Economy, opportunity seen leading to $599 Apple netbook
Faced with the perfect storm of a bleak market and a boom in ultra-budget portables, Apple is believed by some to be readying its own take on the netbook for the first half of 2009.
Analyst Ezra Gottheil from Technology Business Research (TBR) cautions that Apple may no longer have the luxury of keeping its notebook pricing high when many buyers are much more concerned about price than they were even a few months ago.
The company has until now insisted on keeping its prices largely unchanged and instead has upgraded the specifications of its systems to maintain that price. That has kept its average selling price high but has also all but locked the company out of the entry-level and developing-world markets; these are now being joined by cash-strapped customers even within the US, making it that much less likely any of them will pay Apple's minimum asking price. At $999, the least expensive MacBook is twice or more the cost of the most frugal Windows alternatives, Gottheil says.
Gottheil dismisses the notion of an artificial premium on Apple products, noting that they often compete well for the features, but is certain that the Cupertino, Calif.-based company has reached a breaking point where perceived quality can't override genuine financial woes from customers.
"It is too much to ask consumers to pay more than twice as much for a PC in these times," the analyst says.
Moreover, the market is also understood to be shifting away from the Mac's traditional price range. The sudden explosion in the popularity of netbooks -- portables with 10-inch or smaller screens that are often based around low-power processors and meant for basic Internet use -- has pushed the price of a notebook to as little as $300. Apple can't ignore this, Gottheil claims.
But while the Mac maker's chief Steve Jobs has argued that the iPhone is netbook-like in fulfilling many of the same online roles, the researcher believes that the desire for a keyboard ultimately the usefulness of the iPhone for certain software and that something more is necessary.
Instead, he and TBR are confident that Apple will release a computer in the netbook class within the first half of next year, but one that doesn't obey many of the rules dictated by the industry. Like the MacBook Air ultraportable, this future system would be at least as thin and light as others in its category but would potentially have a larger surface area to allow a larger display or more comfortable input. Netbook owners carry their systems "in stacks with papers and books" and care more about thickness than footprint, according to Gottheil.
Crucially, he also takes to heart Jobs' assertion that $500 systems are typically "junk" and believes that Apple will price the system at $599. The figure would be just low enough to draw customers who would pass over the plastic MacBook but high enough to avoid the risk Apple's co-founder perceives in dropping the price particularly low.
As with most Windows PC makers, Apple would reportedly have to accept the risk of cannibalizing sales for some of its more lucrative notebook models but could theoretically maintain its profit margins and continue to grow its Mac shipments ahead of the industry curve.
While the market conditions are widely accepted and are potentially supported by rumors of an unknown device being tested at Apple that would more closely fit the bill, Gottheil's statements do contradict some of Jobs' own beliefs about netbooks and Apple's role in the marketplace. He believes netbooks are part of a "nascent" category that may not pan out and has said he would be "surprised" if large volumes of notebook buyers shifted to the very bottom of the price spectrum and created problems for Apple.
Still, TBR's analyst warns that buyers, including those looking at Macs, were "more cautious" even in the summer and that Apple in its current position would gain share mainly at the expense of its revenue as users opt for less expensive models whenever possible.
Analyst Ezra Gottheil from Technology Business Research (TBR) cautions that Apple may no longer have the luxury of keeping its notebook pricing high when many buyers are much more concerned about price than they were even a few months ago.
The company has until now insisted on keeping its prices largely unchanged and instead has upgraded the specifications of its systems to maintain that price. That has kept its average selling price high but has also all but locked the company out of the entry-level and developing-world markets; these are now being joined by cash-strapped customers even within the US, making it that much less likely any of them will pay Apple's minimum asking price. At $999, the least expensive MacBook is twice or more the cost of the most frugal Windows alternatives, Gottheil says.
Gottheil dismisses the notion of an artificial premium on Apple products, noting that they often compete well for the features, but is certain that the Cupertino, Calif.-based company has reached a breaking point where perceived quality can't override genuine financial woes from customers.
"It is too much to ask consumers to pay more than twice as much for a PC in these times," the analyst says.
Moreover, the market is also understood to be shifting away from the Mac's traditional price range. The sudden explosion in the popularity of netbooks -- portables with 10-inch or smaller screens that are often based around low-power processors and meant for basic Internet use -- has pushed the price of a notebook to as little as $300. Apple can't ignore this, Gottheil claims.
But while the Mac maker's chief Steve Jobs has argued that the iPhone is netbook-like in fulfilling many of the same online roles, the researcher believes that the desire for a keyboard ultimately the usefulness of the iPhone for certain software and that something more is necessary.
Instead, he and TBR are confident that Apple will release a computer in the netbook class within the first half of next year, but one that doesn't obey many of the rules dictated by the industry. Like the MacBook Air ultraportable, this future system would be at least as thin and light as others in its category but would potentially have a larger surface area to allow a larger display or more comfortable input. Netbook owners carry their systems "in stacks with papers and books" and care more about thickness than footprint, according to Gottheil.
Crucially, he also takes to heart Jobs' assertion that $500 systems are typically "junk" and believes that Apple will price the system at $599. The figure would be just low enough to draw customers who would pass over the plastic MacBook but high enough to avoid the risk Apple's co-founder perceives in dropping the price particularly low.
As with most Windows PC makers, Apple would reportedly have to accept the risk of cannibalizing sales for some of its more lucrative notebook models but could theoretically maintain its profit margins and continue to grow its Mac shipments ahead of the industry curve.
While the market conditions are widely accepted and are potentially supported by rumors of an unknown device being tested at Apple that would more closely fit the bill, Gottheil's statements do contradict some of Jobs' own beliefs about netbooks and Apple's role in the marketplace. He believes netbooks are part of a "nascent" category that may not pan out and has said he would be "surprised" if large volumes of notebook buyers shifted to the very bottom of the price spectrum and created problems for Apple.
Still, TBR's analyst warns that buyers, including those looking at Macs, were "more cautious" even in the summer and that Apple in its current position would gain share mainly at the expense of its revenue as users opt for less expensive models whenever possible.
Comments
It's a natural extension and would further build on the touch interface of both iPhone and multi-touch gestures of the MacBooks.
Going this route would go counter to simply miniaturizing laptops as current netbooks are. By going 'touch', this perceived premium will allow Apple to charge more in the $600-$800 range.
Snow Leopard and a rumored $99 iPhone are bigger deals than an Apple netbook.
I would hate it if Apple released anything below 900$. It just makes the Apple brand look cheap, and crappy. And it allows all these other people to be carrying around a fruit logo when they shouldn't be. In the end Apple will just dilute their brand. Please Steve Jobs - don't do it!
My Touch costed less than $900. My guess is that Apple would love to sell Touches at $600. It will be interesting to see if they can make that a viable proposition by turning a Touch into a NetBook.
just like how I got tired of the terms like "Web 2.0" and "blog" years ago. Enough.
.
I hate the term Web 2.0, it's so stupid.
I would hate it if Apple released anything below 900$. It just makes the Apple brand look cheap, and crappy. And it allows all these other people to be carrying around a fruit logo when they shouldn't be. In the end Apple will just dilute their brand. Please Steve Jobs - don't do it!
http://store.apple.com/us/browse/hom...ni?mco=MTE3MTA
You're many years too late. Apple released its first $799 Mac in 2001.
The sudden explosion in the popularity of netbooks -- portables with 10-inch or smaller screens that are often based around low-power processors and meant for basic Internet use --
Really? Numbers please.
I would hate it if Apple released anything below 900$. It just makes the Apple brand look cheap, and crappy. And it allows all these other people to be carrying around a fruit logo when they shouldn't be. In the end Apple will just dilute their brand. Please Steve Jobs - don't do it!
People like you are the reason there's a lot of hate for Mac users out there.
they simply have to make the Netbook category better.
Price is a factor. If Apple can get away with a fairly stripped Macbook then it begs the question "just how much connectivity does the average person need?"
I think Apple's been planning a device like this for a while.
Quicktime X
Remote Disc
Cocoa Touch
LLVM/CLANG
P.A Semi/ Papermaster
All point to not necessarily just new iPhone models but rather a new class of portable computing devices.
I would hate it if Apple released anything below 900$. It just makes the Apple brand look cheap, and crappy. And it allows all these other people to be carrying around a fruit logo when they shouldn't be. In the end Apple will just dilute their brand. Please Steve Jobs - don't do it!
Mac Mini? Though it hasn't been updated for over a year and is pretty crappy specs-wise.
Want an Apple netbook? Get a 12" PowerBook refurbished. Inexpensive, small processor, and practical. Maybe a smidge too big but none the less, it'll do the trick just the same.
The only problem I see with the 12" Powerbook is that they (probably) won't be able to run 10.6 or any future OS X release. Some of them (800MHz) can't even run 10.5.
Analyst Ezra Gottheil from Technology Business Research (TBR) cautions that Apple may no longer have the luxury of keeping its notebook pricing high when many buyers are much more concerned about price than they were even a few months ago.
The company has until now insisted on keeping its prices largely unchanged and instead has upgraded the specifications of its systems to maintain that price. That has kept its average selling price high but has also all but locked the company out of the entry-level and developing-world markets; these are now being joined by cash-strapped customers even within the US, making it that much less likely any of them will pay Apple's minimum asking price. At $999, the least expensive MacBook is twice or more the cost of the most frugal Windows alternatives, Gottheil says.
Gottheil dismisses the notion of an artificial premium on Apple products, noting that they often compete well for the features, but is certain that the Cupertino, Calif.-based company has reached a breaking point where perceived quality can't override genuine financial woes from customers.
"It is too much to ask consumers to pay more than twice as much for a PC in these times," the analyst says.
[...]
Still, TBR's analyst warns that buyers, including those looking at Macs, were "more cautious" even in the summer and that Apple in its current position would gain share mainly at the expense of its revenue as users opt for less expensive models whenever possible.
I fully agree. It's great to see that some analysts analyse instead of speculate or push a stock in what is called a 'pump and dump' operation.
All economic slowdowns/recessions have a finite life. In the US the longest recession, since WWII, lasted 18 months. This one is now 12 months old. That means this has only 6 months to go before it too fades into our memories. That duration isn't anywhere near long enough to cause Apple any concern about "cash strapped" consumers.
This is just another bullsh*t article based on nothing more than the author's desire to generate hits.
Really? Numbers please.
You don't need numbers- walk into any computer store or computer department-other than Apple.
I would hate it if Apple released anything below 900$. It just makes the Apple brand look cheap, and crappy. And it allows all these other people to be carrying around a fruit logo when they shouldn't be. In the end Apple will just dilute their brand. Please Steve Jobs - don't do it!
Well don't crap out when those $99 Walmart iPhones go on the market.