Apple's new Macbooks: flop or fiasco?

Summary:The news that Apple has cut Macbook production by 20-30% may not be surprising given the world economy. But when HP reports that their Q3 notebook revenue grew 26% and Mac resellers are offering rebates on the new 'books things have gone very wrong in Cupertino.

The news that Apple has cut Macbook production by 20-30% may not be surprising given the world economy. But when HP reports that their Q3 notebook revenue grew 26% and Mac resellers are offering rebates on the new 'books things have gone very wrong in Cupertino.

Looking, but not buying When Apple's CFO commented in July that Apple's margins would drop due to a "product transition" speculation ran high -- and I gladly joined in -- that Apple was bringing some exciting but still costly technology to the new Mac box.

Blue ray? Nope. Wi-Max? Nope. Standard solid-state drives? Nope.

We did get some costlier, lower volume technology: LED backlighting; fancier graphics; and a touch sensitive trackpad. All good.

But we also got another costly addition that no one was asking for: the machined-from-a-single-block-of-aluminum unibody structure. When was the last time you picked up your notebook and thought "I wish it weren't so flimsy!"

Steve geeks out Steve Jobs is a design geek, which is usually a Good Thing. But he over reaches regularly and the results hurt.

The NeXTCube's magnesium case, while lightweight, was costly and added nothing to the computer's appeal - until you burn it. NeXT got out of the hardware business after selling only 50,000 systems.

The later Apple G4 Cube was a commercial flop as well despite achieving cult status and a showing at the Museum of Modern Art. The Cube cost more than the more expandable Power Mac G4 due to its low-volume design.

The iMac G4's innovative swing arm monitor mount looked very cool, but its cost, added to the digital LCD monitor's cost, made the product less competitive. After less than 3 years the design was replaced by the current iMac slab design that, with revisions, is over 5 years old.

Flop or fiasco? Steve's history of putting form before function - or price - comes at a particularly bad time. The worldwide economic crunch - heckuva job, Greenspan! - is moving everyone down market.

Netbooks are moving prices into iPod Touch territory. And with Moore's Law pushing performance up more people will buy them instead of standard notebooks.

But Apple's biggest problem is that it is building extra cost into a product category that is moving down in average selling price. Windows notebook prices have dropped 20% in the last 2 years - while Macbook prices have stayed steady.

With the crash in disk, DRAM and display costs the latest generation of MacBooks could have changed that. As Apple's largest selling product line their continued rapid growth would have overcome the revenue shrinkage of a lower price with higher volume. But that won't happen now.

The Storage Bits take Macs are good systems, but Apple's made mistakes before with design and pricing. The unibody design, like the iMac swing arm, will be a 1-generation aberration.

Great industrial design is more than ergonomics and esthetics. It also responds to market realities - in this case a crashing world economy and dropping sale prices - by careful attention to priorities.

By investing in a costly feature no one asked for Apple is stalling its rapid growth in notebook marketshare. Whether it is a flop or a fiasco depends on how bad and how long the global recession is.

Comments welcome, of course.

Topics: Apple, Hardware, Laptops, Mobility

About

Harris has been working with computers for over 35 years and selling and marketing data storage for over 30 in companies large and small. He introduced a couple of multi-billion dollar storage products (DLT, the first Fibre Channel array) to market, as well as a many smaller ones. Earlier he spent 10 years marketing servers and networks.... Full Bio

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