Apple Can Shave Hundreds Off a New MacBook

Is the country ready for a $100 laptop? RadioShack (NYSE: RSH  ) will begin selling the Acer Aspire One netbook for $99.99 at its stores on Sunday. The ultra-compact device comes with a 160-gigabyte hard drive, Windows XP, and a built-in webcam, but a meager one gigabyte of RAM. Still, at $100, it's a steal.

Is there a catch? You bet there is. Like wireless handsets and smartphones, the netbook is subsidized by a cell phone provider. Buyers will need to sign a two-year contract for AT&T's (NYSE: T  ) DataConnect mobile broadband service, where wireless plans start at a lofty $60 a month.

Add it up and it's clearly not a bargain. Even if the netbook is worth nearly $400 on its own, one would be paying at least a whopping $1,540 (before taxes, even) over the next two years. In other words, despite the tempting sticker appeal, it is not going to win over gift-giving penny-pinchers who bother to read the fine print.

This doesn't mean that the RadioShack deal is a bad one. If you are going to make the most of the netbook's 3G connectivity by paying up for an unlimited data plan through AT&T, Sprint Nextel (NYSE: S  ) , or Verizon (NYSE: VZ  ) -- keeping you online, long after you've left the Wi-Fi hot spot -- you will be saving hundreds of dollars on the device itself through this deal.

This leaves me thinking, of course. If someone is willing to sign up for a subsidized netbook with an archaic operating system and a flimsy gig of RAM, why wouldn't the same deal work on a sturdier portable that will still be relevant in two years, like a new MacBook?

Apple (Nasdaq: AAPL  ) is no stranger to AT&T subsidies. It makes far more than $199 on iPhone unit sales in this country because AT&T is sending roughly $375 more Apple's way in exchange for every two-year data plan commitment that is tethered to the smartphone purchase. Why can't it do the same for its MacBooks?

MacBooks start at $999 these days. How well would Apple fare marketing $600 or $700 MacBooks that are tied to data card contracts? It would certainly be one way to respond to the country's growing fascination with dirt-cheap netbooks at sub-$500 prices. It would also  reach a crowd that would be more likely to pay $60 a month for connectivity than someone looking at an entry-level netbook.

Apple can't sit quietly and let netbooks with Microsoft (Nasdaq: MSFT  ) and Linux operating systems swipe market share. It may be too late for this holiday season, but if Apple isn't readying an entry into the netbook market itself, it may as well take advantage of the same AT&T subsidies that shot iPhone sales to the next level this past summer.

Forget the fine print, Apple. The writing is on the wall.

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Longtime Fool contributor Rick Munarriz settled for a Dell laptop instead of a MacBook two months ago, based partly on price. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


Read/Post Comments (5) | Recommend This Article (16)

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  • Report this Comment On December 12, 2008, at 4:48 PM, Mormacs wrote:

    Like the iPod and the iPhone, Apple might not have been first on the market, but got in when the timing was right and with far better products.

    The result is obvious with the iPod and the iPhone is grabing market share.

    If there is such a market for netbook. Don't worry Apple will come up with something far better and will repeat what it did with the iPod. ...stay iTune! ;-)

  • Report this Comment On December 12, 2008, at 5:04 PM, jason867 wrote:

    Windows XP is far from "archaic". Most business still use xp because vista is way too buggy and incompatible. I have used both extensively and I have to say xp is far and away a better os.

    A gig of ram is more than plenty for most users out there. The only way you'd need more is for the latest high end games and other extremely resource intensive applications. All computers I've ever worked with (and that's several) use less than a gig.

    and 160gig of harddrive is plenty unless you store a crapload of music & video.

    This netbook isn't a bad deal at all, although it's not a good one unless you'll actually use the 3g alot. 3g isn't available in a lot of smaller cities though.

  • Report this Comment On December 12, 2008, at 5:08 PM, jason867 wrote:

    And another thing.

    Macbooks aren't all that they're cracked up to be.

    True macs tend to run smoother, but, a windows machine is typically a better value for the money, and provided you know a thing or two about computers, they can be kept efficient in their operation.

    Not to mention windows has a crapload more apps available to it compared to macs.

    the only reason to choose a mac product over something else, is for fashion reasons.

  • Report this Comment On December 12, 2008, at 5:15 PM, oobergeek wrote:

    Ummm...have you looked at the new MacBooks? They're all metal. Where exactly would Apple put all the extra antennas needed for your mobile broadband offering?

    Even on the older plastic ones where it might be possible to shove some new antennas in, Apple packs the guts of their laptops so tight that there's no place to fit the circuitry for the mobile broadband card you'd need to add.

    Stick to financial analysis and leave the technical stuff to the engineers.

    The key to such an offering is AT&T, not Apple. They need to bring the plan down in price to cheaper than traditional broadband offerings from what Comcast, etc. currently cost us every month and then make it super easy to add mobile broadband onto my existing monthly AT&T bill. The key is that I should be able to easily purchase and activate the device right in my own home like we can do with an iPhone today.

    AT&T already sells mobile broadband cards that plug into the PCIe slot in laptops or into a USB port on any computer. Don't put the cart before the horse telling people like Apple to integrate the technology. Get on AT&T to learn how to sell the technology first -- the same way Apple taught them how to sell phones. Then once the market is up and running we can worry about embedding mobile broadband technology into laptops.

  • Report this Comment On December 13, 2008, at 12:27 PM, stefnagel wrote:

    I recommend that Apple develop a larger version of the iPod Touch, rather than a smaller version of the MacBook.

    CONSIDERATION 1: I will not buy another mobile puter that does not fit in my front pocket because I simply will not haul anything larger around with me all the time. Conversely, I need a puter that I can keep with me at all times, in all places. Currently my iPod Touch commands the use of the right front pocket with all the authority my wallet possesses my back right pocket.

    Nor I do need a puter larger than 3.5 x 6 inches for what I do away from home and office: mainly research and read, often annotate and schedule, and regularly communicate in writing and with audio. But I do need a unit that provides a larger screen than the 2 x 3 inch Touch screen for purposes of text legibility and readability. For inputting, I find that "shape typing" can meet my needs. Audio input improvements are welcome.

    CONSIDERATION 2: No one should have to buy more than one Mac and then a Mac that can fit in their pocket. Anyone with $200 should be able to purchase a "MacTrou" (for The Rest Of Us) and year one of an annual subscription to MobileTrou, a complete content service that they can access from any wifi hotspot, allowing them to procure and access files of all sorts as well as web based services simply and securely.

    Simply put, the Mac/MobileTrou solution offloads complexity to the server side and offers simplicity and sophistication on the client side. Ultimately it can replace the wallet in pockets and pocketbooks and MobileTrou will create an ongoing revenue stream that even AT&T would envy.

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