Why Apple Won’t Make a Netbook

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Every PC maker on the planet loves netbooks because they're the fastest-growing segment (and the only growing segment) of the PC market. They all love netbooks--except Apple, that is. Here's why.

Rumors have been circulating for a very long time that Apple has been working on a netbook. Mac fans had hoped that one was going to be introduced at the recent Macworld show. Fans were disappointed when no netbook was announced. And at the Apple quarterly earnings call yesterday, Tim Cook, Apple's chief operating officer, made clear that no netbook will be forthcoming soon--if ever.

According to Wired, during that call Cook told analysts, "We've got some ideas, but right now we think the products there are inferior and will not provide the experience to customers that they're happy with."

According to Wired: Cook added that netbooks are "principally based on hardware," and throughout the call he repeatedly stressed that Apple believes "software is the key ingredient."

That last statement may appear baffling at first, so you need to do a bit of translation to really understand what Cook is saying. It's this: There's not enough profit margin in netbooks for Apple to enter the market right now.

Clearly, Apple could easily get Mac OS X or a version of it to run on a netbook. But Apple always charges a premium for its hardware, and in the cutthroat netbook market right now, there's no room for charging a premium. Apple won't make any money by selling netbooks at $400. That's why Apple disdains netbooks.

But that disdain spells trouble for Apple. Some analysts believe that netbooks will outsell laptops at some point. And with a faltering economy, people are leery of paying a premium for any product, even one as well designed as Apple hardware. In ignoring netbooks, Apple may ultimately be harming its bottom line.

This story, "Why Apple Won’t Make a Netbook" was originally published by Computerworld.

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