Ron Schenone

Apple Dismisses Netbooks As Junk – Netbook To Reach 22 Million Units Sold in 2009

Posted by on May 5, 2009 | 14 Comments

Two weeks ago I wrote an article about how Apple viewed the current netbooks as no more than pieces of junk. [Apple + Netbook = No Way!]  The comments reflected that Apple would not put their name on low quality devices. But now it appears that Apple may reduce the pricing on their least expensive MacBook from $999 to $849. Could this be in response to Apple trying to grab some of the estimated 22 million netbooks sales that will happen in 2009?

Apple had a brief, but short lived, surge during the time that Vista was being dragged through the mud. Those Apple vs PC commercials were effective and Apple did have a spurt of growth. But substained growth requires more than just bad mouthing your competitors.

It also requires more than just blowing off your competition as producing junk. Netbooks are popular because they do work and they are very cost effective. They are not meant to be a total laptop replacement, but IMHO, more of a supplement. Though some are using the netbook for day to day work.

According to an article at Fortune it states that:

According to AppleInsider’s Kasper Jade, Apple sees the cuts — which could come in the next month or two — as an “interim solution” to the growing popularity of netbooks, those sub-compact laptops that Steve Jobs once dismissed as “a piece of junk” but which are flying off the shelves at $299 to $349 apiece.

For example Acer, whose Aspire One netbooks are Amazon’s bestsellers, saw its U.S. market share grow 49.4% (to 13.6%) in the first quarter of 2009, according to Gartner Research, even as Apple’s share shrank to 7.4%, down 1% year to year. Mac sales actually fell last quarter for the first time in nearly six years.

How low will Apple go to turn that around? Jade’s reporting — based on unnamed sources “familiar with the matter” — is fuzzy on that point, but in the comment stream he makes it clear that he’s talking about price reductions in the range of $100 to $150.

Netbooks are here to stay no matter what Apple says or does.

Comments welcome.

Netbook sales to soar to 22 million

Macbook sale pricing

  • Jeff

    Apple does have a netbook.

    It costs 300 dollars and comes with a 2 year commitment.

    If you think about it, I can blog, tweet, browse the web, check my e-mail, make phone calls, get turn by turn directions, take voice notes, take pictures and even play video games on a device that fits in my pocket.

    Sure its a small screen, but 10 inches doesn’t format well for most web pages and we are left to scrolling anyway. Dynamic zoom is amazing.

    I would have to say they don’t want to make a netbook because they would rather sell their phony or an iMac. Plus the whole iLife suite wouldn’t work off a netbook, so they can’t charge as much for OSX, and apple hasn’t been one to skimp on cost. Their units cost more then any comparable laptop even after you purchase pro software for the windows PC.

    And linux can do that the iLife suite can do free. Sure its not as easy, but its free. That’s what I think is holding mac back.

  • http://batinfested.com Pipistrello

    As a die hard apple user I’ve been impressed by what those little $300 dynamos can put out. As a YouTuber, I’m not as impressed with their video abilities, but it’s good for the money. I’m not going to run out and get one though. My Macbook pro suits me just fine. I CAN see, however why people are flocking to them. It’s not a bad deal for the person who jumps from network to network.

  • http://uber.la John McElhenney

    “Do you really want a smaller, crappier notebook?”

    ZDNet’s Netbook Criteria
    1. Operating system
    2. Screen size
    3. Battery life
    4. Keyboard and pointer keys
    5. Storage
    6. Optical drive
    7. Weight
    8. Expansion
    9. CPU
    10. Integrated wireless capabilities

    Your remarks about Apple are interesting but misguided:

    “Apple had a brief, but short lived, surge during the time that Vista was being dragged through the mud. Those Apple vs PC commercials were effective and Apple did have a spurt of growth. But sustained growth requires more than just bad mouthing your competitors.”

    UH, which computing universe were you playing in for the last 5 years? XP is the last stable OS from MS. And that’s why they are including a Virtual XP Engine in Windows 7. So, in case, it sucks too, at least you should be able to run all you have under Virtual XP. Yeah, that’s a good option. But heck, maybe Windows 7 will be REALLY GOOD.

    And this:
    “It also requires more than just blowing off your competition as producing junk.”

    Other than the I’m a Mac commercials, Apple mentions the competition very little. In phones and mp3 players there is very little competition.

    And your final nugget of wisdom:

    “Netbooks are popular because they do work and they are very cost effective. They are not meant to be a total laptop replacement, but IMHO, more of a supplement. Though some are using the netbook for day to day work.”

    Very cost effective is a matter of your perspective. As “net” books begin to push into $500 – 600 range they are in the same price as full NOTEbooks. And then as a supplement, what does that mean? Are you proposing carrying a NetBook sometimes and a NoteBook sometimes and a Phone all the time? And your synchronization issues are: a. better or b. worse?

    The Dell Mini-9 is cool, small and inexpensive. And best of all it is easy to load Mac OS X on it. Making it the perfect Mac Netbook.

    And then there’s the whole iPhone-as-netbook discussion that we don’t have to go into here. But Apple IS WORKING ON SOMETHING iPhone + 9.4″-screen-ish. Call it the iTablet, iNote, or UberiPhone, it’s going to be a category killer.

    Here’s my take on the lack of Dell in the recent netbook reviews I’ve seen: http://bit.ly/dell-netbook

    Cheers,
    @jmacofearth

  • Bob D

    As usual in netbook discussions, almost everything anybody says is wrong. Apple ABSOLUTELY will be entering the market – no screen between the iPhone size and 13″ is absurd, and their comments – “we have some interesting ideas in this space” all but confirm it.

    Netbooks are really useful, by no means limited to running email and the web. They can run word processing, spreadsheets, play back music and video, in short, do everything that most normal people use a computer for. They are about as powerful as two year old laptops, and everyone considered THOSE as general purpose devices.

    An iPhone is in no way an adequate substitute for a netbook, Even the email (try typing on on of those “cramped keyboards, Tim Cook?) and web browsing (no Flash) are not as good. I own a Macbook and an iPod Touch and would buy an Apple netbook in a second, and yes, there is a market, almost every Mac podcaster I listen to has a netbook hacked to run OS X (so do I, and it runs quite well on that class of machine).

    Lastly, market share doesn’t matter nearly as much as profitability. If Apple put out a $300 netbook (no chance) they would gain a lot of market share, and become a less profitable company. That would be foolish, but I expect something in the $500-600 range.

  • Ryan Farmer

    Translation:

    Linux is free, the hardware is inexpensive.

    Microsoft Windows is also free because they have to dump to compete.

    Why would we (Apple) want to get into a market where the hardware margin is razor thin and there is no profit for the operating system software?

    ——————-

    I agree that from Apple’s business, which is selling high quality software on high end systems, it would be pointless to join Microsoft Windows XP and hardware assembled by some far east no-name on a race to the bottom.

  • Ryan Farmer

    Additional: I think the netbook will be fairly short lived.

    The main drain on laptop batteries are the hard drive (Which will be replaced by Solid State Drives in the coming years), the CPU and video chipset (Which AMD has already combined onto one unit), and the LCD screen (which adaptive display brightness as getting better for).

    Eventually you’ll have real laptops that get 5 hours on one charge.

    The problem with this is that Windows isn’t real great with battery life, and drivers have a big role to play in that as well.

    If you use the upcoming Fedora 11 with say the native AMD Radeon drivers, I think you’ll be pleasantly surprised, as they have been trying to squeeze out every last watt.

    I’m seeing about an hour and a half with Vista, and just over 2 hours with Fedora 11 Beta.

  • http://www.twitter.com/livia_lee Livia

    I would rather have an iPhone instead of Netbook.

  • Jeff

    a lot of mac fanboi in here.

    To say windows vista in unstable speaks you the lack of knowledge you have for its platform.

  • http://jeremytanner.com Jeremy Tanner

    I wrote a post today about OS X on the Dell Mini 9… the part pertinent here; Apple may make something smaller than a MacBook Air, but it’s going to cost a lot more than $300.

    http://jeremytanner.com/five-weeks-with-dell-mini-9/

    Jeremy

  • http://wp3.lockergnome.com/nexus/blade/ Ron Schenone

    Thanks for the comments everyone.

    Jeremy – interesting. Thanks for the link.

  • Ryan Farmer

    @Jeff: Vista is like the Hummer H2 of operating systems, it may be amusing to drive, but it’s not real efficient. It’s way too top heavy to be used on a netbook, and Windows 7 isn’t looking to buck that trend either.

    Also, with two service packs behind it, Vista is now something I feel comfortable to be booted into for extended periods of time, but pre-SP2 I experienced weird application failures, and troubles getting it to want to shut down and reboot.

    I suppose you could theoretically make the case that 512 megs of RAM and a 1 Ghz CPU are just barely good enough for Vista Basic, but I doubt even you yourself would want to run it like that, much less on an 8 gig SSD (Which it wouldn’t even fit on.) (I’ve tried it on twice those specs from an Express Upgrade disc and was horrified at how slow it was)

    Basically Microsoft can never declare XP obsolete if they want to sell operating systems for devices, unless they want to admit that Vista7 was a bad joke and unveil what they’ve really been working on.

    I could really sooner accept that Apple had an OS that was at least capable of some kind of user experience on said hardware. (And Linux can scale to run on anything, even my router with 16 megs of RAM and a 200 Mhz CPU)

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  • Jeff

    I agree with you Ryan. Vista is far to large to run on anything small. I have taken 7 for a test drive. W7Ultimate runs great on my laptop – laptop is a Intel Centrino Duo 1.7 with 1gig of ram. it uses about 1/3 of the 1 gig of ram to keep running. I have heard reports of people using a P4 to run 7 efficiently, so I would venture to say that W7 starter would be great on a netbook. If you disable some Aero effects it uses around 200-250 megs of ram. that leaves you 3/4 of the memory to browse the web, check e-mail and write documents.

    Mac OSX has proven to be light weight enough – the dell mini-9 runs it great as a hackintosh. Linux, well if you use the right builds, has even been installed on a potato. =D

  • davesmall

    Mercedes Benz is in the automobile business. They offer a wide range of automobiles in terms of capability and price.

    Why don’t you write an article like this one chastising Mercedes Benz for losing unit sales to KIA on the extreme low end.

    A smart and well run company first decides what business they want to be in and then they tailor their offerings to that market. McDonalds, Burger King, Ruth’s Chris, PJ Chang, and Wiendy’s all know what their market is and they stick to their respective segments. We don’t see McDonalds adding Chinese food items to their menu.

    The same is true for wristwatch manufacturers. Why not write a blog article lambasting Rolex for losing unit sales to Timex?