Apple to introduce more affordable Macs, sources say

[AppleInsider]

Determined to grow its share of the personal computer market during the worst economic climate in its corporate history, Apple is tailoring changes to a pair of its offerings that will help drive down prices of some of the most popular Macs, AppleInsider has learned.

Word of the changes comes just weeks after Cupertino-based company became the target of a renewed advertising blitz from rival Microsoft Corp., which is using a new series of controversial television spots to cast Macs as overpriced novelty PCs that command a premium purely for their distinctive aesthetic.

Still, people familiar with the matter say Apple's move towards more affordable Macs isn't so much a response to Redmond's marketing antics as it is an interim solution to combat the proliferation of budget notebooks -- often called netbooks -- until the company is ready to introduce its own take on the market in the much rumored Newton-like web tablet, a project which is taking considerably longer to complete than once anticipated.

Those same people maintain that the Mac maker has absolutely no interest in catering to the netbook market as it exists today, which -- as interim chief Tim Cook repeatedly points out -- is comprised of systems with "cramped keyboards, terrible software, junky hardware, very small screens, and [a poor] consumer experience."

While the tiny notebooks aren't threatening Apple's capacity to profit from its Mac business, the Windows-based systems are for the first time this year showing signs of hampering the company's potential for share gains and serving as a pesky reminder that the highly-competitive PC market isn't boundless, especially given the current economic climate and subsequent pullback in consumer spending.

For the three-month period ended March, Apple announced that Mac units contracted by 3 percent, signaling the first time in nearly 6 years that the growth of its personal computer business reversed course on a year-over-year basis to see growth fall into red figures. Consequently, market research firm Gartner estimated that the company's share of the U.S. PC market slipped 10 basis points to 7.4 percent.

Though the fall was marginal at best, it was the second time in as many quarters that Apple watched its share retreat while netbook maker Acer posted unit shipment growth upwards of 50 percent and beyond. As such, the company plans to institute changes that will rekindle growth and help it better contend against a barrage of cheap netbooks, all without devaluing the customer experience that had previously driven Mac growth for 23 straight quarters.

More specifically, consumers in the coming months can look forward to more affordable versions of both the 13-inch MacBook and iMac, according to people who've proven extremely reliable in predicting Apple's future business directions. The MacBook -- which currently starts at $999 when fitted with a previous-generation polycarbonate enclosure and $1299 in an aluminum unibody casing -- is the bestselling Mac in terms of volume. The iMac is the most popular Mac desktop.



While exact pricing is unclear or still undetermined at this time, the Mac maker earlier this month quietly flaunted its capacity to deliver a premium system at near recession pricing when it began offering educational institutions a 2GHz, 20-inch aluminum iMac for $899. Even when priced at a $100 to $150 markup for the consumer markets -- as Apple is more than likely eager to preserve its margins -- such an offering would make a material dent in the entry-level cost of owning or switching to a Mac.

It's believed that the first batch of more affordable Macs could turn up as early as this spring as part of a restructured MacBook line, while MacBook Pros for the most part would stay their course and benefit slightly from Intel's planned Montevina refresh, which should nudge clock speeds. This would afford Apple a means of sparking renewed interest in its portable products ahead of Intel's Nehalem-based "Calpella" mobile platform, which should land anytime between late this year and early next, and without having to tack on auxiliary features that would drive up costs at a time when the company is looking to lower prices.

Meanwhile, Apple is also gearing up for its annual back-to-school promotion in early June that should, like last year, offer educational customers a free iPod touch with the purchase of any qualifying Mac. Should the promo, which typically runs through September, overlap the introduction of more affordable Mac offerings, their combination could land an isolated yet dizzying blow to rival's efforts to portray Macs as impracticable purchases during the current economic crunch.

[ View this article at AppleInsider.com ]

[lilgto64]

Why not just have an educational pricing for all event for a weekend or a week or a month?

Then again I don't quite get how the car makers can have an employee pricing sale and then the following week expect anyone to want to buy their products at the regular price. Same thing with furniture - not that I mind paying for a quality product - but I don't spend money frivolously (well, most of the time) and after seeing year after year the "Biggest Sale of the year" or "we will never have a sale this good again this year" I can wait until next years blow out sale for any item I don't desperately need right now.

[kim kap sol]

OHHHH! So NOW they're taking this shit seriously. Thanks Apple.

PS: F U

[vinney57]

Originally Posted by kim kap sol

OHHHH! So NOW they're taking this shit seriously. Thanks Apple.

PS: F U

What on earth is your problem?

[lkrupp]

This is NOT good. I repeat, NOT good. Thus begins the slow, downward spiral to mediocrity. Do the previous posters really think Apple can produce cheap PCs like Dell without sacrificing quality, customer service, and margins? If so then you live in a fantasy world. Just imagine what a $500 Macbook would look like. It would look like an Acer of course. I'm sorry but even Jon Ive can't make a silk purse out of a sow's ear. The drive for market share also drives down margins as Michael Dell has found out the hard way. You have to keep selling more and more just to break even.

I hope the "we want cheap Macs" crowd doesn't get their wish any time soon. I would rather see Apple stop making Macs altogether before producing drab, black plastic abominations. Leave the trailer park market segment to Dell and the design-impaired nerd crowd.

[wtbard]

When I first started using my iPod touch, the first thing I wanted was a larger screen, preferably 8x11, but 5x7 minimum. I don't care what it's called. I have numerous uses in mind and they don't require a lot of horsepower. Cost would be more important so I could buy more of them.

[ascii]

If netbooks are so crappy, then they will only serve to lower people's opinion of windows, and make it more likely that they get a Mac when the netbook finally karks it.

[Kasper]

Originally Posted by lkrupp

This is NOT good. I repeat, NOT good. Thus begins the slow, downward spiral to mediocrity. Do the previous posters really think Apple can produce cheap PCs like Dell without sacrificing quality, customer service, and margins? If so then you live in a fantasy world. Just imagine what a $500 Macbook would look like. It would look like an Acer of course. I'm sorry but even Jon Ive can't make a silk purse out of a sow's ear. The drive for market share also drives down margins as Michael Dell has found out the hard way. You have to keep selling more and more just to break even.

I hope the "we want cheap Macs" crowd doesn't get their wish any time soon. I would rather see Apple stop making Macs altogether before producing drab, black plastic abominations. Leave the trailer park market segment to Dell and the design-impaired nerd crowd.

Please don't misinterpret my article. Apple isn't going to make cheap PCs. That's not what this is about. It's about marginal yet noticeably more affordable Macs on par with the company's current standards. It could be as simple as taking the current models and lopping $100 - $150 off in a few months.

I was very conscience of using the term "more affordable" rather than "cheap." I did this for a reason.

K

[hmurchison]

Good idea

Let's get back to getting Macs into homes and then augmenting these Macs with iPhones ,
iPods and Apple TV.

Sometimes it's about selling the whole ecosystem and yes MobileMe plays a vital part in Apple's future. It's the glue that's going to seal the Internet with the home LAN.

What's hard for us all to justify today is paying fat margins for computers when many of our jobs are hanging by a thread. I've already had some of my bennies reduced but I'm glad to be collecting a paycheck.

Margins and products evolve over time. Get marketshare..it "is" important.

[Virgil-TB2]

Originally Posted by lkrupp

This is NOT good. I repeat, NOT good. Thus begins the slow, downward spiral to mediocrity. Do the previous posters really think Apple can produce cheap PCs like Dell without sacrificing quality, customer service, and margins? If so then you live in a fantasy world. Just imagine what a $500 Macbook would look like. It would look like an Acer of course. I'm sorry but even Jon Ive can't make a silk purse out of a sow's ear. The drive for market share also drives down margins as Michael Dell has found out the hard way. You have to keep selling more and more just to break even.

I hope the "we want cheap Macs" crowd doesn't get their wish any time soon. I would rather see Apple stop making Macs altogether before producing drab, black plastic abominations. Leave the trailer park market segment to Dell and the design-impaired nerd crowd.

Don't panic.

I think this article is ever so ham-handedly trying to hint at changes to the marketing of the products, not Apple reducing their margins (which would lead to exactly what you are afraid of).

I would bet that they are talking about the idea of changing the MacBook so as to have a cell antenna. This would allow them to sell MacBooks with extra features (wide area wireless networking), at a lower cost than the current MacBoks (if you buy a contract with AT&T or Verizon).

Otherwise this makes no sense at all.

For an additional minor picky point, this part:

"... It's believed that the first batch of more affordable Macs could turn up as early as this spring as part of a restructured MacBook line, while MacBook Pros for the most part would stay their course ..."

Makes no f-ing sense at all. What is "the MacBook line" when you take out the pro models?
Isn't that just "the MacBook"???

I mean I know no-one like a grammar/english Nazi, but there are so many errors in every single article AppleInsider publishes now that it might be worth it to hire an editor to simply read this stuff before it's posted.

[jrandersoniii]

Apple rumors are a dime a dozen.

But if true... an iMac running around the $799 - $850 price point, and lower Mac Mini prices $100 across the board... then Apple has something for budget buyers.

Apple knows better than to cheapen up their products too much - both in price and quality.

iLife alone is worth nearly a $100 in the Mac world... and would probably take $200 - $300 in the Windoze world to (poorly) replicate.

[Roc Ingersol]

The day after Apple concedes and cuts pricing, analysts will be howling about the margins and would scream bloody murder if the price point went back up. lkrupp puts it a bit strongly, but fundamentally he's right. Price cuts are not the way to go.

That said, I doubt they're going to cut pricing. I wouldn't be surprised if the usual inventory-clearing price cuts were -pitched- as a 'recession' sale sort of thing. But I don't see why they'd do anything outside the usual playbook.

[steviet02]

Originally Posted by Virgil-TB2

Don't panic.

I think this article is ever so ham-handedly trying to hint at changes to the marketing of the products, not Apple reducing their margins (which would lead to exactly what you are afraid of).

I don't think you understood the article. It's clearly speculating that the prices of the computers will drop in price, therefor reducing the profit margin.

[OriginalMacRat]

The best move would be to start with the Mac mini. Make the entry level be $499 and include the full 4GB of memory out of the box. (Just running a web browser these days sucks up most of the resources.)

[Marketing Professor]

Not only is the "time" right given the economy, but this is a good response to the direct advertising blitz.

AAPL may be wise to adopt an approach where they sell the machines much cheaper and then make money on the software and let uses stock the machine how they want.....Vs the bundle approach. If you really want to play in the big hardware game, then you must target the "average" customer. The average customer, unfortunately, has no idea the "value" of the Mac bundle. And, I'm afraid no amt of advertising will educate them either. Therefore, break your products out and make your money back via line item pricing.

Will be interesting to see their approach....Probably will be just less specs for less money, is my guess.

[Stan_Timek]

I think some moderate pricing concessions are smart right now. Apple needs to grow market share for future performance across the board.

Stan

P.S. my son came up with an idea to help people laid-off in this economic climate. Go to http://www.giftcardsfordinner.com and please help spread the word!

[hmurchison]

Deliver a 20" Apple display with iSight with Displayport

Drop the Mac mini to $499

Drop iMac pricing $100.

Extend the MobileMe trial period to 90 days.

If someone buys a Mac and a iPod Touch give a 10% discount on the Touch

Offer free ugprades to Snow Leopard.

Lot's of marketing options and potential here. Frankly I'm sick of Wall St dictating
who's doing well when their candy asses needed to get bailed out as well.

[HazardousPaste]

Originally Posted by AppleInsider

Meanwhile, Apple is also gearing up for its annual back-to-school promotion in early June that should, like last year, offer educational customers a free iPod touch with the purchase of any qualifying Mac. Should the promo, which typically runs through September, overlap the introduction of more affordable Mac offerings, their combination could land an isolated yet dizzying blow to rival's efforts to portray Macs as impracticable purchases during the current economic crunch.

Just wondering why, in the article, this is linked to a 2008 news release of the back-to-school promotion? While this is likely for 2009, it's not official.

[Dr Millmoss]

I've got to disagree with the concept of "recession pricing." There's really no such thing. If the cost of goods fall broadly, this is called deflation, which is a precursor to depression. We may have gotten used to the idea that the cost of technology declines over time, but this is the natural order of things for this particular good, not "recession pricing." You normally won't find companies lowering their prices, even in a recession, unless their costs of production decline -- and if costs of production start plummeting, watch out!

[guppy737]

Look, I'm typing this on a Samsung NC-10 that cost $399. I upped the RAM from 1 to 2 GB for something like $12. I am very happy with this netbook for what it is and it certainly isn't the proverbial "a piece of crap" Steve Jobs was talking about.

Apple had better get in the game with something, otherwise they will lose market share. Phil Schiller won't admit it, but you know he's concerned. They will introduce something soon, but it won't be a run-of-the-mill netbook because all they have done is trash talk netbooks. As is common with Apple, it will be something that fits the target market but it will have a slighly different, improved flair to get people's attention. And it will cost more money.

[al_bundy]

Originally Posted by lkrupp

This is NOT good. I repeat, NOT good. Thus begins the slow, downward spiral to mediocrity. Do the previous posters really think Apple can produce cheap PCs like Dell without sacrificing quality, customer service, and margins? If so then you live in a fantasy world. Just imagine what a $500 Macbook would look like. It would look like an Acer of course. I'm sorry but even Jon Ive can't make a silk purse out of a sow's ear. The drive for market share also drives down margins as Michael Dell has found out the hard way. You have to keep selling more and more just to break even.

I hope the "we want cheap Macs" crowd doesn't get their wish any time soon. I would rather see Apple stop making Macs altogether before producing drab, black plastic abominations. Leave the trailer park market segment to Dell and the design-impaired nerd crowd.

like my wife's iphone and will probably get one this year for myself, but mac's are overpriced

99% the exact same hardware as PC's except they cost more. they are even made by the same companies in asia that make PC's
the difference is the price of OS X Apple charges.

MS charges you less for an OEM copy of windows and Apple is the exact opposite.

it's not like the old days when computers cost a lot of money and you bought one to last. technology moves fast, computers are cheap, cell phones are cheap and it makes sense to buy something cheaper and dump it in 2-3 years and buy the new thing that's out.

most people don't care that an imac has a better quality LCD than a Dell and that you have to upgrade the LCD on the Dell to get the same one. most people will never notice the difference

[justflybob]

Originally Posted by jrandersoniii

Apple rumors are a dime a dozen.

Actually, due to Apple's premium pricing, wouldn't it be more like 3 for $1?

[Wil Maneker]

My estimation is that Apple will provide a lower entry point for the consumer products and have all component upgrades trickle down through the highest entry point for the Macbook and iMac. Margins will be nearly-sustained by delivering a product containing lowest-tiered components.

This will contribute to staving off market base deterioration while potentially aiding more interested "switchers" into purchasing into the Mac platform.

When the economic conditions improve and buyers become less price sensitive Apple can drop this lowest entry point, moving back to its previous pricing model and increase its profitability (not in terms of margin, in terms of $$)

[justflybob]

Originally Posted by HazardousPaste

Just wondering why, in the article, this is linked to a 2008 news release of the back-to-school promotion? While this is likely for 2009, it's not official.

That's probably why they are called rumors.

[hmurchison]

Originally Posted by al_bundy

MS charges you less for an OEM copy of windows and Apple is the exact opposite.

How much is Apple charging you, say for a 5 license family edition, of a new OS versus Microsoft? Microsoft's cost of entry is low bundled with a computer but Apple's solidly ahead when it comes to upgrading future computers IMO.

[anantksundaram]

Originally Posted by Stan_Timek

I think some moderate pricing concessions are smart right now. Apple needs to grow market share for future performance across the board.

1) The trouble with 'pricing concessions' is you can't make it go the other way when the economy improves.

2) Can you explain why "Apple needs to grow market share for future performance across the board"? What is wrong or suboptimal with their performance now?

[Wings]

So the much rumored Newton-like web tablet is "a project which is taking considerably longer to complete than once anticipated."

If you don't read carefully you could easily go away thinking that Apple is having a hard time getting this thing off the ground, when they haven't even acknowledged that anyone has yet to pick up a soldering iron.

[Marvin]

I'm skeptical because they already said this the last time round. Apple specifically said they were cutting margins. It may have been due to the recession that they changed their minds but I'd say right now that their prices are way too high. A move to cut prices will only bring them into normal pricing range, which is still high in these times when products should be priced below normal.

Instead of £949 for a dual core with a 20" screen and integrated graphics, it should be £799.
Instead of £929 for the aluminum Macbook, it should be £799. and the white one at £599.
The Macbook Air should be £999 instead of £1271.
The MBP should be £1299 instead of £1369.
The Mini should be £399 but could be £449 instead of £499.
The Mac Pro entry level should be £1499 not £1899 but I doubt that will change.

Price drops are always good but inflating your prices first and then dropping them doesn't really change much. Even with these changes, they are still a target of Microsoft's advertising.

Apple currently don't have a quad core processor under £1900 whereas you can buy a PC quad for £500 - that's bordering on 1/4 the price. I don't think cutting prices on the current model spec by a small amount will do much to change their reputation of having few options and high prices for those options unless they address both those points.

For example, not always using the highest spec parts in their machines for that target market. Some people might not need an iMac with 2.66GHz processors so drop $110 off the price and sell one with 2.26GHz and aim to push the entry point below $1000.

The PC industry understands that people who pay for cheap machines can generally get by with lower performance. At every update, Apple pushes the latest hardware at the same or higher pricing and seems to ignore people's needs.

I'm personally against Celeron processors a lot but they are still $70-80 instead of $250-300. People who do the basic laptop stuff like browsing, email, word processing etc will get by with a 1.7GHz Celeron if they managed with 1.5GHz and less powerbooks coupled with 9400M graphics. Shaving $200 off the bottom end for people who want a well-built computer and don't care about the highest performance would be a good move.

[anantksundaram]

Originally Posted by lkrupp

This is NOT good. I repeat, NOT good. Thus begins the slow, downward spiral to mediocrity. Do the previous posters really think Apple can produce cheap PCs like Dell without sacrificing quality, customer service, and margins? If so then you live in a fantasy world. Just imagine what a $500 Macbook would look like. It would look like an Acer of course. I'm sorry but even Jon Ive can't make a silk purse out of a sow's ear. The drive for market share also drives down margins as Michael Dell has found out the hard way. You have to keep selling more and more just to break even.

I hope the "we want cheap Macs" crowd doesn't get their wish any time soon. I would rather see Apple stop making Macs altogether before producing drab, black plastic abominations. Leave the trailer park market segment to Dell and the design-impaired nerd crowd.

I think you're overstating the case. Apple is not going to become 'cheap' any time soon.

[iVlad]

Apple is just gonna apply educational discount to all computers and stop giving further educational discount to students. That's how they make it look like they lowered prices when in reality they didn't.

[Bregalad]

Dropping prices doesn't necessarily mean sacrificing margins. If Apple can get lower component prices from their suppliers they can cut prices without altering margins.

Based purely on observations as a customer and reading Apple financial reports I surmise that the following is the normal case in the PC world:

1. Apple negotiates long term supply contracts at a favorable, but fixed price. Thus the price of a given Mac remains the same for as long as a year, until Apple replaces it with a new model.

2. PC makers negotiate shorter supply contracts from multiple sources and play them against each other to get the best possible deal. As component prices drop (as they always do) the PC makers cut their retail prices accordingly. If they didn't their competitors would undercut them and steal sales.

So over time a Mac that was a pretty good deal when it first came out starts to look increasingly over-priced compared with similar hardware in a black case.

If Apple has decided to start playing the HP/Dell/Acer/Toshiba/etc. game of short term supply contracts they could conceivably take advantage of the drop in component prices and thus be able to lower the retail price of their Macs without it affecting margins.

The current economic climate seems ripe for someone with a huge pile of cash like Apple to approach struggling component makers and make them an offer they can't refuse.

[Mario]

Originally Posted by lkrupp

This is NOT good. I repeat, NOT good. Thus begins the slow, downward spiral to mediocrity. Do the previous posters really think Apple can produce cheap PCs like Dell without sacrificing quality, customer service, and margins? If so then you live in a fantasy world. Just imagine what a $500 Macbook would look like. It would look like an Acer of course. I'm sorry but even Jon Ive can't make a silk purse out of a sow's ear. The drive for market share also drives down margins as Michael Dell has found out the hard way. You have to keep selling more and more just to break even.

I hope the "we want cheap Macs" crowd doesn't get their wish any time soon. I would rather see Apple stop making Macs altogether before producing drab, black plastic abominations. Leave the trailer park market segment to Dell and the design-impaired nerd crowd.

Yes, indeed.

[sflocal]

Originally Posted by kim kap sol

OHHHH! So NOW they're taking this shit seriously. Thanks Apple.

PS: F U

I thought this guy was banned not too long ago for seriously shooting his mouth off? Guess he didn't use that time wisely to think things through has he?

Kasper.... are you catching wind of this?

[Hudson1]

Originally Posted by jrandersoniii

Apple rumors are a dime a dozen.

But if true... an iMac running around the $799 - $850 price point, and lower Mac Mini prices $100 across the board... then Apple has something for budget buyers.

Apple knows better than to cheapen up their products too much - both in price and quality.

iLife alone is worth nearly a $100 in the Mac world... and would probably take $200 - $300 in the Windoze world to (poorly) replicate.

I think this is getting carried away here. It's unlikely Apple is going to drop the price of what is already their lowest cost computer by $100. Education discounts are only half of that amount on the mini.

As for iLife, there's no way many people would actually pay $100 for that software suite. iTunes is free, iPhoto has replacements that are free (though not as good) either from camera makers or Picasa, few people use Garage Band. iMovie would be the one that has the most true value. But most important, Apple only charges $79.

[Mario]

Originally Posted by al_bundy

like my wife's iphone and will probably get one this year for myself, but mac's are overpriced

99% the exact same hardware as PC's except they cost more. they are even made by the same companies in asia that make PC's
the difference is the price of OS X Apple charges.

MS charges you less for an OEM copy of windows and Apple is the exact opposite.

it's not like the old days when computers cost a lot of money and you bought one to last. technology moves fast, computers are cheap, cell phones are cheap and it makes sense to buy something cheaper and dump it in 2-3 years and buy the new thing that's out.

most people don't care that an imac has a better quality LCD than a Dell and that you have to upgrade the LCD on the Dell to get the same one. most people will never notice the difference

Right, if you don't see the value in well put together hardware (just find me a PC from any manufacturer for ANY price that has a nice, sturdy, quiet work of art case, power supply, and cooling soluton as my Mac Pro), then you are not the target audience for Apple.

[Frank777]

The Mini and iMac are fine. Apple just needs a tower you don't have to mortgage your house to buy.

[Dr Millmoss]

Originally Posted by anantksundaram

1) The trouble with 'pricing concessions' is you can't make it go the other way when the economy improves.

Exactly. Apple isn't going to completely realign (or even partially realign) its product mix due to temporary economic conditions. It's not like Taco Bell offering a 99¢ taco for people who are going down-market on their eating out this year. If Apple moves its pricing structure downwards, it will reflect competition and cost of materials, not the recession.

2) Can you explain why "Apple needs to grow market share for future performance across the board"? What is wrong or suboptimal with their performance now?

Not much. Apple has become very good at addressing the market they know how to address. A lot of companies would certainly like to figure out how to be so suboptimal!

[hmurchison]

Originally Posted by Hudson1

As for iLife, there's no way many people would actually pay $100 for that software suite. iTunes is free, iPhoto has replacements that are free (though not as good) either from camera makers or Picasa, few people use Garage Band. iMovie would be the one that has the most true value. But most important, Apple only charges $79.

In his defense he did say that replacements would be poor replications and Picasa is surely a poor replication of iPhoto, GarageBand is similar to something like Fruityloops and iMovie 09 is becoming the movie editor for the masses. I still think iLife is the best suite out there and I want to see more innovation applied to it.

It's hard but Apple gives people the tools to be creative which is basically swimming upstream because we are condititioned to be consumers but not creators by default.

[Mr. Me]

Originally Posted by Virgil-TB2

...

I think this article is ever so ham-handedly trying to hint at changes to the marketing of the products, not Apple reducing their margins (which would lead to exactly what you are afraid of).

...

Makes no f-ing sense at all. What is "the MacBook line" when you take out the pro models?
Isn't that just "the MacBook"???

...

Well, there is the MacBook Air. ...

Actually, I could not agree with you more. Apparently Apple has something up its sleeve. The OP doesn't know what it might be. He also has no clue how business works.

• It is a pipe dream that reducing Apple's prices will significantly increase its marketshare.
• It is a pipe dream that Apple can sell lower-priced product without sacrificing quality.
• The Wintel manufacturers operate on a different business model than the Mac.
• The Wintel manufacturers are only marginally profitable if at all.

The key to Apple's success is category-breaking products. At $800 for the 8 GB model, the iPhone was the most expensive phone to customers on the market in June 2007. It flew off the shelves. AT&T dramatically increased its subsidy, but the iPhone's unsubsidized price remains high.

We have a dramatically different economy now than we had in 2007. Price can't be so high that potential customers can't afford Apple's products. However, customers have shown themselves to be willing to buy products that are worth the money. If the product is not desirable, then customers won't buy no matter how low the price.

[sflocal]

Originally Posted by ascii

If netbooks are so crappy, then they will only serve to lower people's opinion of windows, and make it more likely that they get a Mac when the netbook finally karks it.

Windows already has a low opinion. It's just accepted that way by the masses. The same can be said (in the US) about the cell phone market too before Apple came into the game.

If Apple plays their card right and introduces a quality product that is reasonably priced it, they will take the market too.

I agree with Cook. The current netbook market is utter crap. I've used the machines, and my company even bought a few thinking they were a good deal for the mobile force. They ended up gathering dust on a shelf due to the crappy quality and performance. That's what happens when people focus only on low-cost.

Apple is excellent at a high-quality user experience. Make a table/netbook with an expanded iPhone/Touch OS or streamlined OS/X that would be used for regular Internet/Email/WP and maybe photo-album stuff, I could think of a lot of people that would want that.

The next 12 months will be really cool to see.