Inspired by some rumors coming
out of China, ARS Technica just delivered a pretty good list of the reasons Apple (AAPL) should and should not enter the booming netbook business. Here’s their conclusion:
“There are many reasons for Apple to release a netbook-like device, and reasons for it not to. Even though the company continues to beat the drum against sub-$500 devices, however, it's clear that Apple is at least entertaining ideas in this space. We're just not convinced any Apple netbook prototypes will ever emerge from Cupertino.”
As for prototypes of netbooks, they almost certainly exist within Apple. The company spent over $1.1 billion on R&D last year, and with that kind of money, they’re likely churning out prototypes of all kinds of stuff. You know, coffee makers, scooters, and blanket/robe hybrids.
But on the case of an actual netbook being released on the market, I have to agree with ARS’ point that “the iPhone and iPod touch may already fill the space that would be occupied by an Apple netbook.”
The only way Apple will move down-market into the lower margin world of netbooks is if it sees a serious slowdown in sales volume and it sees no other choice. The iPhone is a superior product to sell because of the huge subsidies paid by the phone carriers. It would be insane for Apple simply to cannibalize that business, or even its own MacBook business, with a lower-margin product.
If they ever do make that move, sell your house and buy put options on the stock.
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