Apple is reportedly working on a 10-inch touch-screen PC, but, despite speculation that the company is getting ready to enter the netbook market, it's more likely Apple is planning a unique device that will command a much higher price.

The latest report on Apple's moves came Wednesday from the Reuters news agency, which quoted an anonymous source saying Apple would take third-quarter delivery of a 10-inch touch screen from display specialist Wintek of Taiwan. Similar media reports in that country this week also said Taiwan-based Quanta Computer would make the actual PCs for Apple.

It's no secret that Apple executives have been watching the booming netbook market closely. The mini-laptops, which have screen sizes of 10 inches or less and cost less than $500, have lately been the hottest-selling PCs. Shipments of the devices reached 10 million units last year, with half of the units sold in the fourth quarter, according to IDC. Shipments of the low-cost PCs, which accounted for 7% of overall mobile PC shipments last year, are expected to double this year.

Nevertheless, with many netbooks selling for as little as $300, it's unlikely Apple will be making a device to compete in such a low-margin market. Apple's longtime strategy in the PC market is to compete at the higher end with products that have real or perceived value in design and features.

"They're never going to be followers," Ezra Gottheil, analyst for Technology Business Research, told InformationWeek.

Gottheil agrees with reports that Apple's device is likely to not have a keyboard and to cost from $800 to almost $1,000. "It won't look like a netbook," Gottheil said. "It may very well not have a keyboard, and it won't compete on price."

Which isn't to say the device won't encompass some of the features of a netbook. Apple's version of a touch-screen PC is likely to be able to browse the Web, access e-mail, play music and video, and offer social-networking features. In essence, it would fall between the iPhone and iPod Touch and a MacBook.

"This will be Apple's take on some of the virtues of the netbook," Gottheil said.

One feature Apple may focus on is the ability to read electronic books, magazines, and newspapers. Online retailer Amazon.com, which makes the successful Kindle e-book reader, has released an application that turns the iPhone into an e-reader. Apple would likely take this concept further in a touch-screen PC, Gottheil said.

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