Apple

By not coughing up a low-cost MacBook, as some had expected, Apple has ceded a potentially huge market to PC makers. But is this just all part of Apple's marketing genius?

$999 is as low as Apple will go.

(Credit: Apple)

The announcement Tuesday of the $999 white polycarbonate MacBook was pretty ho-hum as product refreshes go (same price, same color as before) but the implication was important: Apple is surrendering a large, emerging laptop market to Microsoft and its coterie of PC makers.

Not that it's necessarily a bad strategy. Market researcher Gartner said recently that Apple's shipments in the U.S. grew year-over-year by 6.8 percent to total 1.57 million during the third quarter, putting it right behind Hewlett-Packard, Dell, and Acer. Comparatively, overall PC shipments in the U.S. grew by 3.5 percent from a year earlier.

But among those unimpressive overall PC numbers (HP's third-quarter shipments grew only 2.7 percent), was an impressive statistic for Acer: buoyed by Netbooks, Acer's shipments grew by 61.4 percent year-over-year, and it blew past Dell to become the No. 2 PC maker worldwide based on this growth.

Granted, Netbooks are a relatively low-profit segment (i.e., profit on a $400 Netbook is going to be a lot less than that on a $999 laptop). Nevertheless, they're a hot market. Intel CEO Paul Otellini has stated numerous times that Intel was able to create a market that grew faster than either the iPhone or Nintendo Wii. Case in point: Windows 7-based Acer Netbooks are now big on the Home Shopping Network--which claims to have sold more than 5,000 in one segment on Saturday.

And that's not the only market Apple is punting on. A new category of inexpensive, thin laptops has emerged with the roll-out of Windows 7 on Thursday. Like Netbooks, these laptops are light (typically 4 pounds) and don't include an optical drive. But they are relatively powerful and full featured. The 15.6-inch Acer Aspire Timeline, for example, with a 320GB hard disk drive and dual-core Intel processor is fairly well-endowed at only $500.

Apple is not receiving a lot kudos in the mainstream business press ... Read more

Concept art for an Apple touch-screen Netbook.

(Credit: Gizmodo)

If you've been following the Apple Netbook gossip along with us the last few months, here's the latest tidbit, courtesy of Barron's:

A "veteran analyst," albeit a very anonymous one, has allegedly seen and touched Apple's rumored "slate-style" PC, which we like to call the jumbo iPod Touch. According to Barron's source, the new product will be announced in September, released in November, and carry a price tag of between $699 and $799. As previously reported, the tablet (or whatever Apple plans on calling) is ready to go but has been awaiting final approval from Apple CEO Steve Jobs.

As for concrete details about the device itself, the veteran analyst had only one thing to say about his or her hands-on experience: "The machine impresses with its display of hi-def video content. It's better than the average movie experience, when you hold this thing in your hands."

Now there's a shocker. (I don't think you'd have to be a veteran analyst to predict that).

The article also goes on to say that the PC industry is basically on pins and needles as it waits to see what Apple puts out. According to the phantom analyst, PC makers have paused production on next-generation Netbooks until they see what Apple's come up with.

Interestingly, while there's been a lot of talk about this being a media-centric device with a little Apple TV mixed in (what you'd expect from a giant iPod Touch), Barron's quotes Jon Peddie, head of Jon Peddie Research in Tiburon, Calif., as saying it will be a gaming machine as well.

"Gaming will be a big part of what this [the new device] is about," Peddie said.

However, as far as we know, unlike the veteran analyst, he has not seen or touched the device.

Comments?

Via Engadget via 9to5Mac via Barron's (subscription required to view full article)

More good news for Apple this week: if consumers are going to buy an expensive computer, they're choosing the Mac maker.

That's according to the June tally of the PC market from The NPD Group. According to NPD, 91 percent of all computers sold at retail for more than $1,000 were Macs. That marked a slight increase from the 88 percent in May. But Apple officially owns that market, and it appears the price cuts across its MacBook Pro lineup introduced in early June helped. On Tuesday, Apple announced that it sold 13 percent more Macs during April, May, and June of this year than the same period a year ago, despite the recession and price-conscious consumers.

Is it sustainable for Apple to sell almost all their computers for more than $1,000?

(Credit: Apple)

Of course, all the computers Apple sells--with the exception of the $999 white plastic MacBook and the Mac Mini desktop--are more than $1,000, so they should own that market. NPD's numbers do not include specialty gaming PCs that enthusiasts usually customize and buy online, which can be well over $1,000. But, as NPD analyst Stephen Baker points out, two-thirds of all computers are sold at retail, so the numbers paint a comfortably accurate picture of what's going on in the PC market.

Windows PCs on average sell for much cheaper now because of the increased focus on price point aided by the Netbook phenomenon. The average selling price for a Windows PC at retail in the U.S. was $515, and for Macs it was $1,400.

That would seem to justify Apple COO Tim Cook's comments on his company's earnings call earlier this week, where he pretty much said Apple would never make a Netbook because the company doesn't think it can make a quality notebook for $400 or $500. ("We're going to focus on what we've always done. The Mac has outgrown market in 18 of the last 19 quarters. I think that says that we do have the right approach.")

Or do they?

A few tweaks of the MacBook and Apple could render the Netbook a non-issue.

At the risk of adding to the cacophony of gratuitous advice directed at Apple, the company could bypass the Netbook and go directly to the inexpensive "ultrathin" category--where Apple seems to be headed anyway with the incredibly shrinking price of the MacBook Air. In short, take the thin, aluminum unibody enclosure that is a MacBook and move it downmarket.

(Credit: Apple)

Ultrathins are Netbooks without the compromises. A light, small, pick-up-and-go design that has a reasonable size screen and the horsepower do to what a conventional laptop can do. That is, a slightly smaller, discounted--but not so cheap to be unprofitable--version of the MacBook Air or 13-inch MacBook Pro. (OK, there's the $999 white MacBook but that's not exactly the future of Apple design.)

And Intel chip designers are doing their best to enable this category (while keeping Netbook silicon static) by delivering a wide range of low-power processors that deliver mainstream laptop performance (I count 12 ultralow-voltage, or ULV, processors offered by Intel at present). Intel executives are doing their part too, spending a lot of time talking up inexpensive ultrathin laptops and, by insinuation, putting down Netbooks.

Ultrathins--when and if they arrive in volume--are expected to have a median price point of about $850 and be, at the most, one-inch thick (and, according to Intel, usually thinner).

The timing could be right. This report from CNET's Crave blog suggests that Apple needs to tone down its pricing to maintain market share. (Whether Apple really cares about maintaining market share is another discussion.) And there is a fairly steady drumbeat of commentary saying Apple needs to consider a cheaper laptop.

That said, there's nothing like the here and now. A consumer today can buy an approximation of an inexpensive ultrathin: a refurbished MacBook Air for $999. That's a start.

Concept art for an Apple touch-screen Netbook.

(Credit: Gizmodo)

We get a lot of e-mails from folks asking us when to expect a Netbook from Apple. Let's make something absolutely clear: despite all the previous rumors, we have no idea if, or when, such a product will exist. But we will let report to you when a new (or recycled) rumor pops in the blogsphere.

The latest: the Mandarin-language publication Chinese Times is reporting that Apple will release a Netbook in October. We tend to put a question mark on our rumor headlines, but there doesn't seem to be any question mark in the reporting here--at least according to a translation of the article that appeared within MacRumors.com's forum.

Naturally, this all comes from a "reliable source." Here's the key quote in the article (again, we are going by the translation that appeared on MacRumors):

Taiwan's high-tech supply chain companies said Apple will debut its first Netbook in October; Apple will pose itself to tackle the Christmas shopping season. Three (Taiwanese) corporations--Foxconn, Wintek, Dynapack--have received direct orders from Apple. (Wintek will be producing touch screens and providing relevant technologies for Apple.) In addition, some supply chain companies have privately confirmed deals related to Netbooks."

The report also goes on to add that "Apple will not follow the current market trend (by producing Netbooks with screens about 10.2 or 10.1 inches in diagonal length). Instead, Apple will produce (touch) screens with about 9.7 inches in diagonal length." As to cost, word is that it will come in around $800, which is about what we'd expect an Apple Netbook to cost (if the company decides to make one).

There are also some interesting updates tacked on to the MacRumors post as additional stories have come out. One update says there are "unconfirmed rumors" that British reporters pried Apple Netbook info out of several Foxconn Electronics employees and that although Foxconn refused to publicly comment on the rumors, the reporters may have gotten some sort of private confirmation on the rumors' validity from the company itself.

Again, these are all rumors, and with Apple, you never know what kind of bizarre smoke screen it might put out there. But in the past, the company has had some issues with leaks coming out of its suppliers in Taiwan, so we're thinking there might be some truth to this one--especially since the same rumor hit back in March. Either way, we do expect Apple to release new iPods this fall (as it has the last few years). Whether one of them will be a giant iPod Touch remains to be seen.

Comments? Do you think Apple really will do a Netbook this year?

Source: Gizmodo via MacRumors via China Times (original article in Mandarin)

Apple seems almost ready to bridge the gap between the iPhone and the MacBook with a new type of mobile computer. What will it look like?

(Credit: Tom Krazit/CNET News)

Apple is rumored to be working on something bigger than an iPod Touch, but smaller than a MacBook. Past patent applications filed by the company and whispers from contract manufacturers point to a midsize gadget with a screen of 7 to 8 inches in the works, perhaps scheduled to debut early next year. It's been variously described as a tablet-like device, a "media pad," and an iPod Touch on steroids.

But the middle ground between handheld device and traditional laptop has historically been a hard sell to mainstream consumers. Apple has some experience reinventing what were thought to be staid or failed product categories, and is known for its stringent product review process, so if anyone has potential to make something compelling for this "tweener" category, it's the company to do so.

For Apple, this could be its answer to the Netbook craze--20 million of those scaled-down PCs will be shipped to retailers this year, doubling last year's output. Apple has been fairly clear in its distaste for them, using descriptors like "junky," and the average selling price of around $400 wouldn't allow Apple to keep its margins as high as it's used to.

But there is clearly a market, particularly given the current state of the economy, for a device in that middle range between a smartphone and a laptop. Interim CEO Tim Cook recently admitted that Apple has "some interesting ideas in this space."

Let's say it does make one. What exactly should a tablet from Apple do and what kind of features does it need to sport to avoid the pitfalls of every other failed tablet PC, ultramobile PC, and mobile Internet device now gathering dust in the basements and desk drawers of early adopters?

Some suggestions:

This was originally published at ZDNet's Between the Lines.

Apple is likely to launch a tablet that's similar to the iPod Touch, but larger, in the first half of 2010, marking the company's entry into the Netbook race, Piper Jaffray analyst Gene Munster says.

In a research note Thursday, Munster handicaps the gaps in Apple's product lineup. The gaping hole: there's nothing between the iPod Touch and the MacBook. Enter this iPod Touch on steroids for $500 to $700.

Apple Chief Operating Officer Tim Cook called Netbooks junky, but he never dismissed the consumer demand for them.

Munster writes:

Between indications from our component contacts in Asia, recent patents relating to multi-touch sensitivity for more complex computing devices, comments from Tim Cook on the April 22nd conference call, and Apple's acquisition of P.A. Semi along with other recent chip-related hires, it is increasingly clear that Apple is investing more in its mobile computing franchise.

Specifically, we expect this to result in a larger (7-inch - 10-inch) touchscreen tablet that will launch in 1H CY10. Additionally, Apple's consistent message that it refuses to launch a "cheap" portable netbook, and its desire to differentiate itself in a maturing market before it's too late (similar to the timing of iPod and iPhone), plus its gradual addition of multi-touch technology to all of its core products (iPhones, iPods and Macs) leads us to conclude this product will be a touchscreen tablet (not a netbook).

Apple's game plan will revolve around its multitouch patents to cook up something different from your generic Netbook. Munster's theory makes a lot of sense. A Netbook would tarnish the Mac's average selling price and potentially cheapen the Apple brand. A tablet wouldn't. Double bonus: a Mac tablet would compete with Amazon.com's Kindle e-book reader.

What's the OS look like? Munster has an answer for that too:

We are anticipating a new category of Apple products with an operating system more robust than the iPhone's but optimized for multi-touch, unlike Mac OS X. The device's OS could bear a close resemblance to Apple's mobile OS and run App Store apps, or it could be a modified version of Mac OS X. We expect the development of such an OS to be underway currently, but its complexity, along with our conversations with a key company in the mobile space, leads us to believe it will not launch until CY10.

Is Apple too late to the game? Not really. Apple was late with the iPod, and we saw how that turned out. Ditto for the iPhone, which came five years after the first BlackBerry. Relatively speaking, Apple's Netbook killer would be a fast follow.

Here's a closer look at Munster's argument for a Mac tablet and not a Netbook:

Why Not A Netbook?

• A low-cost netbook would serve to cheapen the Mac brand and lowers Mac ASPs (average selling price).

• A netbook with OS X on it would cannibalize MacBook sales, offering a new portable with OS X for a lower entry price. Apple could curb this effect by offering a slimmed down version of OS X without the iLife suite pre-installed, but we see this as unlikely, as its fully-featured approach, particularly with iLife and digital media, is a core selling point for the Mac brand.

• Perhaps most importantly, a netbook would not differentiate Apple's product from other netbooks entering the market, and as we have seen with the iPod and the iPhone, Apple prefers to enter a market once they can offer a significantly differentiated and often premium version of the product.

Why A Tablet?

• Component contacts in Asia suggesting there are no prototypes, but discussions about required components are underway.

• Recent patents relating to multi-touch sensitivity for more complex computing devices.

• Apple's acquisition of P.A. Semi along with other recent chip-related hires leads us to believe that Apple is investigating making its own chip for non-Mac mobile devices. We presuppose that Apple is content with its relationship with Intel, and decision to move the Mac platform to Intel based processors. We think the recent activity related to chips has more to do with development of a mobile device.

• Comments from Tim Cook on the April 22nd Conference Call. See quote below.

"Well, you know, for us, it is about doing great products. And when I look at what is being sold in the netbook space today, I see cramped keyboards, terrible software, junky hardware. Very small screens. And just not a consumer experience, and not something that we would put the Mac brand on, quite frankly. And so, it is not a space as it exists today, that we're interested in. Nor do we believe that customers in the long-term would be interested in. It is a segment we would choose not to play in.

"That said, we do look at the space and are interested to see how customers respond to it. People that want a small computer, so to speak, that does browsing and e-mail might want to buy an iPod Touch or they might want to buy an iPhone. So, we have other products to accomplish some of what people are buying netbooks for. So, in that particular way, we play on an indirect basis. Then, of course, if we find a way where we can deliver an innovative product that really makes a contribution, then we'll do that. We have some interesting ideas in the space."

Concept art for an Apple touch-screen Netbook.

(Credit: Gizmodo)

Updated at 4:09 a.m. PDT March 10 with new information from Dow Jones Newswire. This story was originally posted at 9:44 a.m. PDT March 9.

Take this for what you will, but the Apple rumor mill is churning with word that the company has a touch-screen Netbook in the works that will hit the market in time for back-to-school sales later this year.

Citing an article by the Chinese-language Commercial Times, DigiTimes reported Monday that "Taiwan-based Wintek will supply touch panels for Apple's new Netbook, and shipments will start in the third quarter this year." DigiTimes also claimed that Quanta Computer will manufacture the new device.

Now Dow Jones Newswire has posted an updated story that expands on the DigiTimes report. "The mini laptop computers will likely have monitor screens that are between 9.7-inches and 10-inches," an unnamed source told Dow Jones. Another person added, "Other specifications and functions are still under evaluation." The report also claimed Wintek would make the touch-screen displays and Quanta would assemble the new computers.

Chiming in on the rumor, Engadget posted a mock-up of an Apple Netbook that has a keyboard. Meanwhile, Silicon Alley Reporter stuck with its earlier speculation that Apple will simply do a larger version of the iPod Touch (it's calling the device the iPod Touch HD).

Personally, I'd rather see Apple go with a more straightforward Netbook approach that simply adds some Apple design flair to 10-inch Netbooks already on the market, with three models ranging in price from $599-$799.

Of course, Apple could just bring the price down on the MacBook Air and indeed bulk up the iPod Touch to differentiate its "Netbook" from other Netbooks already flooding the market.

Thoughts?

Could falling demand for Apple notebooks be offset by an Apple Netbook?

(Credit: CNET)

Apple's Mac division was able to withstand recessionary pressures last quarter by neutralizing a decline in desktop sales with a sharp rise in notebook sales. Will it continue?

A new survey released by ChangeWave Wednesday makes it clear that despite a relatively strong first quarter, Apple is not out of the woods yet. Of respondents planning to buy a notebook in the next 90 days, the percentage of those planning to buy an Apple notebook fell six percentage points to 28 percent, as compared with November's survey.

The overall percentage of respondents planning to buy a notebook fell from 8 percent in November to 6 percent, so it's not just Apple that's feeling the pinch. And consumer electronics spending is on the wane as well, with the percentage of those planning to spend more on consumer tech over the next 90 days falling to a two-and-a-half-year low.

But Changewave says that decline is being partially offset by an increase in demand for Netbooks, a category where Apple is taking a wait-and-see approach. The research firm concludes its report by opining that Apple could be in trouble without a Netbook, because the PC market is growing increasingly price-sensitive as the recession takes hold.