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News   - 03/11/2009

Apple's New Netbook: Largest iPod Touch, or Smallest Mac?

The Big Question About The Rumored Apple NetBook: Will It Run MacOS?

Dow Jones Newswires is confirming reports yesterday that Apple plans to introduce a Netbook. The story says that Taiwanese display maker Wintek Corp. is providing 9.7 to 10 inch screens to huge PC contract manufacturer Quanta Computer, and that the device will be on the market in the second half of the year.

But assuming the reports are true, what exactly is this device? Given Apple’s increasing dominance of the most profitable parts of the computer business—the part built around PCs costing more than $1000—I find it hard to believe that the company will offer the same kind of lower-powered, margin-crushing $300 or even $500 netbooks that are now shaking up the Windows PC industry. Everything about Apple’s history would suggest that Steve Jobs will want to protect his profits, rather than dive into the muck of a nearly-profitless business just to maintain share. And while one can argue that Apple needs to offer cheaper devices in this economy given plummetting consumer spending, one might also argue that the worst time to get in a price war is when sales are so tough to come by. It’s one thing to slash prices when times are good; at least you get the big bump in revenue, and can spread your fixed costs across more units. In this environment, it may make more sense than ever for Apple to stick to its more discriminating clientele.

Source: BusinessWeek    
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