Apple Is Throwing Away The Netbook Opportunity, Say Analysts

Apple is lagging behind HP, Dell and Acer because it doesn’t have what users want at the moment – a cheap netbook, reports say.

Even though smaller, less expensive notebooks are more attractive to consumers in a recession, Apple has repeatedly stated it has no interest in the netbook market – and now reports from research firms Gartner and IDC show that Apple is losing out.

Apple, whose products are synonymous with style and substance at a price, is lagging behind its less sophisticated, but cheaper, competitors Hewlett-Packard (HP), Dell and Toshiba. IDC says Apple will take fifth place in unit shipments in the US market in the second quarter of this year, with 1.21 million units sold, behind Dell, HP, Acer and Toshiba.

Gartner puts Apple in fourth place with 1.4 million units, beating Toshiba on 1.1 million units shipped. When actual revenue, not units, is considered, IDC puts Apple fifth place in US market share, with 7.6 percent (down from last year’s figure of 8.5 percent), placing the company behind Dell, HP, Acer and Toshiba again. Gartner, conversely, gives 8.7 percent of the U.S. market share to Apple and 6.8 percent to Toshiba.

One reason Apple may be struggling to gain market share while competitors like Acer and Toshiba (who showed double-digit gains in market share) is Apple’s lack of an inexpensive netbook offering, which the company has repeatedly claimed it has no interest in producing. In April, Apple CFO Tim Cook told financial analysts during a conference call that a netbook is “not a segment we would choose to play in”.

The company is instead rumoured to have a tablet on the way, despite earlier repeated reports that there was one on the way, possibly under Steve Jobs’s direction.

In the first quarter of this year, Gartner’s PC shipment data showed the negative effects of mini-notebooks on the larger PC market. Worldwide, PC manufacturers shipped 67.2 million units, for a 6.5 percent year-over year decline.

However, even without netbooks, Apple margins actually increased during the first calendar quarter, which is the company’s fiscal second.
Mac shipments were actually surprisingly strong during the first calendar quarter—2.2 million units—considering how much netbooks buoyed Windows PC unit shipments, while sapping margins.

Mac shipments into the channel declined 3 percent year over year, but sales out to customers were flat sequentially. First to second quarter, Mac notebook units fell 22 percent and 25 percent by revenue. Cook at the time called Mac sales “a solid performance, particularly in this [economic] environment.”

However, an IDC analyst pointed out Apple may want to think twice about staying out of the netbook market — which has grown quickly as a down economy makes the prospect of a cheaper PC more appealing. “People are focused on $600, $700 notebooks,” IDC analyst Bob O’Donnell told The Associated Press. “Guess what Apple doesn’t have: any notebook below $999.”