Apple Preps Low-Cost Netbook: Analyst - TheStreet

Apple Preps Low-Cost Netbook: Analyst

The tech giant could be planning its own $599 take on the netbook.
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is preparing to launch a low-cost netbook-style computer that will provide users with Web access and email, according to a report from analyst firm Technology Business Research, a move that if confirmed could signal a subtle shift in the company's laptop pricing strategy.

The technology giant has not yet responded to a request from

for comment, although TBR believes the mini-laptop will debut at MacWorld next month and become available in mid-2009. According to TBR, the computer will come in two sizes, one like the MacBook Air and another similar to a netbook, with the smaller offering priced at $599.

Apple, which typically keeps

tight control

of its pricing, has traditionally avoided the low-end of the notebook market. Instead, the company has constantly reiterated its focus on features rather than



A low-cost, stripped-down netbook, however, could open the door to new revenue streams at a time when consumers are feeling the effects of the economic crisis. Crucially, Steve Jobs could also maintain pricing levels for the more expensive and feature-rich MacBook family.

"It will open up new markets, including emerging economies, price-sensitive consumers, and those for whom all PCs, including Macs, are too complicated," wrote TBR analyst Ezra Gottheil in a research note released Tuesday.

The analyst says that users should not see the launch as a cheaper Mac option, explaining that, from a systems perspective, it actually has much more in common with Apple's smartphones.

Similar to the iPhone, the netbook's applications will be delivered through the iTunes App Store, wrote Gottheil, adding that this will make it easier for Apple to sell additional applications.

Apple's iTunes business represents one of the company's most solid revenue streams, even in a weakening economy. At the end of the company's fourth quarter, for example, Apple had more than 65 million iTunes customer accounts.

The Cupertino, Calif.-based company, which faces stiff competition from


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in netbooks, will also use the App Store to provide backup services, according to TBR.

"With an optional online backup service, the entire device can be restored," wrote Gottheil. "Under a more expensive support plan, Apple will be able to send the customer a replacement functional device if theirs is stolen or physically damaged."

Apple's rumored new product may sound like a cross between a notebook and the iPhone, although it is unlikely that the firm will launch something in the image of its Newton offering, a touch-screen PDA that was discontinued in the late 1990s.

This is, however, not the first time that rumors of a low-cost Apple gear have surfaced. There have been rumblings, for example, of a $99 iPhone, possibly sold via


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, although this price point may be

wide of the mark


Apple is wrestling with slowing Mac sales, according to a


report that cited figures from

research firm NPD Group


The firm's Mac sales were flat in November, according to NPD, although Apple's notebook sales were up 22%, highlighting their


to the company at a time of tightening tech budgets.

Apple shares slipped 15 cents, or 0.2%, to $94.60 Tuesday.