Apple has presented its financial earnings for the 4th quarter of the 2008 fiscal year yesterday. Despite an across-the-board slump in growth, spectacular iPhone sales more than made up for the lost growth, beating the ten million iPhones claim. You can read all about it at Ars. What’s more interesting were a number of remarks from Jobs regarding netbooks and cheap computers.
On whether or not Apple will introduce a cheap computer, Jobs was clear.
There are some customers which we chose not to serve. We don’t know how to make a $500 computer that’s not a piece of junk, and our DNA will not let us ship that. But we can continue to deliver greater and greater value to those customers that we choose to serve. And there’s a lot of them. We’ve seen great success by focusing on certain segments of the market and not trying to be everything to everybody. So I think you can expect us to stick with that winning strategy and continue to try to add more and more value to those products in those customer bases we choose to serve.
I don’t think this has much to do with being unable to make a cheap, quality computer, but more with not being willing to. Such a cheap Mac would cannibalise sales of the current, pricier Macs, which wouldn’t be good for the company. Of course, such a cheap Mac may have an additive value, but it would be a gamble. The basic premise here is that Apple is more interested in offering more for the same price, instead of offering the same for a lower price.
On netbooks, Jobs explained:
As we look at the netbook category, that’s a nascent category. As best as we can tell, there’s not a lot of them being sold. You know, one of our entrants into that category if you will is the iPhone, for browsing the Internet, and doing email and all the other things that a netbook lets you do. And being connected via the cellular network wherever you are, an iPhone is a pretty good solution for that, and it fits in your pocket.
Jobs is probably right on the netbook market being small, but claiming that the iPhone fits into the netbook category is – dare I say it – idiotic. A netbook is a full-fledged computer, with hyperthreading Atom processors running at 1.6Ghz, with dual-core Atoms on the way. They can also pack lots of RAM, and they’re capable of running even demanding operating systems like Vista (and some even install Mac OS X on these machines). On top of that, they have a lot of features that the iPhone doesn’t have. Flash, large screens, normal web browsers, copy and paste, oh, and a keyboard. Modern netbooks like the Acer Aspire One, MSI Wind, and the Dell Mini are pretty powerful and versatile machine, much more so than the iPhone.
As for cellular connectivity – some netbooks come with 3G built-in, and at least here in The Netherlands, all mobile operators offer unlimited 3G sim-only data plans for as low as EUR 19.95 a month, with a free 3G USB modem (EUR 9.95 for limited data plans).
I am a bit of a netbook fanboy though (I wouldn’t trade in my Aspire One for 10 iPhones), so take my opinion on this one with a grain of salt (if you weren’t already doing that anyway, that is).
Jobs did leave the door open, though, for a future Apple nebook. “But we’ll wait and see how that nascent category evolves, and we have got some pretty interesting ideas if it does evolve.”
I agree with Steve on this one; it’s about value over pricing. I would rather pay a bit more for something that gets me more value.
What I was concerned about was whether his comments were referring to the Mac Mini or not; there’s been rumor floating around again that the Mini will be killed off. Steve made an earlier comment about being very satisfied with the current line of Macs they have at the moment, so I’m a bit more confident the Mini will continue to be around.
I don’t consider the Mac Mini to be a “cheap” computer; I consider it a bargain for the value it gives me.
As for netbooks, I think he’s right as well. Its a new market, and we haven’t seen enough of them sold to determine if Apple should put something into that category or not. The netbooks seem to be emphasizing price over quality, and basic function over features.
That’s not what Apple is about.
Edited 2008-10-22 23:11 UTC