The argument is raging throughout the Apple community: can Apple afford to ignore the netbook category? Or is a netbook just a distraction from Apple's low volume, high quality approach? In a thoughtful essay, John Edwards at Computerworld pointed out a problem that hasn't yet dawned on many: major security issues with corporate netbooks.
Briefly, here are the issues cited:
- A netbook is forced, by size and power, to use older technology. That means it must forgo modern security software and hardware that can quickly encrypt/decrypt/protect data and scan for malware.
- Older, less capable or stripped down OSes are used.
- A netbook is easier to misplace because it's so small and light.
- Security is taken more lightly because the netbook is unimposing, almost toy-like.
- Thieves will find it easier to steal because it's easier to conceal.
The article by Mr. Edwards pointed out that, even if the solutions are better on the Mac side, many considerations go into the design of what amounts to a new platform.
- Can it meet the security requirements of enterprise and government IT managers?
- Are there psychological and social factors that could lead to a compromise of sensitive data? For example, corporate users could be required to keep their home directory on an encrypted flash key and insert it into the netbook at boot up. How many users can adhere to such a protocol with 100 percent consistency? They have enough problems leaving their mobile phones in restaurants and taxis.
In other words, despite the clamor on the PC side, does the commitment Apple would have to make in terms of hardware and OS engineering, recertification, industrial design, manufacturing process changes result in a compelling financial picture?
I've seen plenty of articles that suggest Apple must get into this market, but few financial analyses. (This article on Monday at Seeking Alpha by Turley Miller gets into some details and most of the logic.) How many units would Apple sell? What would be the cost of parts? Gross Margin? What percent of MacBooks would be cannibalized? It would take a convincing spreadsheet to show how Apple makes money on a device whose primary virtue is that it's cheap and competes against other netbooks with high volumes and razor thin margins.
Mr. Edward's article reminds us, with the security considerations, that there's a lot more to jumping into a market than just responding to the sensationalism on the Internet.