Netbook Success Could Bring MacBook Prices Down

According to reports, Apple is planning to cut its laptop, the MacBook, by around $100-$150. It's as much a response to the competition from netbooks as to the recession.

The main source of the rumors is the usually reliable Appleinsider.com site. It says Apple's plans to develop a tablet computer -- perhaps like a much larger iPod Touch -- will wind up taking longer than expected. (Source: appleinsider.com)

That's a blow to plans that the tablet will stop users defecting to netbooks, the increasingly popular slimmed-down laptops which offer basic functionality, notably web surfing, at a budget price.

Until the tablet is available, Apple is reportedly hoping to deter defectors by dropping prices, most notably on the 13 inch MacBook. The cuts, which may also extend to the iMac desktop, will likely be in the $100 to $150 range. (Source: cnn.com)

Price War Unlikely

Price cuts would be a major change in tactics for Apple. When it avoided significant reductions in the prices of its last range of new models, it appeared clear the firm was not interested in competing on price and instead wanted to position itself as a premium brand.

If the price cut rumors are true, they will inevitably be seen as a response to the recent stinging advertising campaign by Microsoft which uses 'ordinary shoppers' to directly attack Macs as overpriced.

Unfamiliar Territory for Premium Apple Brand

Whether the price cuts would work is another question. Even with the full $150 reduction, the 13 inch MacBook would still cost around $849. That's more than double some of the most popular netbooks, and still exceeds many if not most PC laptops.

However, while Apple may be eager to promote its newly priced computers as offering good value, the problem is that the firm will likely never cut costs enough to satisfy buyers driven mainly by price, simply because Apple's brand strategy does not allow its products to appear 'cheap'.