Low-cost mini notebooks like the Asus Eee PC continue to win rave reviews. And now Fortune is praising a Hewlett-Packard mini-laptop that “packs a lot of punch.” You can almost see Steve Jobs writing on an white board somewhere at Apple, weighing the pros and cons of launching his own tiny notebook offensive.
But does Apple really need a super-small, low-end offering? The VAR Guy isn’t sure. Even so, Steve needs to watch the market closely. The reason: Apple doesn’t like surprises–especially in its core vertical markets.
Here’s the key problem: Fortune magazine, one of Steve’s regular reads, is praising HP’s mini laptop — which targets the education sector and starts at about $500. Moreover, l0w-end Linux-centric systems like the Asus Eee (the three E’s stand for Easy to work, Easy to learn, Easy to play) continue to attract low-end buyers.
So there’s Apple, celebrating the success of its high-priced, super-thin MacBook Air. But the price gap between Apple’s slim, slick laptop and HP’s sub-notebook is $1500 or more.
Will Steve blink? Will he give us a Mac Mini — but in a portable, low-cost format? The VAR Guy waits … and wonders.
Tags: Apple | ASUS Eee PC | HP Sub-notebook | MacBook Air
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There’s little and then there’s cheap. Are people buying the Asus because it’s little or because it’s cheap? If it’s because it’s little, then why aren’t UMPCs selling better? So, it must be because it’s cheap. Will Apple sell a laptop at $500? I doubt it. If you fit the guts of a Mac Mini in a laptop formfactor you get a Macbook. At the refurb store, you can buy a Macbook for $800. That’s as cheap as it gets for Apple. People should buy those in droves.
Unless these “super-small, low-end offering[s]” enable Apple to maintain its ~33% profit margins, why on Earth would Apple WANT to produce one? Reducing gross margin would hurt its stock price, and therefore be counterproductive.
HP’s operating margin is about 1/3 of Apple’s; Dell’s gross margin was ~19%. Which would you prefer?
Bob: Good points all around. I read today that iPhones will soon cost $199. Margin squeeze already starting???
I do wonder, however, if Apple can at least deliver a subnotebook with a 7 to 9 inch screen at a healthy margin. Is it worth it? I’m not sure. But if these HP devices take off in the education market, I’m sure Steve will have a response…
Tiny laptop? Add a keyboard to the iPod touch…
People are buying EeePCs because they’re cheap. Even so, I have to admit they seem rather compact and useful carry around. Their price continues to climb with each newer model. I don’t know what the longevity of the Asus computers are, but if they hold up for a year I think it would be worthwhile getting one.