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Four Reasons There Won't Be an Apple Netbook

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If the Macbook isn't broken, why fix it?

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As usual, Apple (AAPL) largely brushed off questions about a netbook on its earnings conference call yesterday.

But is one actually on the way? The answer is no, and here's why.

1. There's a more obvious hole in the product line.

Apple still doesn't have a reasonably priced, entry-level notebook PC. Yes, Mac lovers -- I understand that lower price doesn't equal better value when you consider stability and security (and mental health, in my case), but come on. Macbooks are more expensive than they need to be. A $799 Macbook would give Apple a major additional catalyst for market-share gains, and given Apple's stinginess with hardware components, could still carry high gross margins.

2. Macbooks are still selling just fine.

As it turns out, those expensive Macbooks are actually doing just fine. Apple sold 1.75 million notebooks during the quarter, up 13% year-over-year. Excluding anti-depressants and Ramen noodles, selling 13% more of anything these days is pretty impressive. So there's no reason to take the chance of cannibalizing a premium-priced, high-margin product with a netbook just yet.

3. The netbook market is untested.

It's still hard to tell just how big the netbook market can be, and whether it can support a premium-priced product. So why throw money at it? It makes far more sense to just let Asus, Dell (DELL), and Hewlett-Packard (HPQ) gamble with netbooks and see what happens. Apple didn't rush into the smartphone market, and it won't rush into this one.

4. Mobile broadband needs to be cheaper.

The perfect way to introduce a netbook would be with a wireless carrier, including a plan for mobile broadband Internet access. This way, the carrier would eat some of the cost, keeping the price at a level both profitable for Apple and affordable for consumers. For now, $60 a month is too expensive for an audience that's probably already paying hefty mobile-phone bills.

Now, of course Apple is working on a netbook. It has a $1 billion-plus R&D. It's probably experimenting with just about anything and everything remotely related to computers. Maybe Apple's even trying to make a good mouse!

But back on topic: A netbook is totally unnecessary. Despite the recession, Apple's high-priced products are still taking market share. So why bother?
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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