brand.
Perhaps the very best reason to explain why Apple isn't bothering with netbooks for the time being was illustrated in a report from retail analysts Channel Checkers.
The firm surveyed Apple stores to track sales of iPod and Macs along with business trends at Apple stores in the US. According to their survey, 73 per cent of respondents said the top-selling computer was the MacBook Pro.
The top selling Mac in most Apple Stores surveyed was the high end MacBook Pro. The highest specification notebook Apple produces. In the US it retails between $2,000 and $2,800. Hardly low-cost netbook territory.
As we stand there are two reasons Apple isn't selling netbooks.
Firstly, Apple doesn't make netbooks because it can't work out how to make a notebook that can compete in that $500 space.
Secondly and more importantly, Apple doesn't make a netbook because, right now, it doesn't need to.
Comments
There are 4 comments. Join the discussion
1. Simon Allen
I agree that Apple does not need to make a Netbook and probably will not. But the statement:
"They now account for seven per cent of all portable PCs, an extraordinary growth rate in a short time." must be replied to.
The growth is entirely UN-extraordinary! From the moment that the Netbook format appeared it was obvious that it was going to be a winner.
For years people have been trying to make this format work and could only do so by using non-standard PC components and operating systems. Amstrad made the NC range over 15 years ago and both Toshiba and Sony have been making A5 notebooks for years but at a premium price.
Netbooks were always going to happen, as soon as the price dropped and in the recession it is the answer.
2. Ant Norris
I think Apple are missing a really big trick here. While I'm not a Mac owner I've had experience with them, and I'd say (currently) their OS is one of the best out there, in terms of usability, speed and aethetics, however, it's lacking something, users. Depending on what stats you look at Apple are roughtly 5% of the market and it's all against Microsoft, even with a poorly received Vista, Apple aren't making a huge headway with their OS. And with $2000+ Mac Books they are not going to, it will stay in a niche market for those who 'can afford' a Mac (no one is convinced by the new Mac Mini). And especially in these belt tightening times expensive Macs are going to be heading down the list of priorities or experimental migrations. But here is my point (finally), netbooks for Apple, while certainly not a big earner in the short term, would be a huge earner in the long term as they would get many younger users and inquisitive users to start using the OS at an affordable price, and once there it would be an easy upsell in the future as they start earning more money, need more computing power, etc. Microsoft sold many copies of Vista not because it's a good OS, but because Windows is what everyone is used to.
So Apple get them while their young, for the long term it makes sense to produce a netbook.
By the way, if you do a search on Google for Dell OS X you can see the new Dell Mini 9 netbook happily runs the Apple OS with all the bells and whistles operating on it, so it can be done.
3. Karl Meyer
As an owner of one of the first ever 'netbooks' (a toshiba libretto running W95) I can understand both the advantages and disadvantages of the format. For travelling it was perfect (and got envious stares whenever I used it to drive powerpoint aat conferences) but for typical usage it still needed a separate screen and keyboard. The screen size was just too small and the keyboard was too slow to type fast on.
An Apple netbook would cannabalise the existing market too much and Apple simply aren't used to working at such low margins.
That said I can see a point in Apple reusing previous generation HW to build one in a year or so.
4. David
They have made a netbook - it's called a mac book air. Although it has less features/ports than most netbooks and costs 5 times more ;)