If True, Apple's $800 Notebook Couldn't Come at a Better Time

Rumors are flying this week ahead of Apple's big Mac Book event on Tuesday that it will announce the long rumored sub-$1000 notebook. In fact, my friends at The Unofficial Apple Weblog are reporting that someone has gotten their hands on a price sheet ahead of the announcement suggesting that there will be an $800 Mac Book. If it's true, and nothing is official yet--Apple tends to be tight-lipped about announcements, as you are no doubt aware--it comes at perfect time as consumers are hungry for lower prices.

Apple Stock Price Nose-Diving

You might have noticed that the stock market has been tanking this week and Apple's stock price has been caught up in the downward spiral. Some analysts are saying this is a natural fall-out of the economic storm that's been brewing this Fall. The argument goes that if consumers stop spending money, then it's natural to expect that Apple products might fall down the list of priorities on the family budget after, you know, food, housing, heat, that sort of thing.

It makes sense, but as I wrote a couple of weeks ago in this space in What Does the Economic Downturn Mean to the Tech Sector?:

Mac User reported recently in article called Economy down, Apple up, that in spite of the economic situation, a survey by Changewave showed that people were still willing to spend money on Apple products, even though overall consumer electronics spending was expected to go down. Of course, this survey was taken during the summer before the September swoon, but it's still telling that in in spite of tightening personal budgets, people still lust after Apple products.

And Piper Jaffray’s Gene Munster is a bit more positive still looking for good growth from Apple products (maybe he read the survey I just cited).

So About that $800 Mac Book

So what does this have to do with the $800 Mac Book rumor? Well, Mr Munster suggested that an announcement without the sub-$1000 wouldn't have bode well for the already suffering stock price at Apple. Now, nobody at Apple could have predicted that economy would have taken the turn it has this Fall. Apple might have a lot of smart people, but this has to go down as extremely good timing. If people need to shell out some dough for a laptop--and yes even in bad economies people still need to get work done on a computer--chances are they are going to be looking very closely at price.

All things being equal if I'm looking at a Windows machine from Dell for say $700 and I can snag a Mac Book for $800, it's no contest, I'm going for the Mac. But if you're talking about a difference between $700 from Dell and $1100 from Apple, then Dell wins. It's simple math and in today's economic climate it makes even more sense. Today, you are looking at the $400 difference. On Tuesday, it could shrink to $100 and that would be huge for Apple (again, if it's true).

Apple marketers might not be clairvoyant, but if this rumor proves true, they sure are lucky.

[writingroads]

Ron - as usual, you are smart and on the money (pun intended). Wouldn't it be fair to say that Apple's tried and true combination of smarts and luck have gotten them where they are today? And, when you really think about, while Apple might not have expected this intense of a recession, they had to have seen something coming, right? But what really matters is my next question: how long should we wait before we start gobbling up Apple shares?

[Techwriter10]

Hi:
Thanks for the comment. I think Apple might have figured that they needed to get into the sub-1000 game whether or not they knew about or anticipated the recession. Regarding the stock, I don't give advice, but I've been wondering the same thing. :-)

Thanks again for the great comment.

[OlyComputers]

I don't think we're giving mac enough credit on their foresight here. The economy took a big hit just recently but there have been signs for a long time that people are going to be more cost-conscious in the coming months (hopefully not years). That said, I have no doubt Apple could release an $800 laptop with only a month or two notice. I predict that this will be a rebranded version of a dated macbook model. Think about it,how much would a 2006 macbook with a new case to match the current styling would sell for? I'd say around $800

[Techwriter10]

Good thought, but my guess based on all the rumors is that this is going to be an entirely new model. By most accounts it will be a light weight aluminum case and I'm sure whatever it is, it's optimized for OSX 10.5. So I doubt Apple would simply repackage an old machine. I think it's going to be one of those announcements that get people to stand up and take notice (again).

[Thinka]

I don't know if there's an obvious answer to this but, is this new Macbook going to be available in the UK at any point? And more importantly how long will we have to wait? I for one know I could do with a £500-£600 Mac, (the cheapest out here normally is about £800). And I know a few other colleagues who would be interested.

Oh and Ron, do you not think that there will be a performance trade-off? I mean are we still talking Core 2 Duo, 120 GB, 1 GB RAM etc?

[Techwriter10]

I can only speculate of course, but my guess is that it will be available in all markets eventually with a similar discount applied for currency differences. As for performance, and again purely speculating on my part, I would expect at a minimum it has a Core 2 Duo chip and gig of RAM. I can't see anything less that running Leopard. I imagine you might see them saving on hard drive size, perhaps 80 MB instead of 160. There is also talk of this new manufacturing process, which is also supposed to result in cost savings. But the bottom line is we'll all learn this together on Tuesday. It will be interesting to see what they offer for the money (if indeed the rumor is true because we've seen this with every Apple announcement and there's usually some truth to the rumor, but they often get at least part of it wrong).

[Techwriter10]

So I once again prove the danger of blogging about rumors. There is in fact, no $800 Mac Book or even $899. It appears there will be a sub-$1000 notebook, but just so at $999, hardly what people had in mind. Still the new Mac Books do look very interesting. They're just not as cheap as rumored or hoped for.