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I don't envy Tim Cook.
That's not a slight. Cook strikes me as a smart, engaging guy who handled himself very well during Apple's (Nasdaq: AAPL ) recent earnings call. Who cares if he lacks Steve Jobs' legendary gregariousness? He's obviously in control, and that's what the iEmpire needs right now: a steady hand. Mostly, anyway.
Getting to the core issue
But Apple also needs innovation. A big idea. Soon.
Netbooks are the problem. Apple shouldn't rush to create one, but eventually, it will need an alternative to what Dell (Nasdaq: DELL ) , Hewlett-Packard (NYSE: HPQ ) , Intel (Nasdaq: INTC ) , and others are creating; netbooks are the next great format for innovation. As Computerworld's Mike Elgan wrote recently, "Desktop PCs are the least innovative areas of consumer technology."
You might argue that Apple has done wonders for the desktop, and I'd agree. The iMac, by itself, has reshaped what we've come to know as the desktop form factor. The MacBook line has also won acclaim and, in the process, market share for Apple.
Even so, with Adobe (Nasdaq: ADBE ) , Google (Nasdaq: GOOG ) , Microsoft (Nasdaq: MSFT ) , and, yes, Apple beefing up their consumer-facing cloud computing offerings, netbooks don't need the storage capacity or horsepower of your average laptop. That's a huge selling point for both consumers and business users. Researcher Gartner says that netbook unit shipments rose to 4.4 million in the third-quarter. Analysts there predict that total netbook sales will double in 2009.
But, again, Apple needn't hurry to build a netbook of its own. A recent survey from Biz360 shows that "net advocacy" for netbooks was 40% lower than that for traditional laptops. Users prefer a full-featured system.
My fear is that Cook and team will interpret customer data like this to mean that users don't want a lower-cost alternative to a MacBook. Cook came just short of saying exactly that during the earnings call:
We're watching that space. But, right now from our point of view the products in there are principally based on hardware that's much less powerful than we think customers want. Software technology that is not good, cramped keyboards, small displays ... And so, we don't think that people are going to be pleased with those types of products. But we'll see.
Biz360 supports Cook's assertion, but as the comments on this article show, users believe that Apple is preparing to reinvent the category, as it did with the iPhone and the iPod before it.
"Apple's experience with the touchscreen and accelerometer technology in the iPhone and iPod Touch could easily be implemented into a NetMac allowing for tablet style iPhone input," wrote Fool reader lewsreviews. "For these reasons I think that Apple could and will make a great product for the netbook market, and would do very well against the $500ish netbooks even if the Apple product was priced slightly higher."
What if Cook disagrees? What if he believes it's smarter to avoid the category altogether? Color me worried.
A time of maximum opportunity
Not because netbooks are The Next Big Thing, but because thanks to the disruptive nature of netbooks, someone is going to invent The Next Big Thing. Something that solves the problems Cook spoke of during the earnings call:
- Underpowered hardware
- Limited software
- Cramped keyboards
- Miserly displays
Jobs' Apple would see this as an opportunity. Will Cook's? I hope so. So do most investors, I suspect.
With due respect to my Foolish colleague, Anders Bylund, Apple shareholders aren't all that interested in maturity. They want a rebel and expect a disrupter. They remember how Jobs flew a pirate flag over the headquarters of the Macintosh division in Apple's earlier days. They see netbooks, visualize that flag, and long for something Insanely Great.
That's why the pre-Macworld rumor reports buzzed with hope for an iPhone nano, a smartphone equivalent to the envelope-sized MacBook Air that Jobs unveiled last year.
Perhaps we should all take our cue from Apple co-founder Steve Wozniak. He recently appeared on CNBC to reassure investors that Apple's bench is deep and that its existing product lineup will carry through Jobs' six-month medical leave. Wozniak also said that an extended rest for Jobs might help him to dream up new, breakthrough products.
I hope so, Woz. We've just celebrated the Mac's 25th anniversary -- a reminder of what can be when Apple seizes a moment of maximum opportunity. A moment like right now.
Show us your rebellious side, Mr. Cook.