The first thing that came to mind here is why any rational person would buy a laptop for time card processing and other stationary computing tasks? From my perspective this is an example purchasing the wrong hardware for a given task.
A cheap desktop PC is bulky and possibly noisy. Not to mention if you want to move the thing, you have to unplug a lot more stuff. You'd be hard pressed to find a new desktop with warranty that cheap anyway.
I found one for £222 in a quick search without a display. A cheap display would run about £50 so £272. A netbook can be bought for under £250 and will be cheaper to have delivered.
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Originally Posted by wizard69
the display $65. All the rest of the crap isn't going to add up to much more $100. Apple could potentially make more than $200 off every machine.
The display is the main issue I see for Apple. They emphasized that shrinking the display was not a compromise they wanted to make. For them to now make a machine with a 10" screen means a reversal of that.
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Originally Posted by wizard69
Remember the other netbook makers are making a profit right now. Since Apple builds in a bigger profit margin and people here are completely willing to pay $500 dollars for a Apple netbook, they won't have a problem.
Since Asus sell their Nvidia model at $660, I could see them aiming closer to $699 as they'd include isight and all the other little sensors and things they put on their machine. They'd basically be taking the Macbook, shrinking it, using the Ion platform and a smaller display. A $300 saving over the base Macbook is a decent drop in price.
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Originally Posted by wizard69
For all the love of Atom I'm still thinking that Apple will come up with an ARM based system simply because of it's much lower power usage.
Frankly I don't see a lot of innovation in the current crop of netbooks. All Apple needs to do is integrate some tablet technology with some state of the art battery tech and they could have a machine that could run for days.
A tablet idea would be great but it's not possible for ARM to be in the picture. Netbooks are popular because they run full operating systems and apps. If Apple go with ARM, no OS X software will run. It has to be Ion or nothing.
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Originally Posted by timmillea
Bets on a netBook release - March, July or October? or Never?
The day after the Cube makes a comeback. I'd say Wednesday.
The current lineup needs a refresh ASAP, but if Apple go for the green Q8200 then we're looking at February 24th at the earliest for iMac and Mini updates. The Mac Pro should come sometime in March. This leaves April, May, June. Refreshed iphone should be announced in June.
I don't think Apple would offer a netbook with single core Atom so they'd wait until Intel had the dual core ones. But Intel aren't too happy with Atom processors and are holding them back as they don't make much profit on them. The even put them down saying they are half the speed of Celerons and people shouldn't want to buy them. I imagine Intel and Apple would have some sort of mutual agreement to avoid using them in mainstream computers.
netbooks are targeting cheap access, prices like 300$ the disposable pc, when i read about people that have one, they comment that they use online server based services so if it breaks stolen or lost no big deal, its easy to replace unlike my "_________" fill in the blank
i don't think in all reality a netbook is chosen to run photoshop regardless of speed,
I don't think Apple would offer a netbook with single core Atom so they'd wait until Intel had the dual core ones.
I thought dual-core Atoms have been available since January and that, according to the 'vine, Apple had them at least one month before.
I agree with another poster in a related thread that something has been amiss with Apple of late. It looks like several products have been pulled, delayed or rehashed at short-notice and we are yet to see the very late results. E.g., what happened to the forecast reduced margins due to a major product shift stated around 7 months ago in the financial conference call? No shift has taken place and margins were actually up in the most recent results. I am certain there are many great Apple products currently in the pipeline but I would love to know the inside story of all the apparent recent delays.
I keep reading arguments why people want a Mac netbook.
Sure, I want a $499 Mac notebook too! Count me in!
But why should Apple release one? What's in it for Apple? I have yet to read a good reason.
Every netbook sold is a potential MacBook sale lost. Of course there will be people who'd never opt for a more expensive MB. But there will also be a lot of potential MB buyers, who have the money and are willing to spend it, but in the end decide a $499 netbook will do just fine.
From current profit margins every MB sale lost requires at least 3-5 netbook sales to make up for it.
But this means doubling or tripling current Apple notebook sales!
And that is totally unrealistic.
And if Apple cannot attract such an increase in laptop sales, the introduction of a Mac netbook will overall result in less profits!
So why should Apple do it?
They won't.
Probably everyone else in the computer industry earns lower margins on their laptops. They don't need to sell 3-5 netbooks for a single laptop sale lost.
And they are also likely after market share as well, which Apple isn't.
Two scenarios where a Mac netbook could make sense for Apple:
- As 'entry drug' into the Mac market.
But the iPod/iPhone already serve that purpose.
Also one could argue that most of these people will never buy a Mac anyway (as it will always be too expensive). That $499 sale for one Mac netbook will likely be the only money they will ever spend on anything Macintosh.
- If Apple can eek out more money through accessories.
Apple makes a lot of money from iPod/iPhone accessories because in people's minds these don't count as part of the original purchase price. Also they make nice gifts so people buy them for others.
If Apple can develop a netbook that has a similar accessory universe they might make enough money overall in the end.
When will Apple release a Mac netbook?
Simpe: once MacBook and MacBook Pro sales drop dramatically - because everyone buys netbooks from competitors.
But last I looked Apple's notebook sales figures are still on rise...
In any other scenario Apple would only shoot themselves in the foot. Just because consumers want them, doesn't mean it will be profitable overall for Apple.
In the meantime perhaps another 'netbook like' product will be introduced, like a larger iPod touch basted 'tablet'.
I keep reading arguments why people want a Mac netbook.
Sure, I want a $499 Mac notebook too! Count me in!
But why should Apple release one? What's in it for Apple? I have yet to read a good reason.
Every netbook sold is a potential MacBook sale lost. Of course there will be people who'd never opt for a more expensive MB. But there will also be a lot of potential MB buyers, who have the money and are willing to spend it, but in the end decide a $499 netbook will do just fine.
From current profit margins every MB sale lost requires at least 3-5 netbook sales to make up for it.
But this means doubling or tripling current Apple notebook sales!
And that is totally unrealistic.
And if Apple cannot attract such an increase in laptop sales, the introduction of a Mac netbook will overall result in less profits!
So why should Apple do it?
They won't.
Probably everyone else in the computer industry earns lower margins on their laptops. They don't need to sell 3-5 netbooks for a single laptop sale lost.
And they are also likely after market share as well, which Apple isn't.
Two scenarios where a Mac netbook could make sense for Apple:
- As 'entry drug' into the Mac market.
But the iPod/iPhone already serve that purpose.
Also one could argue that most of these people will never buy a Mac anyway (as it will always be too expensive). That $499 sale for one Mac netbook will likely be the only money they will ever spend on anything Macintosh.
- If Apple can eek out more money through accessories.
Apple makes a lot of money from iPod/iPhone accessories because in people's minds these don't count as part of the original purchase price. Also they make nice gifts so people buy them for others.
If Apple can develop a netbook that has a similar accessory universe they might make enough money overall in the end.
When will Apple release a Mac netbook?
Simpe: once MacBook and MacBook Pro sales drop dramatically - because everyone buys netbooks from competitors.
But last I looked Apple's notebook sales figures are still on rise...
In any other scenario Apple would only shoot themselves in the foot. Just because consumers want them, doesn't mean it will be profitable overall for Apple.
In the meantime perhaps another 'netbook like' product will be introduced, like a larger iPod touch basted 'tablet'.
And that is going to be it.
I think you're not accurately representing the opposing views that a few folks have made. Without question, Apple wouldn't enter this segment if they didn't think they could increase overall market share. You're right, they wouldn't do this if they thought the only thing they'd accomplish is to cannibalize potential MacBook sales.
Secondly, Apple is free to set prices where they want. There's no rule that says that it would require three netbook sales to equal the profit generated by one MacBook. So... that argument is a non-starter, IMHO. However, let's go out on a limb and suppose for a moment that the profit might be half that generated on a MacBook. If they sold two netbooks for each MacBook that they actually lose (and no one knows if that's a lot or just a handful), they end up with the same total profit. The extra benefit is that they've now expanded the overall share of OS X and further increased the potential of software sales.
When people talk about netbooks they usually mean dirt cheap. As in $299 cheap per the OP.
But we all know there won't be a $299 Mac netbook even in our wildest imagination.
So I'm willing to stretch this to $499. But anything beyond that point is losing the netbook appeal fast.
What if Apple were to introduce a $799 Mac 'netbook'? I'm sure people would moan.
And I have to concur. A netbook should be lots cheaper than that. $500 is a good starting price for a medium model. Not $800. This should be the top-end model.
Yet it would take a $799 (or even $899) price tag to not cannibalize MacBook sales too much.
Personally I don't see the point of a netbook with a $799 starting price.
Apple really high margins on laptop computers is a blessing, as most other manufacturers live on much less. But it's also a burdon as it becomes an obstacle in introducing netbooks.
Apple pretty much owns the top-end of the laptop market. They are therefore the most unlikely candidate to introduce something in the bottom slot.
There's more at stake for them, not just the profit margins: also brand reputation and awareness. Marketing-wise diluting this perception with 'cheap offerings' can be problematic.
In regards to netbooks, Apple painted themselves into a corner pretty much with their super-high margins and brand reputation.
The extra benefit is that they've now expanded the overall share of OS X and further increased the potential of software sales.
That argument is a bit moot.
Unlike Microsoft, Apple is not really much involved in the software market. They don't do games. All they have really is iLife and iWork. (Plus a bunch of high-end creative pro applications like Final Cut and Logic which won't run on a netbook anyway.)
And at $79 a pop they're not going to make lots of money on them either.
Apple is not after the software market nor market share in general. The Mac fan base is loyal, people don't jump from Apple to another manufacturer as quickly as people jump from HP or DELL. These have to have market and mind share to survive. So for DELL it makes total sense to introduce a $299 netbook as overall benefits outweigh the low profits.
But those fringe benefits are pretty worthless to Apple.
Unlike Microsoft, Apple is not really much involved in the software market. They don't do games. All they have really is iLife and iWork. (Plus a bunch of high-end creative pro applications like Final Cut and Logic which won't run on a netbook anyway.)
And at $79 a pop they're not going to make lots of money on them either.
Apple is not after the software market nor market share in general. The Mac fan base is loyal, people don't jump from Apple to another manufacturer as quickly as people jump from HP or DELL. These have to have market and mind share to survive. So for DELL it makes total sense to introduce a $299 netbook as overall benefits outweigh the low profits.
I clearly said that it was an extra benefit, and only an opportunity as well. It wasn't the central point of my post and I don't think you're being intellectually honest by parsing out what I typed.
I clearly said that it was an extra benefit, and only an opportunity as well. It wasn't the central point of my post and I don't think you're being intellectually honest by parsing out what I typed.
Sorry, I didn't mean to step on your paws!
Just wanted to answer to each of your arguments which ended up in 2 posts. Your arguments were:
- more sales = more market share
- Apple can set their price point so it won't negatively affect things
- fringe benefits
I don't actually think they have that much freedom in setting any price point. To not cannibalize MB sales the price point would have to be too close to the MB - at which point the whole cheap netbook allure is lost.
Also Apple is not about market share - if it means equal (or even less) profits.
Only if it means more profits are they interested in higher market share. And as I tried to point out before unless their market share will skyrocket any netbook will likely reduce their overall profit. But even if that means higher market share - Apple is not interested.
And those fringe benefits are great for companies like DELL or Microsoft, but don't really appeal to Apple that much. I don't think Apple intends to sell more software products nor can it be a one-stop-shop for every computer market segment.
Sure, it could be an opportunity to try these things, but my guess would be that Apple would rather try a completely new market (cars?!?) than following Microsoft's or DELL's model.
I thought dual-core Atoms have been available since January and that, according to the 'vine, Apple had them at least one month before.
Those are meant for desktops/nettops. I think the Apple TV could use those. Their TDP is still pretty low at 8W but much higher than the 2.5W single core N270.
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Originally Posted by timmillea
what happened to the forecast reduced margins due to a major product shift stated around 7 months ago in the financial conference call?
They probably changed their mind as we went deeper into a recession and then just didn't bother telling us about it.
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Originally Posted by hobBit
What if Apple were to introduce a $799 Mac 'netbook'? I'm sure people would moan.
Not really because people would just say, finally they've made the MBA what it should have been, which is cheaper than the Macbook. I think they should drop the price lower than $799 though. The drop from Core 2 Duo to Atom save $150 alone. Moving to a 10" screen (1024 x 768 - same as 12" powerbook) and no optical would reduce costs too. $300 saving should be perfectly doable - note that the savings are in components alone so the actual profit margin stays exactly the same. In other words, not less profitable but more profitable because it means a wider audience. They could absorb maybe 50% margin difference due to this even if it wasn't quite a $300 saving on components.
Sony's Vaio P is £800 (over $1100) and I think it's pushing back into the wrong end of the market. When you make compromises for mobility (Vaio P has a 1.33GHz Atom), the machine becomes a luxury if you are paying more than a machine without compromises. It's not a machine you need as it would not be your main desktop or laptop. This is why 'disposable' and cheap works better.
I was just checking on ebay what netbooks were going for and found an example of this very thing. Someone is selling a netbook with a cracked screen, which got damaged during a flight. It would cost the guy more claiming via insurance and this is exactly the benefit of a netbook. Imagine if the same thing happened to the MBA. It's quite a scary thought and would probably lead a lot of people to not take it on certain journeys, but this really defeats the purpose of the machine.
The question I have is what happens if they don't make one? Do people see prices of Windows netbooks they can't resist and gradually the Mac lifestyle fades out? For people who feel comfortable hacking a netbook do this instead of supporting Apple? I know a few die-hard Mac fans and they are asking me how easy it is to buy netbooks and put OS X on them. I personally want to keep supporting Apple but the Core i7 desktops look so much better than what they have on offer.
Apple had best watch out because with virtualization, SSD, cheap Ram, EFI-X their OS won't be such an exclusive selling point. It's still software and consumers will show its copyright protection as much respect as they do Adobe's CS suite.
Being expensive isn't a bad thing, being inaccessible is.
When people talk about netbooks they usually mean dirt cheap. As in $299 cheap per the OP.
Sure, that's a draw and part of the reason netbooks have done so well in the past year.
When I bought mine, the features that made me switch to Windows were:
1) small
2) light weight
3) cool to the touch for laptop use
The fact that I could get it for $500 compared to Apple's low-end $1000 was an additional selling point. Had Apple offered a similar laptop for $800, I probably would have bought Apple's so I wouldn't have to use Windows. If Apple's was $1000, I'd have probably gone Windows anyway just to save money. (It's not my main computer so speed and specs didn't really matter.)
By the way, the price has already dropped $50 on the netbook I bought in November. Seems components are cheap and competition is stiff. I doubt Apple will bother trying to enter the netbook market. It's not in their DNA.
Apple does have to be very careful they don't offer something so cheap is kills sales at the high end. Just look at the Mac mini. It's been a problem for Apple so they've ignored it, hoping sales will slow and people will look at iMacs instead.
The first thing that came to mind here is why any rational person would buy a laptop for time card processing and other stationary computing tasks? From my perspective this is an example purchasing the wrong hardware for a given task.
Dave
Dave, please reread the original post I made. Space constraints happened to be one of the main reasons for this purchase. However, the point of the post was not so much what conditions caused me to make the purchase as much as what I experienced while purchasing the machine. Sales quantity is there so why Apple ignores this, is beyond me. I think they went the wrong way with when they released the MBA. I would have thought an ultra-portable would come first.
Just wanted to answer to each of your arguments which ended up in 2 posts. Your arguments were:
- more sales = more market share
- Apple can set their price point so it won't negatively affect things
- fringe benefits
I don't actually think they have that much freedom in setting any price point. To not cannibalize MB sales the price point would have to be too close to the MB - at which point the whole cheap netbook allure is lost.
Also Apple is not about market share - if it means equal (or even less) profits.
Only if it means more profits are they interested in higher market share. And as I tried to point out before unless their market share will skyrocket any netbook will likely reduce their overall profit. But even if that means higher market share - Apple is not interested.
And those fringe benefits are great for companies like DELL or Microsoft, but don't really appeal to Apple that much. I don't think Apple intends to sell more software products nor can it be a one-stop-shop for every computer market segment.
Sure, it could be an opportunity to try these things, but my guess would be that Apple would rather try a completely new market (cars?!?) than following Microsoft's or DELL's model.
Like just about everyone else here, I have no idea whether Apple is going to enter this segment at some point. What I'm comfortable saying is that if they choose to, it will be with the expectation that they will make a greater total profit otherwise they won't do it. How they conceivable do that can be debated but in my mind it would encompass two factors: Generating decent profit on each netbook sold and increasing the total market share to compensate for some lost MacBook sales (whether small or significant). Apple are pretty smart and I think they would know how to balance those factors if they want to take the netbook plunge. If they think they can't increase market share then undoubtedly they won't do this.
What extra stuff are you doing on the MBA that warrants it being 3 times more expensive? Netbooks can browse the web, do email, office work, view pictures, videos, and light gaming. What more do you actually want from a portable device? Why spend 3 times what is necessary to achieve that? Most of the tasks above are relatively simple, which means that the processor in the MBA is sitting around idle most of the time, which is not a very good way of utilising your available resources. Meanwhile, the netbook processor is slower, but it is still more than adequate for those tasks.
The performance differences you would see in every day tasks would mostly come from being able to multitask. You would certainly see a difference in such tasks as rendering images, compressing video files, or viewing a HD movie without dropping frames.
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To me, it seems like the MBA doesn't really know what it is. It touts being able to do all the things a netbook can do, and be very portable, but then is bizarrely 3 times more expensive!
The Air is essentially a thinner lighter MacBook. To design and build smaller components without significantly compromising performance is expensive.
This could be true under the assumption that only netbooks improve and the Air doesn't improve. But that's not very likely.
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Originally Posted by infinitespecter
Remember that these netbooks are about as fast as the fastest Powerbook G4s were. That said, if you could get a 12 or 13" thin and light netbook for $800 or less (and that WILL happen this year) that does 90% of what an Air can, what's the point of the Air? It becomes an extremely small niche machine.
They probably changed their mind as we went deeper into a recession and then just didn't bother telling us about it. [...]
Finally they've made the MBA what it should have been, which is cheaper than the Macbook.
All good points.
I wonder how expensive these milled aluminum blocks really are. Whether this was the transition they were talking about (the MacBook unibody model). Or whether they do plan another unibody model, a small MacBook Air 'netbook' perhaps?
It should be something that is high volume and lower margin. Although Apple's idea of 'lower' magin is probably 28% instead of 30% and not 10-15%...
Can we find a sweet spot pricing for an Apple netbook?
I think we all agree that a netbook for $499 would make a much bigger splash than one for $799. The latter would probably just be perceived as a price drop on the $999 MacBook.
Even with cheap parts how much profit can Apple make on a $499 netbook?
$100? $200? $300?
Assuming current 30% margins will roughly apply then profits would be $150. Considering the $1,599 MacBook earns them $480 Apple needs to sell 3+ netbooks for each MacBook sale lost.
Apple sold 1.796mio notebooks last quarter. We don't have actual further break downs but let's assume 1/2 of these are MacBooks, the other half MacBook Pros and Airs (probably an even higher MacBook ratio).
Let's further assuem 1/3 of all potential MacBook owners will buy a Mac netbook for $499 instead. Again 1/3 is a reasonable number. The real figure will likely be much higher since MacBooks are key educational products and students are likely to snatch up a $499 machine instead.
That means 1/3 of 1/2 of 1.796mio sales lost to Mac netbooks, ca. 300,000 units.
To make up for the $330 profits lost Apple needs to sell another 660,000 netbooks for a total of 960,000 netbooks sold in a single quarter. And this will also comprise a 37% increase in total laptops sold to 2.46mio.
Do you think this is realistic in the current economic climate?
If yes, then Apple should go for a $499 netbook. If not, then prices would have to be raised.
At $599 (a $250 profit for Apple) they need to sell an extra 276,000 netbooks for a total of 2,072mio notebooks, an increase of 15.2% in sales.
At $699 (a $350 profit for Apple) an extra 111,000 netbooks for a total of 1.907mio notebooks, an increase in 6.2%.
That latter figure is probably realistic and doable. But at $699 a Mac netbook is not all that exciting...
Yet anything lower more and more becomes a huge gamble.
And this doesn't even account for 'worse' conditions:
- What if MacBooks make up more than 1/2 of all Apple laptops sold?
- What if more than 1/3 of potential MacBook owners go for the netbook?
- What if further sales will be lost on MacBook Pros by people now going for the middle-of-the-road model instead (MacBook)?
- What about increased service costs? With many more low-end customers come more support requests. All need to be paid for.
But even at $699 for a Mac netbook with the specs of a $499 Asus or DELL netbook, would people go for that?
Would that really be the 'Mac netbook' everyone's craving for? Or would it just be another 'Macs are too expensive' argument?
At that price Mac netbooks would probably be a very mild success, if any.
I think it's designed to fit the ultra-portable sector and the problem that I see is not so much that the Macbook Air doesn't fit its target market but rather the netbook market pretty much makes the ultra-portable market redundant.
This is true.
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Apple's product is probably safer than other ultra-portables like Sony's though because Sony does sacrifice performance and screen size and yet has an ultra-portable price tag. The Macbook Air is meant to be basically Macbook performance but much lighter (even though it's just over 30% lighter).
Its true with the new MacBook update, their is less size difference between the standard MacBook and the Air. While their is a lot of difference in functionality and price. I can agree Apple will need to realign the price of the Air to close the functionality gap with the standard MacBook.
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Still, I really don't know who needs this level of performance on the go - maybe business execs who sit in First Class on flights are playing Call of Duty 4.
I find it difficult to argue that more performance is unnecessary. In notebooks in general you see the performance compromise in comparison to desktops.
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I'm sure that we'll find out this year if netbooks will wipe out ultra-portables or if both markets can co-exist. I personally believe and hope that netbooks will reduce sales of ultra-portables to the point where they are no longer worth making.
I think for netbooks to do this, their will need to be some models with larger screens, full keyboards and larger track pads.
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As InfiniteSpacer mentions, Nvidia's Ion will be a significant blow to the ultra-portables. I reckon once they get dual-core Atoms this Summer, the ultra-portable sector is finished and people will simply call netbooks ultra-portables.
Yes its true Nvidia is bringing the 9400 to netbooks, which will greatly improve performance. But its all a sliding scale, more expensive ultra-portables will move on to better graphics cards.
Not really because people would just say, finally they've made the MBA what it should have been, which is cheaper than the Macbook. I think they should drop the price lower than $799 though. The drop from Core 2 Duo to Atom save $150 alone. Moving to a 10" screen (1024 x 768 - same as 12" powerbook) and no optical would reduce costs too. $300 saving should be perfectly doable - note that the savings are in components alone so the actual profit margin stays exactly the same. In other words, not less profitable but more profitable because it means a wider audience. They could absorb maybe 50% margin difference due to this even if it wasn't quite a $300 saving on components.
I agree the Air should at least be the same price as the MacBook.
I don't think they should drop the Core 2 Duo for the Atom, they should go in the opposite direction and use faster low powered Core 2 Duo.
I think Apple wants its screens to display 1280x720 at a minimum.
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This is why 'disposable' and cheap works better.
It can be argued that sub-$1000 PC notebooks have been cheap and disposable for some time.
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I was just checking on ebay what netbooks were going for and found an example of this very thing. Someone is selling a netbook with a cracked screen, which got damaged during a flight. It would cost the guy more claiming via insurance and this is exactly the benefit of a netbook. Imagine if the same thing happened to the MBA. It's quite a scary thought and would probably lead a lot of people to not take it on certain journeys, but this really defeats the purpose of the machine.
This has always been the case with portable machines. They go through a lot of wear and tear. They get dropped and damaged. Its not a new phenomenon with netbooks. Performance notebooks are going to be important as they will dominate the computer market in general.
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Apple had best watch out because with virtualization, SSD, cheap Ram, EFI-X their OS won't be such an exclusive selling point. It's still software and consumers will show its copyright protection as much respect as they do Adobe's CS suite.
When Apple first announced switching from PPC to Intel, we had a lot of debate and discussion about hacking OS X onto generic PC's becoming a normal part of the market. In reality the very opposite happened, Apple sold more computers than it ever had before. So far this hasn't been proven to be a significant problem.
Comments
The first thing that came to mind here is why any rational person would buy a laptop for time card processing and other stationary computing tasks? From my perspective this is an example purchasing the wrong hardware for a given task.
A cheap desktop PC is bulky and possibly noisy. Not to mention if you want to move the thing, you have to unplug a lot more stuff. You'd be hard pressed to find a new desktop with warranty that cheap anyway.
I found one for £222 in a quick search without a display. A cheap display would run about £50 so £272. A netbook can be bought for under £250 and will be cheaper to have delivered.
the display $65. All the rest of the crap isn't going to add up to much more $100. Apple could potentially make more than $200 off every machine.
The display is the main issue I see for Apple. They emphasized that shrinking the display was not a compromise they wanted to make. For them to now make a machine with a 10" screen means a reversal of that.
Remember the other netbook makers are making a profit right now. Since Apple builds in a bigger profit margin and people here are completely willing to pay $500 dollars for a Apple netbook, they won't have a problem.
Since Asus sell their Nvidia model at $660, I could see them aiming closer to $699 as they'd include isight and all the other little sensors and things they put on their machine. They'd basically be taking the Macbook, shrinking it, using the Ion platform and a smaller display. A $300 saving over the base Macbook is a decent drop in price.
For all the love of Atom I'm still thinking that Apple will come up with an ARM based system simply because of it's much lower power usage.
Frankly I don't see a lot of innovation in the current crop of netbooks. All Apple needs to do is integrate some tablet technology with some state of the art battery tech and they could have a machine that could run for days.
A tablet idea would be great but it's not possible for ARM to be in the picture. Netbooks are popular because they run full operating systems and apps. If Apple go with ARM, no OS X software will run. It has to be Ion or nothing.
Bets on a netBook release - March, July or October? or Never?
The day after the Cube makes a comeback. I'd say Wednesday.
The current lineup needs a refresh ASAP, but if Apple go for the green Q8200 then we're looking at February 24th at the earliest for iMac and Mini updates. The Mac Pro should come sometime in March. This leaves April, May, June. Refreshed iphone should be announced in June.
I don't think Apple would offer a netbook with single core Atom so they'd wait until Intel had the dual core ones. But Intel aren't too happy with Atom processors and are holding them back as they don't make much profit on them. The even put them down saying they are half the speed of Celerons and people shouldn't want to buy them. I imagine Intel and Apple would have some sort of mutual agreement to avoid using them in mainstream computers.
My bet is Ion is for ATV and that's it.
i don't think in all reality a netbook is chosen to run photoshop regardless of speed,
simple stuff done simply, internet, mail, pictures, itunes,
the big selling points are CHEAP AND SMALL
all one needs is an iPhone AND a BT keyboard thats the ideal netbook
i want a convergence device, not another THING to carry, and worry
if there was a higher res screen on the ipod that could display more text, the above with BT keyboard would be even better.
the margins are very thin, its a grow into device, the major manufacturers want you to grow into their other products
you want to see the functional need of this device what % are used at class and colleges?
anyone with those stats.
CHEAP AND SMALL, CHEAP AND SMALL.....EASILY REPLACEABLE
I don't think Apple would offer a netbook with single core Atom so they'd wait until Intel had the dual core ones.
I thought dual-core Atoms have been available since January and that, according to the 'vine, Apple had them at least one month before.
I agree with another poster in a related thread that something has been amiss with Apple of late. It looks like several products have been pulled, delayed or rehashed at short-notice and we are yet to see the very late results. E.g., what happened to the forecast reduced margins due to a major product shift stated around 7 months ago in the financial conference call? No shift has taken place and margins were actually up in the most recent results. I am certain there are many great Apple products currently in the pipeline but I would love to know the inside story of all the apparent recent delays.
Apple will field a choice. I'm thinking that they're just working on how to do it and make some good profit.
That doesn't stop them on the desktop. Just offer 3 year old specs as in the Mac Mini and Bob's yer auntie.
Lemon Bon Bon.
Sure, I want a $499 Mac notebook too! Count me in!
But why should Apple release one? What's in it for Apple? I have yet to read a good reason.
Every netbook sold is a potential MacBook sale lost. Of course there will be people who'd never opt for a more expensive MB. But there will also be a lot of potential MB buyers, who have the money and are willing to spend it, but in the end decide a $499 netbook will do just fine.
From current profit margins every MB sale lost requires at least 3-5 netbook sales to make up for it.
But this means doubling or tripling current Apple notebook sales!
And that is totally unrealistic.
And if Apple cannot attract such an increase in laptop sales, the introduction of a Mac netbook will overall result in less profits!
So why should Apple do it?
They won't.
Probably everyone else in the computer industry earns lower margins on their laptops. They don't need to sell 3-5 netbooks for a single laptop sale lost.
And they are also likely after market share as well, which Apple isn't.
Two scenarios where a Mac netbook could make sense for Apple:
- As 'entry drug' into the Mac market.
But the iPod/iPhone already serve that purpose.
Also one could argue that most of these people will never buy a Mac anyway (as it will always be too expensive). That $499 sale for one Mac netbook will likely be the only money they will ever spend on anything Macintosh.
- If Apple can eek out more money through accessories.
Apple makes a lot of money from iPod/iPhone accessories because in people's minds these don't count as part of the original purchase price. Also they make nice gifts so people buy them for others.
If Apple can develop a netbook that has a similar accessory universe they might make enough money overall in the end.
When will Apple release a Mac netbook?
Simpe: once MacBook and MacBook Pro sales drop dramatically - because everyone buys netbooks from competitors.
But last I looked Apple's notebook sales figures are still on rise...
In any other scenario Apple would only shoot themselves in the foot. Just because consumers want them, doesn't mean it will be profitable overall for Apple.
In the meantime perhaps another 'netbook like' product will be introduced, like a larger iPod touch basted 'tablet'.
And that is going to be it.
I keep reading arguments why people want a Mac netbook.
Sure, I want a $499 Mac notebook too! Count me in!
But why should Apple release one? What's in it for Apple? I have yet to read a good reason.
Every netbook sold is a potential MacBook sale lost. Of course there will be people who'd never opt for a more expensive MB. But there will also be a lot of potential MB buyers, who have the money and are willing to spend it, but in the end decide a $499 netbook will do just fine.
From current profit margins every MB sale lost requires at least 3-5 netbook sales to make up for it.
But this means doubling or tripling current Apple notebook sales!
And that is totally unrealistic.
And if Apple cannot attract such an increase in laptop sales, the introduction of a Mac netbook will overall result in less profits!
So why should Apple do it?
They won't.
Probably everyone else in the computer industry earns lower margins on their laptops. They don't need to sell 3-5 netbooks for a single laptop sale lost.
And they are also likely after market share as well, which Apple isn't.
Two scenarios where a Mac netbook could make sense for Apple:
- As 'entry drug' into the Mac market.
But the iPod/iPhone already serve that purpose.
Also one could argue that most of these people will never buy a Mac anyway (as it will always be too expensive). That $499 sale for one Mac netbook will likely be the only money they will ever spend on anything Macintosh.
- If Apple can eek out more money through accessories.
Apple makes a lot of money from iPod/iPhone accessories because in people's minds these don't count as part of the original purchase price. Also they make nice gifts so people buy them for others.
If Apple can develop a netbook that has a similar accessory universe they might make enough money overall in the end.
When will Apple release a Mac netbook?
Simpe: once MacBook and MacBook Pro sales drop dramatically - because everyone buys netbooks from competitors.
But last I looked Apple's notebook sales figures are still on rise...
In any other scenario Apple would only shoot themselves in the foot. Just because consumers want them, doesn't mean it will be profitable overall for Apple.
In the meantime perhaps another 'netbook like' product will be introduced, like a larger iPod touch basted 'tablet'.
And that is going to be it.
I think you're not accurately representing the opposing views that a few folks have made. Without question, Apple wouldn't enter this segment if they didn't think they could increase overall market share. You're right, they wouldn't do this if they thought the only thing they'd accomplish is to cannibalize potential MacBook sales.
Secondly, Apple is free to set prices where they want. There's no rule that says that it would require three netbook sales to equal the profit generated by one MacBook. So... that argument is a non-starter, IMHO. However, let's go out on a limb and suppose for a moment that the profit might be half that generated on a MacBook. If they sold two netbooks for each MacBook that they actually lose (and no one knows if that's a lot or just a handful), they end up with the same total profit. The extra benefit is that they've now expanded the overall share of OS X and further increased the potential of software sales.
But we all know there won't be a $299 Mac netbook even in our wildest imagination.
So I'm willing to stretch this to $499. But anything beyond that point is losing the netbook appeal fast.
What if Apple were to introduce a $799 Mac 'netbook'? I'm sure people would moan.
And I have to concur. A netbook should be lots cheaper than that. $500 is a good starting price for a medium model. Not $800. This should be the top-end model.
Yet it would take a $799 (or even $899) price tag to not cannibalize MacBook sales too much.
Personally I don't see the point of a netbook with a $799 starting price.
Apple really high margins on laptop computers is a blessing, as most other manufacturers live on much less. But it's also a burdon as it becomes an obstacle in introducing netbooks.
Apple pretty much owns the top-end of the laptop market. They are therefore the most unlikely candidate to introduce something in the bottom slot.
There's more at stake for them, not just the profit margins: also brand reputation and awareness. Marketing-wise diluting this perception with 'cheap offerings' can be problematic.
In regards to netbooks, Apple painted themselves into a corner pretty much with their super-high margins and brand reputation.
The extra benefit is that they've now expanded the overall share of OS X and further increased the potential of software sales.
That argument is a bit moot.
Unlike Microsoft, Apple is not really much involved in the software market. They don't do games. All they have really is iLife and iWork. (Plus a bunch of high-end creative pro applications like Final Cut and Logic which won't run on a netbook anyway.)
And at $79 a pop they're not going to make lots of money on them either.
Apple is not after the software market nor market share in general. The Mac fan base is loyal, people don't jump from Apple to another manufacturer as quickly as people jump from HP or DELL. These have to have market and mind share to survive. So for DELL it makes total sense to introduce a $299 netbook as overall benefits outweigh the low profits.
But those fringe benefits are pretty worthless to Apple.
That argument is a bit moot.
Unlike Microsoft, Apple is not really much involved in the software market. They don't do games. All they have really is iLife and iWork. (Plus a bunch of high-end creative pro applications like Final Cut and Logic which won't run on a netbook anyway.)
And at $79 a pop they're not going to make lots of money on them either.
Apple is not after the software market nor market share in general. The Mac fan base is loyal, people don't jump from Apple to another manufacturer as quickly as people jump from HP or DELL. These have to have market and mind share to survive. So for DELL it makes total sense to introduce a $299 netbook as overall benefits outweigh the low profits.
I clearly said that it was an extra benefit, and only an opportunity as well. It wasn't the central point of my post and I don't think you're being intellectually honest by parsing out what I typed.
I clearly said that it was an extra benefit, and only an opportunity as well. It wasn't the central point of my post and I don't think you're being intellectually honest by parsing out what I typed.
Sorry, I didn't mean to step on your paws!
Just wanted to answer to each of your arguments which ended up in 2 posts. Your arguments were:
- more sales = more market share
- Apple can set their price point so it won't negatively affect things
- fringe benefits
I don't actually think they have that much freedom in setting any price point. To not cannibalize MB sales the price point would have to be too close to the MB - at which point the whole cheap netbook allure is lost.
Also Apple is not about market share - if it means equal (or even less) profits.
Only if it means more profits are they interested in higher market share. And as I tried to point out before unless their market share will skyrocket any netbook will likely reduce their overall profit. But even if that means higher market share - Apple is not interested.
And those fringe benefits are great for companies like DELL or Microsoft, but don't really appeal to Apple that much. I don't think Apple intends to sell more software products nor can it be a one-stop-shop for every computer market segment.
Sure, it could be an opportunity to try these things, but my guess would be that Apple would rather try a completely new market (cars?!?) than following Microsoft's or DELL's model.
I thought dual-core Atoms have been available since January and that, according to the 'vine, Apple had them at least one month before.
Those are meant for desktops/nettops. I think the Apple TV could use those. Their TDP is still pretty low at 8W but much higher than the 2.5W single core N270.
what happened to the forecast reduced margins due to a major product shift stated around 7 months ago in the financial conference call?
They probably changed their mind as we went deeper into a recession and then just didn't bother telling us about it.
What if Apple were to introduce a $799 Mac 'netbook'? I'm sure people would moan.
Not really because people would just say, finally they've made the MBA what it should have been, which is cheaper than the Macbook. I think they should drop the price lower than $799 though. The drop from Core 2 Duo to Atom save $150 alone. Moving to a 10" screen (1024 x 768 - same as 12" powerbook) and no optical would reduce costs too. $300 saving should be perfectly doable - note that the savings are in components alone so the actual profit margin stays exactly the same. In other words, not less profitable but more profitable because it means a wider audience. They could absorb maybe 50% margin difference due to this even if it wasn't quite a $300 saving on components.
Sony's Vaio P is £800 (over $1100) and I think it's pushing back into the wrong end of the market. When you make compromises for mobility (Vaio P has a 1.33GHz Atom), the machine becomes a luxury if you are paying more than a machine without compromises. It's not a machine you need as it would not be your main desktop or laptop. This is why 'disposable' and cheap works better.
I was just checking on ebay what netbooks were going for and found an example of this very thing. Someone is selling a netbook with a cracked screen, which got damaged during a flight. It would cost the guy more claiming via insurance and this is exactly the benefit of a netbook. Imagine if the same thing happened to the MBA. It's quite a scary thought and would probably lead a lot of people to not take it on certain journeys, but this really defeats the purpose of the machine.
The question I have is what happens if they don't make one? Do people see prices of Windows netbooks they can't resist and gradually the Mac lifestyle fades out? For people who feel comfortable hacking a netbook do this instead of supporting Apple? I know a few die-hard Mac fans and they are asking me how easy it is to buy netbooks and put OS X on them. I personally want to keep supporting Apple but the Core i7 desktops look so much better than what they have on offer.
Apple had best watch out because with virtualization, SSD, cheap Ram, EFI-X their OS won't be such an exclusive selling point. It's still software and consumers will show its copyright protection as much respect as they do Adobe's CS suite.
Being expensive isn't a bad thing, being inaccessible is.
When people talk about netbooks they usually mean dirt cheap. As in $299 cheap per the OP.
Sure, that's a draw and part of the reason netbooks have done so well in the past year.
When I bought mine, the features that made me switch to Windows were:
1) small
2) light weight
3) cool to the touch for laptop use
The fact that I could get it for $500 compared to Apple's low-end $1000 was an additional selling point. Had Apple offered a similar laptop for $800, I probably would have bought Apple's so I wouldn't have to use Windows. If Apple's was $1000, I'd have probably gone Windows anyway just to save money. (It's not my main computer so speed and specs didn't really matter.)
By the way, the price has already dropped $50 on the netbook I bought in November. Seems components are cheap and competition is stiff. I doubt Apple will bother trying to enter the netbook market. It's not in their DNA.
Apple does have to be very careful they don't offer something so cheap is kills sales at the high end. Just look at the Mac mini. It's been a problem for Apple so they've ignored it, hoping sales will slow and people will look at iMacs instead.
The first thing that came to mind here is why any rational person would buy a laptop for time card processing and other stationary computing tasks? From my perspective this is an example purchasing the wrong hardware for a given task.
Dave
Dave, please reread the original post I made. Space constraints happened to be one of the main reasons for this purchase. However, the point of the post was not so much what conditions caused me to make the purchase as much as what I experienced while purchasing the machine. Sales quantity is there so why Apple ignores this, is beyond me. I think they went the wrong way with when they released the MBA. I would have thought an ultra-portable would come first.
Sorry, I didn't mean to step on your paws!
Just wanted to answer to each of your arguments which ended up in 2 posts. Your arguments were:
- more sales = more market share
- Apple can set their price point so it won't negatively affect things
- fringe benefits
I don't actually think they have that much freedom in setting any price point. To not cannibalize MB sales the price point would have to be too close to the MB - at which point the whole cheap netbook allure is lost.
Also Apple is not about market share - if it means equal (or even less) profits.
Only if it means more profits are they interested in higher market share. And as I tried to point out before unless their market share will skyrocket any netbook will likely reduce their overall profit. But even if that means higher market share - Apple is not interested.
And those fringe benefits are great for companies like DELL or Microsoft, but don't really appeal to Apple that much. I don't think Apple intends to sell more software products nor can it be a one-stop-shop for every computer market segment.
Sure, it could be an opportunity to try these things, but my guess would be that Apple would rather try a completely new market (cars?!?) than following Microsoft's or DELL's model.
Like just about everyone else here, I have no idea whether Apple is going to enter this segment at some point. What I'm comfortable saying is that if they choose to, it will be with the expectation that they will make a greater total profit otherwise they won't do it. How they conceivable do that can be debated but in my mind it would encompass two factors: Generating decent profit on each netbook sold and increasing the total market share to compensate for some lost MacBook sales (whether small or significant). Apple are pretty smart and I think they would know how to balance those factors if they want to take the netbook plunge. If they think they can't increase market share then undoubtedly they won't do this.
What extra stuff are you doing on the MBA that warrants it being 3 times more expensive? Netbooks can browse the web, do email, office work, view pictures, videos, and light gaming. What more do you actually want from a portable device? Why spend 3 times what is necessary to achieve that? Most of the tasks above are relatively simple, which means that the processor in the MBA is sitting around idle most of the time, which is not a very good way of utilising your available resources. Meanwhile, the netbook processor is slower, but it is still more than adequate for those tasks.
The performance differences you would see in every day tasks would mostly come from being able to multitask. You would certainly see a difference in such tasks as rendering images, compressing video files, or viewing a HD movie without dropping frames.
To me, it seems like the MBA doesn't really know what it is. It touts being able to do all the things a netbook can do, and be very portable, but then is bizarrely 3 times more expensive!
The Air is essentially a thinner lighter MacBook. To design and build smaller components without significantly compromising performance is expensive.
Remember that these netbooks are about as fast as the fastest Powerbook G4s were. That said, if you could get a 12 or 13" thin and light netbook for $800 or less (and that WILL happen this year) that does 90% of what an Air can, what's the point of the Air? It becomes an extremely small niche machine.
They probably changed their mind as we went deeper into a recession and then just didn't bother telling us about it. [...]
Finally they've made the MBA what it should have been, which is cheaper than the Macbook.
All good points.
I wonder how expensive these milled aluminum blocks really are. Whether this was the transition they were talking about (the MacBook unibody model). Or whether they do plan another unibody model, a small MacBook Air 'netbook' perhaps?
It should be something that is high volume and lower margin. Although Apple's idea of 'lower' magin is probably 28% instead of 30% and not 10-15%...
Can we find a sweet spot pricing for an Apple netbook?
I think we all agree that a netbook for $499 would make a much bigger splash than one for $799. The latter would probably just be perceived as a price drop on the $999 MacBook.
Even with cheap parts how much profit can Apple make on a $499 netbook?
$100? $200? $300?
Assuming current 30% margins will roughly apply then profits would be $150. Considering the $1,599 MacBook earns them $480 Apple needs to sell 3+ netbooks for each MacBook sale lost.
Apple sold 1.796mio notebooks last quarter. We don't have actual further break downs but let's assume 1/2 of these are MacBooks, the other half MacBook Pros and Airs (probably an even higher MacBook ratio).
Let's further assuem 1/3 of all potential MacBook owners will buy a Mac netbook for $499 instead. Again 1/3 is a reasonable number. The real figure will likely be much higher since MacBooks are key educational products and students are likely to snatch up a $499 machine instead.
That means 1/3 of 1/2 of 1.796mio sales lost to Mac netbooks, ca. 300,000 units.
To make up for the $330 profits lost Apple needs to sell another 660,000 netbooks for a total of 960,000 netbooks sold in a single quarter. And this will also comprise a 37% increase in total laptops sold to 2.46mio.
Do you think this is realistic in the current economic climate?
If yes, then Apple should go for a $499 netbook. If not, then prices would have to be raised.
At $599 (a $250 profit for Apple) they need to sell an extra 276,000 netbooks for a total of 2,072mio notebooks, an increase of 15.2% in sales.
At $699 (a $350 profit for Apple) an extra 111,000 netbooks for a total of 1.907mio notebooks, an increase in 6.2%.
That latter figure is probably realistic and doable. But at $699 a Mac netbook is not all that exciting...
Yet anything lower more and more becomes a huge gamble.
And this doesn't even account for 'worse' conditions:
- What if MacBooks make up more than 1/2 of all Apple laptops sold?
- What if more than 1/3 of potential MacBook owners go for the netbook?
- What if further sales will be lost on MacBook Pros by people now going for the middle-of-the-road model instead (MacBook)?
- What about increased service costs? With many more low-end customers come more support requests. All need to be paid for.
But even at $699 for a Mac netbook with the specs of a $499 Asus or DELL netbook, would people go for that?
Would that really be the 'Mac netbook' everyone's craving for? Or would it just be another 'Macs are too expensive' argument?
At that price Mac netbooks would probably be a very mild success, if any.
I think it's designed to fit the ultra-portable sector and the problem that I see is not so much that the Macbook Air doesn't fit its target market but rather the netbook market pretty much makes the ultra-portable market redundant.
This is true.
Apple's product is probably safer than other ultra-portables like Sony's though because Sony does sacrifice performance and screen size and yet has an ultra-portable price tag. The Macbook Air is meant to be basically Macbook performance but much lighter (even though it's just over 30% lighter).
Its true with the new MacBook update, their is less size difference between the standard MacBook and the Air. While their is a lot of difference in functionality and price. I can agree Apple will need to realign the price of the Air to close the functionality gap with the standard MacBook.
Still, I really don't know who needs this level of performance on the go - maybe business execs who sit in First Class on flights are playing Call of Duty 4.
I find it difficult to argue that more performance is unnecessary. In notebooks in general you see the performance compromise in comparison to desktops.
I'm sure that we'll find out this year if netbooks will wipe out ultra-portables or if both markets can co-exist. I personally believe and hope that netbooks will reduce sales of ultra-portables to the point where they are no longer worth making.
I think for netbooks to do this, their will need to be some models with larger screens, full keyboards and larger track pads.
As InfiniteSpacer mentions, Nvidia's Ion will be a significant blow to the ultra-portables. I reckon once they get dual-core Atoms this Summer, the ultra-portable sector is finished and people will simply call netbooks ultra-portables.
Yes its true Nvidia is bringing the 9400 to netbooks, which will greatly improve performance. But its all a sliding scale, more expensive ultra-portables will move on to better graphics cards.
.....I can agree Apple will need to realign the price of the Air ....
.
Seems like they are.
Have you noticed how cheap a refurbished Air is?
I think Apple have room to move in the price of the MBA.
If they changed the cpu to an Atom that'd give them even more room to lower the price.
Not really because people would just say, finally they've made the MBA what it should have been, which is cheaper than the Macbook. I think they should drop the price lower than $799 though. The drop from Core 2 Duo to Atom save $150 alone. Moving to a 10" screen (1024 x 768 - same as 12" powerbook) and no optical would reduce costs too. $300 saving should be perfectly doable - note that the savings are in components alone so the actual profit margin stays exactly the same. In other words, not less profitable but more profitable because it means a wider audience. They could absorb maybe 50% margin difference due to this even if it wasn't quite a $300 saving on components.
I agree the Air should at least be the same price as the MacBook.
I don't think they should drop the Core 2 Duo for the Atom, they should go in the opposite direction and use faster low powered Core 2 Duo.
I think Apple wants its screens to display 1280x720 at a minimum.
This is why 'disposable' and cheap works better.
It can be argued that sub-$1000 PC notebooks have been cheap and disposable for some time.
I was just checking on ebay what netbooks were going for and found an example of this very thing. Someone is selling a netbook with a cracked screen, which got damaged during a flight. It would cost the guy more claiming via insurance and this is exactly the benefit of a netbook. Imagine if the same thing happened to the MBA. It's quite a scary thought and would probably lead a lot of people to not take it on certain journeys, but this really defeats the purpose of the machine.
This has always been the case with portable machines. They go through a lot of wear and tear. They get dropped and damaged. Its not a new phenomenon with netbooks. Performance notebooks are going to be important as they will dominate the computer market in general.
Apple had best watch out because with virtualization, SSD, cheap Ram, EFI-X their OS won't be such an exclusive selling point. It's still software and consumers will show its copyright protection as much respect as they do Adobe's CS suite.
When Apple first announced switching from PPC to Intel, we had a lot of debate and discussion about hacking OS X onto generic PC's becoming a normal part of the market. In reality the very opposite happened, Apple sold more computers than it ever had before. So far this hasn't been proven to be a significant problem.