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Apple’s Next iPhone: A Laptop?

The Thrill of a Cheap Apple Laptop

In the lead up to Apple’s announcement of updates to its laptops earlier this week, there was a rumor of an $800 laptop that took hold like wildfire. The idea of a cheap Apple laptop captivated industry watchers. And rightly so; low-priced “netbooks” are a quickly growing sector of the computer industry.

As we learned on Tuesday, although it did lower the entry-level for its laptops from $1099 to $999, Apple has no plans to introduce a cheaper laptop at this time. The rumor was likely idle speculation dressed up by Duncan Riley at Inquisitr as news to spark page views for his web site.

The iPhone in Laptop Form

In a commentary on Apple’s press conference, John Gruber at Daring Fireball makes an interesting aside:

I think — and this is nothing more than my own speculation here — that it’s more likely that a hypothetical really small (as in much smaller than even the Air), really cheap (as in less than $700) notebook computer from Apple would not be a Mac. It’d run some variant of “OS X” of course, but I think it’d resemble a hot-rodded big-screen iPhone with a keyboard, not a stripped down small-screen MacBook. The iPhone OS would run faster on a $600 netbook than it does on an actual iPhone. Mac OS X would run slower, probably a lot slower. Apple builds things up, not down. Just my hunch. (Also: It’s too bad Apple has already used the name “iBook”.)

This idea of an “iBook” based on the iPhone’s mobile computing platform is a very exciting idea, and in my mind, is more likely to happen than Gruber is willing (or too modest) to say.

From a financial perspective, Apple sees the iPhone as a mobile computer platform first, a part of the iTunes content platform second, and a phone last because there is a lot more potential growth in its platforms than in a phone. (See Microsoft Windows.)

Even before the iPhone’s launch in June 2007, there was speculation that a cheaper iPhone “nano” would quickly follow. As recently as last Friday, Shannon Cross, an analyst quoted in the New York Times, repeated this line of thought:

In 2009, we’ll get a lower-priced iPhone — iPhone nano — which will bring it to the masses.

There are two problems with this. 

First of all, this speculation overlooks the iPod touch. I contend that the iPod touch is the iPhone nano. Apple already extended the mobile computing platform down-market by launching the iPod touch in September 2007. (Software written for the iPhone works on the iPod touch as well — except for software that requires features, such as GPS, that are available only on the iPhone.) A 16GB unlocked iPhone costs over $800 USD whereas a 16GB iPod touch retails for $300. (A subsidized 16GB iPhone costs only $300, but it comes with an expensive phone contract attached.)

Secondly, Apple cannot take any of the three major features (iPod, Internet, phone) from the iPhone and still have a viable iPhone-class product. An iPhone without the iPod negates its convenience and main selling point. An iPhone without the Internet neither serves Apple’s plans for a mobile computing platform nor the telecom carriers’ plans to use it to grow use of their data services. The only viable option is the iPhone without the phone features. What you end up with is the iPod touch.

If Apple has already gone down-market with the iPod touch, it may be time to go up-market. This is where Gruber’s speculative “iBook” fits in very well.

A 16GB iBook could be sold either subsidized for $300 (just like the iPhone) and packaged with 3G by telecom carriers or sold unsubsidized for $800 with Wi-Fi only. This may be the reason why the iPhone does not allow tethering to a laptop: Apple would rather try to sell you another device, the iBook, and the carriers would rather sell you another data services contract.

On the iBook Name

I disagree with Gruber’s regret that Apple has already used and retired the iBook name. There’s no reason Apple cannot revive it. In fact, the iBook’s residual cachet and name recognition is an advantage that would overpower any confusion it might cause. Plus, it would unite the mobile computing platform’s hardware under the “i” series of products: iPod, iPhone, and iBook. (Pity the iMac.) The Macintosh platform’s hardware would remain united under the “Mac” name: MacBook, MacBook Pro, Mac Pro, and iMac.