Will Apple manufacture a low-cost netbook? If you believe Steve Jobs, not anytime soon.
During the conference call announcing Apple's blowout quarter, Wall Street analysts received a special surprise: the opportunity to ask questions of Steve Jobs, Apple's chief executive.
Normally, Apple's earnings conference calls are run by Peter Oppenheimer, Apple's chief financial officer. Jobs usually appears only at product launches, developer conferences, and other special events, where the press usually monopolizes his time. On Tuesday, therefore, analysts had the opportunity to ask the same questions journalists had asked a few days before at the launch of the new MacBooks.
For an analyst focused on the bottom line, whether or not Apple chooses to manufacture a netbook is a key question. Asus, among others, has made the category a priority. Apple, by contrast, has typically manufactured notebooks that use the same components as its Windows rivals, but has charged more. Does it offer commensurate value? Apple would argue that it does.
Jobs acknowledged that there are segments of the market that the company serves, and some it does not. Netbooks are apparently part of the latter. "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," Jobs said.
If true, that implies that Apple has not, or can not, hold down costs. Contrast that to Dell, which has made a business model out of streamlining its business model. But, with the profits, revenue, and margins that Apple pulled in, how can you argue?
But Jobs also implied that the so-called convergence between computers and communications devices had already occurred with the iPhone. Jobs also pointed out that with the Apps Store, the iPhone has easy access to a variety of software. Netbooks, he said, were a "nascent" category, and there were not a lot being sold.
"You know one of our entrants into that category, if you will, is the iPhone, for browsing the Internet and doing email doing all the things that a netbook lets you do. And can be connected via the celluar net wherever you are. The iPhone is a pretty good solution for that, and it fits in your pocket. But we'll wait and see how that nascent market evolves, and we have some pretty good ideas if it does."
Th quintenssial Jobs statement, then: insightful, controversial, tempting, and easily interpreted in a variety of ways. Will Apple make a netbook? The clear answer: not until it does.
Mixx It
Digg It
Stumble
More...
