BUSINESS

Can Apple's new MacBook save the world?

By Brian Caulfield, Forbes.com
October 17, 2008 09:53 IST

In one of the slicker product placement tricks of all time, an Apple PowerBook helped save the world from alien invaders in the 1996 movie Independence Day.

Now, Apple's laptops will have a chance to take the hero role, for real, on Tuesday, when Apple is expected to announce its latest gear.

With the world economy in crisis--and even Dell reportedly thinking of selling off its factories--bloggers are keyed up for some astonishing news from Apple. There has been feverish speculation, for instance, that Apple has built a secret U.S. wunderfactory that will use robots equipped with lasers and water jets to carve notebook computers out of blocks of aluminum.

Jobs may not be building a battalion of robots, but he does have marketing news up his sleeve. Apple informed the press on Thursday that they are to gather next week at its Cupertino, Calif., campus for an announcement--presumably about its new laptops. On Friday, Apple led a tech stock rebound by the day's end, as Apple shares surged 9% to $96.80 from $88.74. (Nasdaq finished almost flat after an earlier tumble.)

The stakes are high. While Apple's iPhone grabs headlines, Apple's PC business is chugging away, thanks in large part to its notebook computers. Apple grabbed 10.6% of the North American market for laptop computers in the second quarter, up from 6.6% during the year-ago period, according to a report release last month by tech tracker DisplaySearch.

Now for a reality check. On the speculation that Apple will use lasers and water jets to sculpt laptops out of aluminum blocks, Kelt Reeves, chief executive at boutique PC-manufacturer Falcon Northwest says the process of creating out aluminum parts using lasers and water jets isn't cheap.

Northwest's PCs, for example, use an aluminum chassis with the company's Falcon logo carved into the front with water jets, and cost between $300 and $400--that's a third of the price of one of Apple's MacBook's right there.

Carving the entire chassis out of a single block of aluminum seems even less likely. "It would be a monstrous waste if you had to get a block of aluminum and scoop the middle out of it," Reeves says.

That said, Apple will probably find a way to use slick metal cases to add some high-end appeal to its entry-level MacBooks. In a note to investors Friday, Piper Jaffray analyst Gene Munster said he expects Apple will add a number of premium features to its low-end notebooks. On his list is an aluminum case like the one used on the more expensive MacBook Pro and a fat touch pad, which can work with Apple's multi-touch gesture-based input system.

But the most powerful appeal will likely be price. Munster expects that Apple will drop the price of its MacBook laptops to between $899 and $999 from the current $1099.

Such a price drop could counter Dell's move to the low end. Dell is still holding onto its spot at the top of the North American notebook market, with 21.9% of the market. The Round Rock, Texas-based company is determined to challenge Hewlett-Packard's dominance elsewhere in the world and to counter the growing threat from Apple.

To do that, Dell's pushing a new line of notebooks dubbed Studio that start at $749, as well as the $349 Inspiron Mini 9, a sweet little machine built around Intel's Atom processor. The duo could put Dell in one of the few good spots in the computing market, particularly if the economy continues to sour.

Unless Apple muscles its way in, of course. Jobs may not be able to save the world from aliens or even carve laptops out of solid blocks of metal. But he surely has shown he knows a thing or two about how to compete.

Brian Caulfield, Forbes.com
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