Boiling frogs: How netbook deceit could help Apple

David Braue
6 April, 2009
View more articles fromthe author

ASUS may be rightly credited with creating the netbook revolution after its 7-inch Eee PC, with a diminutive price tag around the $500 mark, last year changed the way we think about computers. Yet as ASUS’ latest in a long line of Eee successors nears launch, many are starting to question just what the word ‘netbook’ means anymore. This, it turns out, may be very good for Apple.

Consider the new system, which in typical ASUS style is named with an obscure series of letters and numbers. Sure, the Eee PC 1004DN is a 10-inch netbook, but consider what it has inside and your eyebrows may start to rise. Well, mine did.

There’s Windows XP, 1GB of RAM, Bluetooth and 802.11n, and a 10-inch screen with 1024×600 resolution – a pared-down version of the higher-resolution screens on ‘proper’ laptops. Most startling, however, is the inclusion of a DVD drive, the very feature that most netbooks have sacrificed to deliver their lightweight design and relevant feature set. There’s also a fingerprint scanner, 130GB hard drive, and what Asus claims is a 92%-fullsized keyboard (I haven’t seen it but this sounds similar to the very comfortable keyboard in HP’s well-received albeit expensive netbooks).

Put it all together, and ASUS is selling a 1.45kg netbook that weighs and costs (at $1399) about the same as many conventional (read: having a larger screen) laptops.

Selling stripped-down laptops was always going to introduce the risk of cannibalising sales of larger systems. This distinction was theoretically going to be reflected in a line between netbook and laptop, one which in large measure relied on the exclusion of an optical drive from lower-priced netbooks.

Yet in the time since ASUS launched the original, an ongoing series of ever more powerful Eees has steadily boosted feature sets and raised prices to the point where, with the 1004DC, ASUS has just crossed that line. It is now selling a full-service laptop that has suborned the ‘netbook’ name to cash in on a trend, but in the context of proper laptops is in fact just a slower, underpowered system with compromised graphics and a slow hard drive.

For the money ASUS is charging, people wanting a real, lightweight, portable netbook can get better value in many other places. Consumers understood the compromises that came with a $500 computer, but once you get well into four-figure prices, they will expect more – and find netbooks like this sorely lacking.

Mac fans, keep reading. If you’re wondering why I’m devoting this many column-centimetres to a Windows netbook, don’t give up yet. Here’s my point.

It was no surprise that netbook vendors, seeing the arguable appeal of these 10-inch notebooks, would try to inch prices upward by adding in new features. ASUS’ competitors were initially guiltiest of it, but ASUS of course had to keep up. And suddenly, like the proverbial frog in boiling water, we have come to the point where a premium netbook costs well over $1000.

This, from a product category that was known for its ability to sell minute computers at retail-store prices, was never supposed to happen. This kind of upwards creep may have served to expand customers’ expectations, but it’s also eventually going to make consumers wake up and start asking when a netbook is no longer a netbook.

Yet while such questions may not help ASUS’ cause, it will do wonders for Apple, which has famously been sitting on the netbook sidelines despite the insistence of fervent fans (myself included) who are considering jumping to a netbook.

Rumours suggest Apple has finalised a netbook design and will enter the market later this year, although it’s worth mentioning at this rate – as I warned earlier this year – any such move has come too late for Apple to cash in on major contracts such as the one recently awarded to Lenovo to supply 200,000 netbooks to NSW students.

Yet this low-priced game isn’t really where Apple wants to play; judging by history and executives’ comments, it would prefer to have a higher-priced netbook that, rather than being a stripped-down MacBook, offers some sort of differentiation. The touchscreens apparently bound for the netbook will provide that differentiation – and allow Apple to justify launching its netbook at a price more towards that of the ASUS 1004DC rather than the $499 Mac OS X-inspired netbook recently launched by Melbourne integrator Kogan.

This leads me back to comments by AMW editor Chris Oaten, who was recently cavorting with ‘the other side’ in hands-on evaluations of Sony’s TT, its stylised entry into the netbook space. Although Sony’s system includes a Blu-ray drive and is likely to ship with a pricetag that starts with 2, it shows how Sony is testing just how much netbook buyers will accept different combinations of small and powerful. Chris made the astute observation that “while everyone else is going for small and cheap, Sony goes for small and classy… it’s an example of Sony playing the game on their own terms”.

There we have it, then: the netbook was just a meme to get laptop makers busy with resetting consumer expectations and rebuilding their lineups from the ground up. Now, companies like ASUS and Sony are breaking from the pack – and the real race is beginning.

Apple has little interest in selling a $500 stripped-down MacBook, but now that its netbook-touting rivals have cleared the way, there is room for a smaller-screen product at around $999 that will be powerful enough to appeal, but limited enough not to cannibalise its MacBooks. Given the way the rest of the market has grown, it’s now the perfect time for Apple to get into the game; with consumer expectations reset accordingly, it can now get into the market while charging the price premium it’s used to.

Leave a Comment

Please keep your comments friendly on the topic.

Contact us