Apple's Lack of a Netbook Slowing Sales, Reports Indicate

Apple competitors HP, Dell and Acer pull away from Apple as a down economy makes netbooks-smaller, less expensive notebooks-more attractive to consumers. Apple has repeatedly stated it has no interest in the netbook market.

Reports from research firms Gartner and IDC show Apple, the company whose products are synonymous with style and substance-at a price-lagging behind its less sophisticated, but far less expensive, competitors Hewlett-Packard, Dell and Toshiba. This week's report from IDC projected Apple would take fifth place in second quarter U.S. market unit shipments, with 1.21 million units sold. This places the company behind Dell, HP, Acer and Toshiba.

Gartner, however, gave fourth place to Apple, estimating shipments for the quarter at 1.4 million units, to Toshiba's 1.1 million units shipped. IDC also estimated Apple claimed fifth place in U.S. market share, with 7.6 percent (down from last year's figure of 8.5 percent), placing the company behind Dell, HP, Acer and Toshiba again. Gartner, conversely, gives 8.7 percent of the U.S. market share to Apple and 6.8 percent to Toshiba.

One reason Apple may be struggling to gain market share while competitors such as Acer and Toshiba (who showed double-digit gains in market share) is Apple's lack of an inexpensive netbook offering, which the company has repeatedly claimed it has no interest in producing. In April, Apple CFO Tim Cook told financial analysts during a conference call that a netbook is "not a segment we would choose to play in."

Around that same time, Gartner's first-quarter PC shipment data showed the negative effects of mini-notebooks on the larger PC market. Worldwide, PC manufacturers shipped 67.2 million units, for a 6.5 percent year-over year decline. However, even without netbooks, Apple margins actually increased during the first calendar quarter, which is the company's fiscal second.

Mac shipments were actually surprisingly strong during the first calendar quarter-2.2 million units-considering how much netbooks buoyed Windows PC unit shipments, while sapping margins. Mac shipments into the channel declined 3 percent year-over-year, but sales out to customers were flat sequentially. First to second quarter, Mac notebook units fell 22 percent and 25 percent by revenue. Cook at the time called Mac sales "a solid performance, particularly in this [economic] environment."

However, an IDC analyst pointed out Apple may want to think twice about staying out of the netbook market-which has grown quickly as a down economy makes the prospect of a $500 or less portable PC more appealing. "People are focused on $600, $700 notebooks," IDC analyst Bob O'Donnell told The Associated Press. "Guess what Apple doesn't have: any notebook below $999."