Mac Netbook-Schmeckbook! It’s an iPod Super Touch, I Tell You!

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The Apple rumor and speculation craze is going crazy right now in anticipation of the company's impending WWDC announcements, an expected iPhone update, the release of iPhone 3.0 software, and more rumors coming out of Apple's Taiwanese manufacturing facilities than you can shake a stick at.

Earlier this week, John Martellaro, my colleague at The Mac Observer and one of the most gifted analysts in the Mac ecosystem, made the case that Apple will release a bona fide Mac netbook. A lot of folks agree (others disagree), but I thought I'd make a counter-argument.

Here goes: Poppycock! Balderdash!

OK, maybe I should add some substance to my counterargument. smile

I've already written about how Tim Cook has laid out exactly what Apple will be doing to address the Netbook market, but I think Mr. Martellaro raised some really interesting points that invite further discussion.

The real heart of the issue of how Apple will address the growing market for netbooks, from my perspective, is not the existing market itself, but rather the need that the existing netbook market is filling that holds the key to understanding Apple's intent. Apple execs have continually slammed current netbook efforts as being "junky" and cheap, while at the same time acknowledging that users want something very small and portable.

So let's look at that need: As near as I can tell, there are two driving factors for the netbook market, price and tinyness. There is zero doubt that the economic crisis that manifested in 2008 has added to the demand for inexpensive devices, but I think the market for ultra-portable, mostly-functioning computers would have arrived sooner or later, with or without an economic crisis.

The problem, in terms of the Mac market, is that Apple doesn't do cheap well (in 2008 Steve Jobs noted that his company hadn't yet been able to figure out how to make a cheap computer that wasn't a piece of junk). Even if you throw in Apple's part-saving unibody case manufacturing process into the mix, you still can't get "cheap" without being underpowered, or bulky, or by using inferior parts.

For instance, the quality of Apple's keyboards isn't something you can do cheap, and Apple would be sacrificing some of its status as a premium brand if if compromised on that, or on the display quality, or on the case materials, or the quality of the hinges holding the lid on a netbook, or the cooling system...

Indeed, no company can make a cheap netbook without it being just that, cheap. Right now, Apple derives enormous amounts of marketing and perception power by being a premium brand, and putting something out to compete with the crappy netbooks that are out there is not worth the tradeoff required for such a move.

Even worse, if Apple could make a quality cheap netbook, it is my belief that such a device would cannibalize MacBook sales (John Martellaro disagrees), and that sort of marginalization of the product line and reduction of ASP (average selling price) would not benefit Apple's bottom line.

Back to that issue of user need, what is it that people want to do on netbooks? I don't have those specific answers, but Apple does. Hell, even Asus and Acer and the other netbook PC makers have that information from marketing studies...it's what you do with it that counts.

Fortunately, however, I am not afraid to make some educated guesses. Folks seem to want to be able to do e-mail, tweet, browse the Interwebs, maybe do some blogging or light writing. Perhaps others like to watch movies or other video, or maybe listen to some tunes while their flipping through photos with a friend. These are, of course, things people can and do on their iPhones and iPod touches.

But, while both devices are great for standing on the street or sitting in a car -- and will do in a pinch at the coffee shop, they aren't as good as even a netbook if you have a little more room, or are settling in for a few hours of reading or writing. I'm finishing this column, for instance, on a MacBook Pro at a coffee shop, and wouldn't want to be doing it on my iPhone, even though I could.

Looking at the issue even more personally, I enjoy catching up on the news or playing some Doodle Jump in bed before going to sleep. Sure, I might also playing some other game on my MacBook Pro, or do some writing or reading with it in bed, but a form factor between the two would be nifty for such an application.

Many of you can also likely think of plenty of other specific applications for something like a netbook, and the truth is that a netbook can serve those functions just fine, if not in an "exceeds expectations" kind of way.

More importantly, I think that Apple believes it can meet this emerging market demand with a different kind of device that meets the price point people seem to want to pay without sacrificing on the kind of quality Apple has worked so hard to attach to its brand.

By building off the iPod or iPhone brand (I think it will be an iPod), the company won't be risking its Mac reputation. By building it on the iPhone OS instead of Mac OS X, Apple won't have to risk tarnishing Mac OS X as a full-featured, amazing computer OS.

By putting it in the iPhone/iPod family, Apple can leverage the amazing App Store and the tens of thousands of developers the company has attracted to the platform. By leveraging the iPod touch form factor, the company can introduce a product at the right price point, with the right quality, without asking people to shift paradigms on what a computer is -- people already know what an iPod touch or an iPhone is.

To throw one more thing into the mix, if it has a built into 3G connection, Apple can sell it through its carrier partners such as AT&T at a subsidized price, making it even more accessible to this emerging market.

When I combine all these things with everything Apple has done to disparage the existing netbook market, its investments in chip makers and GPU-oriented executives, and the leaks coming out of Taiwan, I can reach only one conclusion: Apple will be releasing a large iPod touch/small iPhone-OS based tablet, and that it won't be a Mac netbook.

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12 Comments Leave Your Own

Josh

Good analysis.  I think such a device would have a market, but it would only appeal to me if it addresses my concerns about input devices.  Stylus, bluetooth keyboard, or both. The software keyboard on my iPhone is great for the texting, browsing, and occasional short email but anything longer and I’d rather gnaw my hands off.

acdc1174

I agree with your analysis Bryan.  I wonder though, how many people will be willing to pay for ANOTHER data plan for such a device?  As much as I would love to see such a tablet and would buy between 1 and 3 of them, there is no way I would pay $20-$60 a month for a 3G data plan for it.

achaar

Interesting.  I want it to take to meetings and keep notes on.  Use it like a PDA.  My iPhone works, but this would be better.  I would be willing to add a data plan to it.  That just makes it a much more useful tool.  I bet many business people would latch on to it.

CP

There’s only one way to settle this: Martellaro/Chaffin cage match at WWDC. The winner gets a new MacNet or iPod Gigante. I’ll take Martellaro because of his military training.

John Martellaro

CP:  Don’t forget those 8 years of Karate (Kenpo) training.  grin
  -JM

no mas

This is a device I could really like, but I won’t pay for another data plan - I’m already paying for the iphone plan,and an internet connection for my home MBP, and a digital DVR plan for my media center through my cable provider, etc. etc. None of these plans are cheap, and another $30 or so monthly would be way over the line.

Why not something like a Kindle?  Find a way to provide 3G once and for all, with the purchase of the device.  I do have a Kindle, and that’s what sold me on it.  I wouldn’t have got it otherwise (and my work pays for it, at that.)

John Martellaro

I agree on the data plan issue.  That’s why I think the device will be Wi-Fi only.

timer

This “netbook” is straddling too many categories.  Why not just build on top of what is there already.  How about a 10 inch touch screen “dock” for the iphone/ipod touch.  Build in a big battery so it can also charge them.

This would make a cheap device that in essence runs the iPhone OS.  The form factor would not allow for the finder anyway.  It obviates the need for another data plan and connectivity hardware.  It will also push the sale of existing, well worn devices that already stand on their own.  It builds on top of the App Store.  It can even allow for external connections.  Is there not rumor that Apple is building in support for external hardware into the iPhoe OS?

Bryan Chaffin

FYI, I am in a weight class a couple of orders above John, but it’s…not muscle. And, while I have youth on my side (comparatively speaking), my money would be on John, too.  Military, Karate…I’m toast. smile

Thanks for the cage match suggestion!

BurmaYank

... I won?t pay for another data plan - I?m already paying for the iphone plan,... and another $30 or so monthly would be way over the line.

I think would, gladly, pay another $39.99/mo. for an ATT 3G SIM card built into my next MBPro or MB Air or white MB or iPod Super Touch or MacNetbook or MacTablet, if ATT would allow me to do so under its “Add a Line to FamilyTalk” (at $9.99/mo. for a “2nd line” plus $30/mo. for unlimited 3G on it).  Then, I could probably drop my cable internet and cable TV service, especially if the 3G uses 7.2 HSPA.

That’s what Apple should do; build a 3G SIM card slot into all its next portable Mac OS devices.  I’ll bet ATT would make another killing off that.

acdc1174

Then, I could probably drop my cable internet and cable TV service, especially if the 3G uses 7.2 HSPA.

Sounds good until you come up against 5GB monthly caps for these mobile broadband plans.

Zarko

I think that the 3G supertouch fails miserably.  It sounds to me that proponents of the supertouch imgaine it as a lifestyle and around-the-home device, making WiFi a better fit (for cost, speed and coverage).  It seems to me that many of the people who want a better-than-iPhone mobile device would want a real keyboard, and bluetooth would make the thing less portable.  Try and imagine using a bluetooth keyboard and tablet on a park bench, for example.  And a 10/11 inch netbook can still have a full size keyboard by going edge to edge (like the PB 12 as opposed to the 1 in each side gusset on the MB13/air)

I think the supertouch fails in general because the iPhone paradigm can only get so close to a fully fledged computer without wanting for being a real computer.  With a $600-$800 price point, the device would need to have a robust operating system, and, say, have a file system. 

Both Sony and now Lenovo have announced premium netbooks which are small but not shoddy and reasonably powered (the Sony runs Vista), and sell for a premium above standard netbooks (~$700).  Apple could certainly make a product that had quality components and ample power (like the air), which could maintain apple’s brand and quality while filling a niche that many mac users wish existed.

Your argument seems to argue that apple couldn’t make a netbook work for apple, so they will make the iPad instead.  I disagree.  The netbook has a proven market, not just based on price, and one which apple could work it’s magic on.  The Super Touch might be the next Apple TV.  Cool, yes, but how many people will find it worth the price?

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