Can Apple Save the Netbook?

— -- I'm a big fan of netbooks -- the compact, lightweight, inexpensive laptops pioneered by Asus with its Eee PC line. Small, rugged, and yet full-featured enough for Web browsing and other light computing tasks, my Eee PC 901 has become a treasured companion for business travel. But the cost of newer netbook models has crept up, and many vendors are now offering standard-sized notebooks at rock-bottom prices, making the value of netbooks less clear.

That's why I was excited to hear the rumors that Apple may be readying a low-cost netbook of its own, to debut in 2009. While other vendors scramble to keep up with the Joneses, Apple is well-known for creating innovative products that shake up staid categories. The prospect of an inexpensive mobile computer that melds the netbook form factor with technologies and concepts from the iPhone is intriguing. Could it really happen?

The netbook market could certainly use some innovation. Asus, the company that defined the category, seems to be heading the opposite direction. First it introduced the Eee PC 1000, which traded the older models' Lilliputian chassis for a more traditional laptop form factor -- and upped the price tag. Now comes news that the cost of the 1000 line will climb again, as the original 1000 series is due to be phased out in favor of the new 1002 model. Rather than innovating, Asus seems determined to back away from its original concept.

Not that the netbook category is likely to disappear completely. Sales have been solid enough that AMD has recently announced a low-powered chip to compete with Intel's Atom. In the current economic downturn, however, analysts are predicting an overall decline in microprocessor sales that could bite the low end of the notebook market.

Netbooks typically ship with underpowered CPUs, cheap onboard graphics, and no optical drives, which makes them poor choices for multimedia. A casual home user looking for an all-purpose PC would be better served by a sale-priced traditional notebook.

But a netbook could be ideal for a business user who wants a light satellite system to take on the road, without lugging their entire, accumulated work history along with them. The question is, are businesses really likely to buy two computers for their road warriors in today's economic climate, no matter how cheap netbooks are?

Asus seems determined to find out. Without releasing any details, Asus has let slip that it plans to offer a new Eee PC model for $199 next year. That certainly fulfills the "low cost" part of the netbook formula. But will the new machine still be more than a toy notebook, or will it cut too many corners to make it acceptable for business use?

Almost certainly it will, says Apple. The Motley Fool Web site quotes one Apple exec as saying during an October conference call, "We don't know how to make a $500 computer that's not a piece of junk." If not, then whatever new portable Apple might be readying had better be innovative indeed if it wants to compete in this market.

What do you think? Would you buy a netbook product from Apple -- or from anyone? Or are these cheap laptops too low-powered for your business needs? Sound off in the PC World community forums.

Neil McAllister is a freelance technology writer based in San Francisco.