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1/16/2008
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Compared To Rivals, Apple MacBook Air Pricing No Bargain

Apple is entering this market niche charging its usual premium, betting that people will pay more for design.

In releasing the MacBook Air, Apple is betting that the PC market has changed enough to where consumers will be willing to pay more for light and sexy, and ignore the lack of some traditional features.

The MacBook Air, launched Tuesday by Apple chief executive Steve Jobs at the Macworld conference in San Francisco, reflects how consumers' attitudes toward notebooks, and PCs in general, have changed, experts say. Rather than buy solely on a comparison of specifications, people today are placing a larger emphasis on looks and on whether the machine satisfies a particular need.

In the sub-notebook category, that would mean light, as in less than four pounds, long battery life, easy wireless connectivity, and a full keyboard. Apple is entering this market niche charging its usual premium, betting that people will pay more for design.

And on that level, Apple delivers. The Air may not be the smallest sub-notebook in overall size, but it is the thinnest, tapering from three-quarters of an inch at the hinge to 0.16 of an inch at the other side, where the notebook has a magnetic latch. With a 13.3-inch display, the three-pound portable is small enough to fit in an interoffice manila envelope.

The Air comes standard with a Core 2 Duo 1.6-GHZ processor, an 80-Gbyte hard drive and 2 Gbytes of memory; and it supports the fastest Wi-Fi standard of 802.11n. It also has a battery life of five hours, according to Apple.

But what it doesn't have for its baseline price of $1,799 is an optical DVD drive. It also has only one USB port, non-expandable memory, a battery that's not user replaceable, and no Ethernet port. Many of those missing features are the trade off for having a thinner machine.

A comparable system from Dell would be the XPS M1330, which is more than $500 less. For that price, the machine comes standard with a 13.3-inch display, a 2-GHz Intel Core 2 Duo processor, 2 Gbytes of memory, a 160-Gbyte hard drive, a DVD drive, two USB ports, and an Ethernet port. The notebook has Wi-Fi support, but not 802.11n. It's also unclear what the life of the standard battery is, but Dell says an optional 9-cell battery, which would add weight, is good for up to seven hours.

The Dell notebook is nearly a pound heavier than the Air at 3.97 pounds, and is thicker. The machine starts at 1.3 inches at the hinge and tapers off at 0.9 of an inch. While the Air comes standard with an LED display, that's an option with the Dell computer.

For $1,400, Sony is selling the Vaio SZ with a 13.3-inch display, a 2-GHz Intel Core 2 Duo processor, 2 Gbytes of memory, a 120-Gbyte hard drive, and a DVD drive. It also supports 802.11n. The battery life is four hours, the computer doesn't come with an LED display, and it weighs four pounds and is 0.9 of inch thick.

Lenovo is planning to release in April a sub-notebook called the IdeaPad U110 that will have an 11-inch screen, weigh 2.3 pounds and be 0.7 of an inch thick. Further specifications and price are not yet available, so it's impossible to do a comparison with the Air at this time.

As the comparisons with the Dell and Sony machines show, Apple is making some tradeoffs in features, betting that consumers will make the sacrifices in favor of carrying a lighter, thinner machine. "Realistically, [Apple] has set a new standard for thinness," Richard Shim, an analyst for IDC, told InformationWeek.

Analysts acknowledged that Apple was charging a premium, but said the price was not unreasonable. "Basically, you've got a new generation of a very capable, very light, full-fledged notebook," said Ezra Gottheil, analyst for Technology Business Research.

Steve Baker, analyst for The NPD Group, said Apple can charge more because it's targeting consumers that aren't buying based solely on a comparison of processors and hard drives, but want a thin, lightweight machine that has the cool factor. "There's no crime for Apple to charge extra for those kinds of things," he said. "That's called marketing and segmentation."

People are buying an increasing number of notebooks to fit different needs. Some are looking for ultra-portable 7-inch models like the Eee PC from Asus, while others want desktop replacements or something in between. IDC predicts that more notebooks will be sold this year in the United States than desktops, and believes the same will happen globally next year.

And with consumers buying more notebooks and more than one computer, the consumer market is getting increasingly more fragmented. "We're in an era of segmentation, and niches; and this product fits a niche," Baker said of the Air. "Is it going to be their best-selling notebook? No. And it's not intended to be."

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