Is Apple Making a Huge Mistake?

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The kids are headed back to college, but with fewer Macs.

A recent survey from consumer electronics website Retrevo says that 49% of students plan to buy Windows laptops and 34% want netbooks. Only 17% said they would buy Macs.

What happened, Apple (Nasdaq: AAPL  ) ? Last March, a Morgan Stanley study found that 40% of college students planned to buy a Mac. Sure, these are different surveys from different providers with different methodologies, but the gulf is enough to suggest there's been movement in market sentiment. What gives?

Retrevo's answer is, not surprisingly, the economy. Kids or their parents aren't willing to pay $1,000 for a new Mac when they can get a comparable PC from Dell (Nasdaq: DELL  ) or Hewlett-Packard (NYSE: HPQ  ) for much less. Or better still, a netbook for as little as $200.

There are plenty to choose from, thanks to increasing interest in this form factor among chip makers and hardware and software suppliers. Intel (Nasdaq: INTC  ) was an early adopter, but now NVIDIA (Nasdaq: NVDA  ) , Nokia (NYSE: NOK  ) , and Sony (NYSE: SNE  ) also want in on this market.

Apple is one of the few that doesn't, if the public statements of CEO Steve Jobs and COO Tim Cook are to be believed. I've backed that decision more than once. Apple doesn't do well playing follow-the-leader.

But there's also little doubt that high-function, lower-cost, small form factor machines are here to stay -- at least for a while. Apple needs an answer for this market; it needs to ship the iTablet. Soon.

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Fool contributor Tim Beyers had stock and options positions in Apple and a stock position in Nokia at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy would rather forget its college days.

Read/Post Comments (11) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 25, 2009, at 3:42 PM, TabCocovillea wrote:

    I'm calling bull! Netbooks are currently the "most returned" consumer electronics item, due to the shoddy construction and lack of real processing power. Compare returns of product with sales, and you'll discover the balance shifts drastically in Apple's favor.

  • Report this Comment On August 25, 2009, at 3:42 PM, Winskidoodle wrote:

    Hmm, not difficult to see why this is. Had the author perused the Retrevo website, he'd quickly find that it is very PC-centric. In fact, Apple is not listed under the Back To School computers, the Best Selling, or the Highest Rated. No, they have a special category for Mac computers.

    It's no wonder that a site that doesn't consider Apple products in the same category as Windows products has a non-scientific poll suggesting that no one is buying Apple products.

  • Report this Comment On August 25, 2009, at 4:17 PM, netbookuser24 wrote:

    Can't wait for the Nokia Netbook...a true mobile 3G Netbook with a 12 hour battery life. Hard to beat that.

  • Report this Comment On August 25, 2009, at 4:22 PM, envisiongroup wrote:

    I don't think they are making a mistake by not offering a cheap netbook. Apple is a premium brand. If they were to offer a really cheap product, it would diminish their brand perception. BMW would never consider releasing something to compete with a Hyundai. It just wouldn't make sense. Apple is thriving, despite the economic downturn and they are doing so by sticking to their brand foundation. They can't be everything to everyone and they don't want to be. There will always be people who want the cheapest products possible, even if they are built poorly and don't perform well. That's not Apple's space to play in.

  • Report this Comment On August 25, 2009, at 4:25 PM, lkmd2016 wrote:

    A Microsoft survey shows that most students are buying PC's and Dells survey show that most of the PC's are Dells. Wow !!! Sounds like the college students are getting dumber. I just cant believe this is so. It just amazes me that anyone can publish surveys on the internet and it gets picked up by yahoo's financial section. I did a survey of ten college bound students and 100% were taking their macs. Pick that up Yahoo!!!!!!


  • Report this Comment On August 25, 2009, at 4:32 PM, pcparadigm wrote:

    I think the mistake they are making is not licensing OSX. Embrace Psytar, don't sue them.

  • Report this Comment On August 25, 2009, at 5:46 PM, StockMonkey wrote:

    I expect better from The Fool than this kind of middle-school "reporting." Here's another survey: 100% of college kids plan to buy Macs. You just read it on the Internet so it must be true. Better factor that into the article, too.

  • Report this Comment On August 26, 2009, at 7:38 AM, KWT8011 wrote:

    I don't know about the survey but I love AAPL as an investor, not as a consumer.

    I recently was putzing around looking at brand new desktops. I can get a Mac mini with 1G of memory, 120G HD and 2.0 GHz processor (without monitor) for $563. Or for $5 more, I could pick up an HP with 6G of memory, 500GB HD, and a 21" monitor (Don't remember the processing speed, but I do know it was 2+GHz). I don't think any competitor even offers less than 2 G of memory anymore.

    I would not be surprised if the parents footing the bill for college (in this economy) would be cutting back in this area. Buying a cheap PC was one of 5 suggestions on Kiplinger this month for saving on college expenses.

  • Report this Comment On August 31, 2009, at 3:54 PM, peterliu wrote:

    I predict netbook ( Windows or Mac? ) will dominate the laptop space. My daughter is heading to college this fall and she loves the netbook i bought for her. It it faster than her 2 year old desktop and it has more power than she'll need to do her daily tasks such as IM, email, webcam and writing papers.

    I consider the netbooks are like high end calculators and i don't mind to get another new one in 2-3 years because of the cost.

    A few other facts for you guys:

    Last month, I have over 50 relatives and friends came over to US for my niece's wedding. They all carried a netbook.

    When I checked out the netbooks at BestBuy, most of the customers were also checking the netbooks also.

  • Report this Comment On August 31, 2009, at 4:06 PM, mikecart1 wrote:

    A $200 netbook = $200 of trash

    Any decent netbook is at least $800+.

  • Report this Comment On September 01, 2009, at 3:00 AM, hanksd wrote:

    My son owns a 2 year old MacBook Pro. He's at UC Berkeley. Last year nearly 50% of his dorm floor used a Mac.

    My daughter matriculates in Santa Barbara. 50% of her friends use Mac. She sold her 3 year old MacBook (white) for $300—$200 less than offered—to a friend and bought a 13" MacBook Pro.

    Wife uses a 2 year old MacBook Pro. I use a brand new 15" MacBook Pro. And a 1 year old Mac Mini serves as our TV media center.

    More friends are buying Mac. I see few people using notebooks these days and fewer using PCs.

    I own AAPL stock which makes buying Mac a no brainer.

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