The case for a netbook at Macworld by Philip Elmer-DeWitt @FortuneMagazine December 16, 2008, 7:48 PM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons TBR‘s Ezra Gottheil issued a remarkably detailed description Tuesday afternoon of the “inexpensive mobile device” he believes Apple AAPL will announce at MacWorld on Jan. 6 for delivery mid-year. “It will come in two sizes,” he writes, “one much like the MacBook Air and one similar to a netbook, with the smaller unit priced at $599.” Almost as if he had seen the specs, Gottheil ticks off the benefits the new device offers the user: It will provide web access, e-mail, media playing, and essential applications at a single low price. Computer beginners will be able to start using it quickly and easily. Users will have fewer questions, problems, conflicts and security breaches, as the device will be less intimidating than both PCs and Macs. As with the iPhone, iTunes and the App Store will offer an array of content, applications and games. As with the iPhone, the software can be rebuilt from the App Store. With an optional online backup service, the entire device can be restored. Under a more expensive support plan, Apple will be able to send the customer a replacement functional device if theirs is stolen or physically damaged. There are also several benefits for Apple: It will open up new markets, including emerging economies, price-sensitive consumers, and those for whom all PCs, including Macs, are too complicated. Because all applications are delivered through the iTunes App Store, Apple will maintain sustained relationships with users, making it easier to upsell and cross-sell to existing customers. TBR believes Apple will make online services like MobileMe increasingly attractive to all customers, but purchasers of the new Apple device may find its simplicity especially appealing. The device will provide yet another entry point into the Apple digital hub family of products. Apple will be able to sell the captive peripherals that work with the device. Moreover, the thing will give Apple entree into the most price-sensitive markets — an important consideration in the middle of a recession — with, as Gottheil sees it, only minimal risk of cannibalization of MacBook sales. Of course, as John Paczkowski of AllThingsD reminds us, Steve Jobs pooh- poohed the whole netbook idea last October, and famously added: “We don’t know how to make a $500 computer that’s not a piece of junk, and our DNA will not let us ship that.” (link) But Gottheil’s device, conveniently enough, starts at $599, giving Jobs just enough leeway not to have to eat his words. We were intrigued, so we called Gottheil and asked for the source of his information. “I made it up,” he said, with remarkable candor. “I have no spies or internal information. It’s triangulated. It’s logical. It fits with what they’re trying to do. And it solves a lot of problems for them.” And it gives us something to talk about, three weeks before the Macworld keynote.