No Interest in Netbook's Today
Still, Apple ASPs declined during the quarter, even as margins increased. "In the notebook business we did have an ASP decline, sequentially, and that was mainly driven by a higher mix to the $999 MacBook," Cook said. His statement is yet another indicator that Mac pricing is higher than what people want to pay in this economic climate. That said, the company has no plans to risk lowering ASPs, margins or the Mac brand's value before moving into the netbook market. "When I look at what's being sold in the netbook space today, I see cramped keyboards, terrible software, jerky hardware, very small screens and just not a good consumer experience and not something we would put the Mac brand on," Cook told financial analysts. He emphasized: "It's a stretch to call them a personal computer."Cook asserted that for many people an iPhone or iPod Touch would be a better alternative to a mini-notebook. "We have other products to accomplish some of what people are buying netbooks for," he said." Part of netbooks' appeal is their lower pricing, which Apple has more broadly resisted. The company has kept prices high to preserve margins, something Cook suggested wouldn't change, even with Apple's market share in decline. In the United States, its share dropped from 9 percent in the third calendar quarter 2008 to 8 percent in the fourth quarter, and to 7.4 percent in the first quarter of 2009, according to Gartner. During the conference call, Cook singled out the U.S. market as being different from other geographies, with slower educational and professional sales sapping market share. But that statement isn't clear from the fiscal-second-quarter numbers, where unit shipments declined 8 percent in the Americas and Japan and increased 5 percent in Europe. Cook made clear that Apple wasn't willing to sacrifice margins for short-term market share regains. "Do I care about U.S. share?" he asked. "Of course, I do. However, I think cycles come and cycles go. What we're about is making the best computers in the world, not making the most." Cook added: "We believe that if we do that over the long term, we will gain share."
While Cook said Apple has some "interesting ideas in this space," he emphasized that "it's not a space that exists today that we're interested in, nor do we believe that customers in the long term would be interested in [it]."