Up next for Apple: An ultrathin, ultralight $600 multitouch Mac netbook?

Started by dhilipkumar, Dec 17, 2008, 09:51 PM

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Chicago (IL) - Also known as "sub-notebooks" or "mini-laptops", the Intel-coined term "netbook" is now predominantly used to refer to low-power, low-priced, lightweight laptops that seem to be all the rage this year. Most of them are smaller than a paperback book and thinner than some print magazines, but they are terrible gaming, video editing and overall multimedia systems. But if you spend a lot of time on the Internet, a netbook may be your next computer: You get truly portable form-factor, often a decent battery and enough oomph to handle web surfing, email, IM/VoIP/videoconferencing, document editing and managing photos and music. Analysts believe that 2009 will be the year of netbooks and some predict Apple will redefine the category with a $600 Mac netbook.

Although netbooks are still a category that is still looking for direction, a spreading recession and shrinking consumer budgets might push them into mainstream next year. According to Gartner, netbooks made up nearly 5% of domestic mobile PC sales in Q2, up from less than 2% a year before. Most are built around Intel's Atom or VIA's C7 processors and typically come with 1 GB of RAM and a few GBs of NAND, a 120 GB or 160 GB HDD, a webcam, and weigh between 1.5 and 2.2 lbs. Vendors are now moving towards 10.2" screen sizes with 1024 pixels of horizontal resolution that lets you view web pages without having to scroll left or right.

The primary selling point of netbooks is a sub-$500 price. For instance, Acer's 8.9" LED-backlit Aspire One comes with a 1.6 GHz Intel Atom CPU and a 120 GB HDD for $350. This makes a netbook most likely a third computer purchase for some, on top of a desktop and a notebook. But it may be the only choice for those looking for a bargain system (even if those computers actually have higher profit margins than entry-level notebooks.)

Despite Steve Jobs' claim that Apple doesn't know how to make a "$500 piece of junk," Technology Business Research analyst Ezra Gottheil has a different thought. "Apple is facing the possibility that as the economic news gets worse, that they're increasingly pricing themselves out of an important market," he said, adding that "economic conditions are accelerating this." Indeed, a netbook is the missing product in Apple's portable lineup that now accounts to well over half of all Macs sold.

Gottheil predicts that Apple will enter netbook market within six months with a $599 product. The analyst warned it could cannibalize MacBook sales and hit Apple's hefty margins, but added that Mac netbook would boost Apple's market share significantly. Industry watchers say Apple typically enters an established market if it can innovate, adding that netbooks are ready for an Apple touch. Gottheil believes Apple will redefine netbooks on lightness and thinness, predicting a "paper-sized" device with "more screen than most netbooks," and possibly NAND memory instead of a hard drive.

The analyst refrained from speculating which processor and graphics Apple might use. If you ask us, there are three possible scenarios. The first with Nvidia graphics shouldn't come as a surprise: The two companies are more than buddies lately as Apple ditched Intel's integrated graphics in favor of Nvidia GPUs in its unibody Macbooks. Nvidia currently lacks a GPU for netbooks but the company's chief financial officer Marv Burkett noted the Credit Suisse annual tech conference in Scottsdale that it is closely watching the netbook market. "We're not saying we're not interested," he said. "It is a matter of how the market will evolve."

In fact, Nvidia has already made a move, having secured a deal earlier this year with Via Technologies to make GPUs that will work with Via's upcoming Nano processors for next-gen netbooks. Nvidia's vice president of investor relations Michael Hara said the upcoming GPU will up netbook specs to enable games and video playback that are out of reach of today's netbooks. If Apple opts for this GPU, it would limit the choice to a VIA Nano processor. However, Apple could convince Nvidia to tailor the GPU for   Intel's Atom platform, but we find that rather unlikely as Apple would want Intel's Silverthorne core, which is sold in a package with an integrated graphics chip.

The second option is next-gen 45nm or 32nm Atom processor code-named Pineview. Basically, a system-on-a-chip (SoC) with an integrated graphics core, single-channel DDR2 memory controller and Hyperthreading technology, the single- or dual-core Pineview is set to take netbooks to the next level. The problem is, it is slated for the second half of 2009 and that may be a bit late for Apple.

The third option is Apple's own SoC route. Jobs publicly confirmed Apple acquired P.A. Semi and its engineering talent to design its own SoCs for next-gen iPhones, iPods and "other products". The iPhone SoC under development will allegedly combine ARM processor design and Imagination's next-generation PowerVR SGX/VXD cores and will be manufactured by Samsung who already makes the SoC for current-gen iPhones. If Apple is already developing a SoC for the next iPhone, there is a chance it will build another one to be used in a Mac netbook as well. The SoC route could reduce costs compared to shopping off-the-shelf components separately and differentiate Apple on a hardware level.

If a Mac netbook is aimed to redefine the whole category, it should not only be ultrathin and ultralight, but also have eye-popping visuals and processing power unmatched by today's netbooks. To speculate further, a virtual instead of a physical keyboard and a multitouch display are also highly probable. If done right, such a gadget can push the young netbook category to mainstream and differentiate Apple from its rivals.

It is indicative that Jobs didn't totally rebuff the possibility of a Mac netbook when confronted with such a question from an investor during the most recent earnings call. "We'll wait and see how that nascent category evolves," Jobs replied. "And we've got some pretty interesting ideas if it does evolve." If a Mac netbook is in fact set to arrive within six months, it will be introduced at either Macworld Expo in January or Apple's developer conference in July.

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