Apple will unveil netbooks next month, says analyst

Tough economic times demand a lower-priced system, but Apple won't want to cannibalize MacBook sales

Apple will introduce two netbooks at the MacWorld Conference and Expo next month that will be tied to the company's App Store, as is its iPhone, an analyst said Tuesday.

"I don't have any inside information," said Ezra Gottheil of Technology Business Research Inc., as he spelled out his take on Apple's next hardware move. "This is just by triangulation."

Citing evidence that included the gloomy economy, climbing sales of the least-expensive laptops, and comments CEO Steve Jobs made in October, Gottheil said Apple would show a pair of netbooks at January's conference, then as it did two years before with the iPhone, put it on the market mid-year.

"They like to have a big surprise at MacWorld," Gottheil said. "They don't need to have one, but they like to."

But Gottheil had more than just Apple's habit of springing surprises in mind. "It looks like netbooks are real, and getting a certain amount of traction. And this recession looks serious."

In a research note three weeks ago, Gottheil concluded that Apple would enter the netbook market sometime in the first six months of 2009, in large part because of slowing consumer spending. Unlike other computer makers, Apple has avoided the bottom of the market, leaving it vulnerable as US$300-$400 netbook sales have surged. The problem with producing a netbook, Gottheil said then, was that if it was simply a stripped-down MacBook, Apple ran the risk of cannibalizing sales of its higher-priced, and higher-margin, notebooks.

Apple, in effect, needs something completely different, Gottheil said.

That's why he believes Apple will introduce netbooks next year that, like the company's iPhone, will exist in an Apple-controlled "closed system" where software is delivered via the App Store, device restore is done from iTunes, backup is available through an optional online service, most likely MobileMe, and peripheral and add-on choices will be limited.

The App Store will be one of the keys, Gottheil said. "By controlling the software that can be loaded and the hardware that can be attached, Apple's device will be simpler, easier to use and more reliable than a PC, and will excel at the functions most required by users," he said.

With the infrastructure and connections Apple already has, it can redefine the netbook category. "The issue here is making it dirt-simple for the user," he said. "Macs have a good deal less hassle than PCs, but they don't have zero hassle. To some people, they are intrinsically intimidating."

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