Comment by catone | Hacker News Reader

Comment by catone | Hacker News Reader

That logic doesn't seem very, er, logical to me.

The post is basically a bunch of quotes about Apple a netbooks. Some saying they should have one because an Apple netbook would be cool (it probably would be), some saying not having a netbook is hurting Apple (they seem to be doing just fine), some making shoddy predictions about slumping sales, and some saying Apple is a missing an opportunity (maybe they are).

And Gruber's conclusion appears to be that had Apple had a netbook they'd be losing money. How does one reach that conclusion? Presumably, he means that netbook sales would cannibalize high end laptop sales. But that's doubtful. Most people who buy a netbook either have a high end laptop as well (like me -- I have a Macbook, a Sony VAIO, and an Asus EeePC) or were never going to buy a high end laptop in the first place.

So... you can debate the merits or necessity of Apple adding a netbook all you want, but claiming that adding a netbook would have caused Apple to _lose_ money is just silly.

That said, Gruber appears to be a Yankees fan, so he can't be all bad...

No, the claim is that a bunch of "analysts" who said Apple was doomed, DOOMED, if they didn't make a netbook ASAP were proven wrong, and quite dramatically.

Indeed, remember when Michael Dell famously said Apple should just give up on the hardware business, a few years ago? Well, Apple now has enough cash on hand to buy Dell flat out. That’s a pretty impressive turnaround in about a decade.

Presumably, he means that netbook sales would cannibalize high end laptop sales

But isn't that exactly what's happening to all the PC manufacturers? Netbooks are growing at a stunning clip -- but when you subtract them from laptop sales, it looks an awful lot like their growth is coming at the direct expense of conventional laptop sales.

It's not so silly.

Netbooks account for a little over 20% of all PC sales now. The PC industry has not grown 20% over the same time period. Either netbooks are cannibalizing higher end/margin sales or they are masking what would have been a huge drop in PC sales over the last 2-3 years.

I think one of the biggest problems with trying to makeup margins with higher volume is that support costs don't scale that well. It costs the OEM basically the same amount of money to offer telephone support and warranty service to a $400 machine as it does a $2k machine. So they make less money per machine and, because they sell more machines, it costs more to support them.

Presumably, he means that netbook sales would cannibalize high end laptop sales. But that's doubtful.

In order to compete with other netbooks, a hypothetical Apple netbook would necessarily be the least expensive Mac. This would definitely cannibalize their sale of better models to first-time customers, who currently constitute a significant portion of Apple's Mac sales (as much as 50% from their retail stores).

It comes down to a question which set of customers is going to be more profitable: customers looking for "a cheap laptop" or customers looking for "an Apple computer". All else being equal, I think it's obvious that the latter is more desirable. The mistake that many in the press have made is assuming that these customers are in short supply and that Apple will begin struggling to find them Real Soon Now, but this hasn't turned out to be the case. There may be more of the former kind, but would Apple really be able to capture two, three, four times as many of them as they are their current customers?

Reply on news.ycombinator.com