Apple execs heap scorn on netbooks

But analysts think it's a smoke screen to mask an upcoming touch-screen tablet

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If all else fails, Cook said, Apple may decide, after all, that netbooks are worthy of its attention. "Of course, if we find a way where we can deliver an innovative product that really makes a contribution, then we will do that and we have some interesting ideas in the space."

Smoke and mirrors, said Marshall. "They're sticking to their guns in term of the company line, but they'll do something, probably a combination netbook and tablet using a 10-in. screen," he said.

"I definitely think they'll come out with a netbook or tablet, or netbook/tablet, in the second half of this year," Marshall continued. Reports last month claimed that Apple had placed large orders for 9.5-in. to 10-in. touch screens. "It'll be about the size of the MacBook Air, with a touch screen that can be swiveled so that when the device is closed, the screen will be on top. And with a 10-in. screen, you can have almost a full-sized keyboard."

Ezra Gottheil, an analyst at Technology Business Research Inc., joined Marshall in dismissing Apple's public comments about netbooks, but sees the future device somewhat differently. "They may not make it with a keyboard," Gottheil said. "There was talk [by Cook] about 'cramped keyboards.' I think it would be a mistake to make the keyboard not essential, but every company has its prejudices, and Apple is not a keyboard-friendly company."

Gottheil, however, believes that Apple's entry into the netbook-priced market -- or as close as Apple will come to the $300-$500 price point that most consider the netbook maximum -- will be based on a touch screen. "It'll be slotted [in price] between the iPod Touch and $999 MacBook," he said. "When it comes down to it, from a platform point of view, it's an iPod Touch, but from a form-factor point of view, it's got to be a good deal bigger."

Apple would be foolish to ignore the space, Gottheil argued, since the company's average sales price (ASP) has dropped as customers have opted for lower-priced models, such as the $999 MacBook, the $599 Mac Mini, and rather than a MacBook Pro, settled for a new "unibody" MacBook.

"Apple ASPs were down 13% year to year," Gottheil said. "Customers are increasingly choosing the less-expensive models, including the Mac Mini, which costs $600 without a monitor, keyboard or mouse."

At risk, said Gottheil, are sales to people who have been using Windows-based PCs. Previously, Apple has touted the percentage of such "switchers" who bought machines at its retail stores, but yesterday, executives didn't mention the statistic. "The shaky economy and the appeal of netbooks is slowing Apple's conversion of Windows users to Apple users," he said.

Both Marshall and Gottheil have previously talked about possible Apple answers to netbooks. In February, Marshall spelled out how Apple could sell $599 system and still make money, while Gottheil pitched the idea last year that Apple would use January 2009's MacWorld conference to unveil smaller, less-expensive laptops. Apple, however, did not.

But maybe Apple should be taken at its word. After all, Cook concluded his comments about netbooks with an especially harsh description. "I think it's a stretch to call [a netbook] a personal computer," he said.


Copyright © 2009 IDG Communications, Inc.

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