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.
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.