Rebuttal: Apple is Already Selling a Netbook

Our esteemed Bryan Chaffin, TMO's Executive Vice President, and I have been in agreement for a long time that Apple would eventually release a product we like to call an "iPod super touch." (iPST) However lately, I have surmised that Apple will also do a netbook Apple's way and that the iPST will come later. Here's my rebuttal to this morning's "Back Page" by Mr. Chaffin.

The logic I used to forecast an Apple netbook, MacNetBook, is that it's a growing market that Apple can't afford to ignore. It is illogical to argue that if Asus, Acer and MSI can make some money on a US$250 netbook that Apple cannot make money on a $699, 10-inch MacNetBook.

I'll go even further and claim that Apple is already selling a MacNetBook, on a trial basis, to gauge the customer response, and that's the white polycarbonate MacBook that Ted Landau explained yesterday. This Mac is primarily of interest to education, keeps the price below the magic $1,000 point, and provides a technical platform for Apple to diverge into the Netbook. It's a place holder, essentially, until the aluminum MacNetBook launches with a 10-inch screen and no optical drive.


White MacBook

Apple's Prototype MacNetBook Platform?

How would Apple reduce the price without killing the profitability? We already know the answer there as well. Apple showed, with the MacBook Air, that if it creates a really cool, focused product, and gives people alternative solutions to some missing technoloogies -- such as the remote use of a SuperDrive -- then people will gobble the product up. What could be cooler than a 780 gram aluminum MacNetBook with a 10 inch screen, good keyboard and nothing but Wi-Fi and a 128 GB SSD? No iSight. No Ethernet. No FireWire. No optical drive. Just a beautiful keyboard and glossy display. It would hardly compete with the MacBook Air with its larger 13-inch screen and the 13-inch MacBook with its built-in optical drive and lots of ports.

The reason I think the iPST will come later is because there is not a known, established and large market for such a device. Right now, it doesn't fit into the staging strategy of most users. Sure, we all want one. But we're in the minority. It has to appeal to millions before Apple gets interested.

When I pondered its development, calling it the iPad, I presumed that there would have to be a special sauce, something unexpected come along, to make the iPST compelling. A mass cultural imperative. However, when people are cutting back in a recession, even those who are in a good financial position (for the time being anyway), will resist superfluous toys unless the case is a slam dunk.

For example, What if Twitter were to grow, morph, and emerge as something we haven't imagined yet? What if Twitter, with expanded capabilities were to emerge as a major national obsession (it is already!) at the same time as the newspapers in this country, with Google's help, get it all figured out. The portable iPST would suddenly become the "must have" device for video news, newspapers, books, and Twitter 2.0.

I bring that up to get our juices and imagination flowing, not because it's a hard and fast prediction. But history has shown that when a company like Apple is tuned into the emerging technology consciousness, it can spring forth with a compelling product while other competitors were asleep, holding the fort in the recession. I believe, along with Piper Jaffray's Gene Munster, that the iPST have to wait until 2010 when emergence from the recession (hopefully earlier!) brings a new sense of technological excitement and experimentation -- all driven by an unexpected emergence of a new, killer app for it - perhaps Google's Wave.