Apple is likely to launch a tablet that's similar to the iPod Touch, but larger, in the first half of 2010, marking the company's entry into the netbook race, Piper Jaffray analyst Gene Munster says.
In a research note Thursday, Munster handicaps the gaps in Apple's product
lineup. The gaping hole: there's nothing between the iPod Touch
and the MacBook. Enter this iPod Touch on steroids for US$500 to US$700.
Apple Chief Operating Officer Tim Cook called Netbooks
junky, but he never dismissed the consumer demand for them.
Between indications from our component contacts in Asia, recent
patents relating to multi-touch sensitivity for more complex computing devices,
comments from Tim Cook on the April 22nd conference call, and
Apple's acquisition of P.A. Semi along with other recent chip-related hires, it is increasingly clear that Apple is investing more in its mobile computing franchise.
Specifically, we expect this to result in a larger (7-inch - 10-inch)
touchscreen tablet that will launch in 1H CY10. Additionally, Apple's consistent
message that it refuses to launch a "cheap" portable netbook, and its desire to
differentiate itself in a maturing market before it's too late (similar to the
timing of iPod and iPhone), plus its gradual addition of multi-touch
technology to all of its core products (iPhones, iPods and Macs) leads us to
conclude this product will be a touchscreen tablet (not a netbook).
Apple's game plan will revolve around its multitouch patents to cook up
something different from your generic netbook. Munster's theory makes a lot of
sense. A netbook would tarnish the Mac's average selling price and potentially cheapen the
Apple brand. A tablet wouldn't. Double bonus: a Mac tablet would
compete with Amazon.com's Kindle e-book reader.
What's the OS look
like? Munster has an answer for that too:
We are anticipating a new category of Apple products with an
operating system more robust than the iPhone's but optimized for multi-touch,
unlike Mac OS X. The device's OS could bear a close resemblance to Apple's
mobile OS and run App Store apps, or it could be a modified version of Mac OS X.
We expect the development of such an OS to be underway currently, but its
complexity, along with our conversations with a key company in the mobile space,
leads us to believe it will not launch until CY10.
Is Apple too late to the game? Not really. Apple was late with the iPod, and
we saw how that turned out. Ditto for the iPhone, which came five years after
the first BlackBerry. Relatively speaking, Apple's Netbook killer would be a fast follow.
Here's a closer look at Munster's argument for a Mac tablet and not a
Why Not A Netbook?
• A low-cost netbook would serve to cheapen the Mac brand and lowers Mac
ASPs (average selling price).
• A netbook with OS X on it would cannibalize MacBook sales, offering a
new portable with OS X for a lower entry price. Apple could curb this effect by
offering a slimmed down version of OS X without the iLife suite pre-installed,
but we see this as unlikely, as its fully-featured approach, particularly with
iLife and digital media, is a core selling point for the Mac brand.
• Perhaps most importantly, a netbook would not differentiate Apple's
product from other netbooks entering the market, and as we have seen with the
iPod and the iPhone, Apple prefers to enter a market once they can offer a
significantly differentiated and often premium version of the product.
Why A Tablet?
• Component contacts in Asia suggesting there are no prototypes, but
discussions about required components are underway.
• Recent patents relating to multi-touch sensitivity for more complex
• Apple's acquisition of P.A. Semi along with other recent chip-related
hires leads us to believe that Apple is investigating making its own chip for
non-Mac mobile devices. We presuppose that Apple is content with its
relationship with Intel, and decision to move the Mac platform to Intel based
processors. We think the recent activity related to chips has more to do with
development of a mobile device.
• Comments from Tim Cook on the April 22nd Conference Call. See quote
"Well, you know, for us, it is about doing great products. And when I look at
what is being sold in the netbook space today, I see cramped keyboards, terrible
software, junky hardware. Very small screens. And just not a consumer
experience, and not something that we would put the Mac brand on, quite frankly.
And so, it is not a space as it exists today, that we're interested in. Nor do
we believe that customers in the long-term would be interested in. It is a
segment we would choose not to play in.
"That said, we do look at the space and are interested to see how customers
respond to it. People that want a small computer, so to speak, that does
browsing and e-mail might want to buy an iPod Touch or they might want to buy an
iPhone. So, we have other products to accomplish some of what people are buying
netbooks for. So, in that particular way, we play on an indirect basis. Then, of
course, if we find a way where we can deliver an innovative product that really
makes a contribution, then we'll do that. We have some interesting ideas in the
This article was first published as a blog post on ZDNet.com.