During an earnings call today, Apple COO tim Cook took a moment to address a question that’s been asked a lot over the last few months: What does Apple think of the netbook market? Cook’s response was that Apple is watching that space, but that the produces are “based on hardware that’s much less powerful than we think customers want, software technology that is not good, cramped keyboards, small displays.” Summing up, he said Apple doubts people will “be pleased with those type of products.”

The comments should hardly be surprising. After all, Steve Jobs said essentially the same thing back in October. But given all the pre-MacWorld buzz about the possibility of a MacBook Mini, I’m sure Apple’s continued commitment to not releasing a cheap ultraportable will come as a disappointment to some.

Of course, if Cook was right about customer dissatisfaction with netbooks, you wouldn’t know it by sales figures. Low cost mini-laptops are the fastest growing segment of the laptop computer market. According to a recent Gartner report, PC shipments were up during the fourth quarter of 2008, which is pretty impressive during a recession. But revenue from PC sales was down. Know why? Because a large number of those PCs that are shipping are low cost ultraportables.

And that’s a large part of the reason why Apple doesn’t want to jump into the netbook game right now. Because Apple sells pricey computers. The cheapest MacBook sells for $999. If companies like Dell, HP, and Lenovo, which make a wide range of laptops with a wide range of prices are worried about netbooks cannibalizing the sales of premium products, how must Apple feel? The company only sells premium products.

There may come a time when demand for mini-laptops that weigh less than 3 pounds is so great that Apple will feel the need to produce something like a smaller MacBook Air. But I’m betting it will be priced more like the Sony Vaio P than the Acer Aspire One.

I’m not sure it makes much business sense for the company to slap OS X on a $500 device unless Apple is certain that it can sell a lot of netbooks to brand new customers thus expanding the company’s customer base or convince a lot of MacBook Pro owners that they need a portable companions. Because if it can’t, Apple would probably be cannibalizing the sales of more expensive Mac products.

In the meantime, I’m sure we’ll continue to see hackers figure out how to install OS X on existing netbooks like the Dell Inspiron Min 9, Eee PC, and Lenovo Ideapad S10.

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7 replies on “Apple updates its stance on netbooks: Still no”

  1. They certainly could have something in the works, but because the market isn’t very good, I’m not sure they could command a premium for a higher end netbook right now. They’d almost certainly have to start at $499.

    But to ignore the segment (which I don’t think they’re doing) would be a mistake IMHO. I’ve got a MacPro, 2 MacBooks, and a 12″ PowerBook in my household and I’m typing this on my Aspire One. I love it and the portability is really the difference maker. I did change the wireless to an Airport Extreme for N and upgraded to 1.5GB, but it really does everyday tasks with decent speed.

    And as far as an iPhone or Touch doing similar things, I don’t agree. I’ve tried to browse awhile on my touch and any amount of typing gets to be painful and full of errors. Hopefully, they’re just polishing a MacBook Mini or Nano up for release.

  2. Apple is not interested in what we currently understand as netbooks because the company is technologically and financially capable of making something that far exceeds them.

    When Company A disses Product B it is usually because A’s competitor to B is not ready yet.

    > I’m not sure it makes much business sense for the company to slap OS X on a $500 device

    iPhone and iPod Touch both run a version of OS X. So far it’s made plenty of business sense to put OS X on those products, and all indications are that Apple will continue in that direction. Notice that Apple recently decoupled the word “Mac” from the OS X trademark.

    From such actions, the recent analyst calls, and the success of the iPhone/iPod Touch apps, it looks clear that Apple is going to go forward with more portable touchscreen devices that will compete for mindshare and marketshare with netbooks.

    Eventually such devices could replace the Mac, much as the Mac replaced the Apple II.

    1. i wish apple would see these are DIFFERENT devices to normal notebooks. i have two netbooks (first 7″ screen eeepc gets little use now i have an Acer 1). they are great for quickly booting/hibernating and for typing emails/documents.

      for more serious tasks (and games), notebooks make better sense with their DVDs, bigger screens and GPUs.

      when figures say sales are up in a depression, perhaps it’s just that netbooks are pushing the envelope on price/portability. it will be interesting to see what sales are like in another 12 months time when all the early adopters already have one (or two).

      when i go to the local office supplies shop there are certainly a lot of people tinkering with the netbooks. kids seem to love them. parents probably love the price although some regular notebooks are probably better buys. they seem to fit in somewhere between toy and tool.

      if apple were smart, a netbook (with cutdown OS X) could introduce a lot more people to the apple world. get more people to see how much better OS X is compared to Vista and you should see market share grow. it worked with ipods. many people would never have bought an iMac until they bought an iPod… me included!

      i have a feeling apple have something in the wings. let’s hope it’s not like the sony overpriced one though. i would love a sony p series but the pricing is just too hideous. yes, i know it does a lot of other things (GPS etc) with that amazing res screen. they just need to be half the price to be real world contenders.

  3. What you hear/read from Apple is “projection” at best, “spin” at worst.

    “[our] customers would not be happy/want such a machine”
    Translation:
    “people who do not want the machines we make are not our customers”

    They provide machines which meet their business model for
    their specific market segment (high dollar machines) – –
    And then project (or spin) those decisions onto the general public.
    I.E: If the buying public where knowledgeable buyers, they will buy from us.

    Sound familiar? It should if you grew up in Detroit. 😉
    Once home to the “big three” now home to the “smaller three of four”.
    With #1 being Toyota and #2 (GM) on the edge of bankruptcy.

    Lots of luck Steve, with your similar business strategy.

  4. It’s basically comes down to money money money.
    Atom is powerful enough to run most applications on a very satisfactory level.
    Problem is it’s a low profit margin market and hence Apple doesn’t want to play.

    Mac sheeps shouldn’t buy into whatever Apple PR spills as the truth.

    1. another thing that could be a issue is that iirc, osx makes heavy use of the graphics card for its interface “bling”.

      that is, until one can get a nvidia or ati gpu inside a netbook, im not sure apple will want to compromise the users experience of the osx interface.

      apple is very much into candy coating their products, imo. and it seems to draw customers, just look at most postings about the iphone, there is more talk about the “flawless” interface experience, then just about anything else.

  5. Apple actually refreshed their low end notebook the other day. They added an NVidia graphics processor to the white plastic 13″ MacBook. So they are paying attention to their least expensive laptop.

    I”ve been using a white plastic MacBook and an MSI Wind lately. I think Apple could sell something in between, with an 11 or 12 inch screen. I bet people would buy them at $700.00 or $800.00, and Apple could make money at that price.

    I still think that Apple wants a dual core processor in any laptop or netbook they will make in the future..That means none of the current Atom processors are good enough. Cook’s remoarks seem to support that.

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