Just as Apple was unable to keep a lid on the news of its iPhone before its official announcement, it hasn’t been able to completely quell the speculation surrounding its imminent media tablet. In its teleconference to discuss its most recent and very impressive quarterly results Apple’s COO, Tim Cook, was derogatory about netbooks yet again. Apple is clearly positioning itself to produce “the device that the netbook wants to be, but clearly isn’t.”

I’ve just reviewed 10 Pointers To What Apple’s Netbook Will Be Like and right now I can’t disagree with anything suggested there. It seems pretty much on the mark. The new device will be a tablet, no keyboard laptop and the price point will fill the gap between the iPhone and the low end Apple laptop.

Will Apple cannibalize its laptop Market?

This is a question that can’t be answered precisely without spending a fair amount of time using the still-a-matter-of-speculation device.  The truth is that the netbook has cannibalized the laptop market in a big way. There are two kinds of buyer in the netbook market; the price sensitive buyer and the laptop buyer.

1. The price sensitive buyer: The price sensitive buyer is buying a device that wasn’t previously available at such a price point. To some buyers, devices in the $300 price area are “throw away” purchases. So what if I have to throw it away? Some buyers are buying because the price point is now low enough for a device for the kids. In developing countries, these buyers are buying because the price is now low enough for them to own a computer.  The point about these buyers is that they are all new buyers. They are not buying the netbook instead of some other device.
2. The laptop buyer: There is one huge advantage that the netbook has over every other variety of laptop. It doesn’t weigh very much. Weight is a big buying criteria. Netbooks have already spread themselves out across a wide price range to reflect this fact. In general you use fewer applications on a laptop, so you need less computer power, unless the laptop is also used as a desktop. Synchronizing information between laptops and desktops in now a long-solved problem. When a laptop buyer buys a netbook, a laptop sale fails to happen.

That’s the problem that Apple faces. There is little doubt that it will do an excellent job with its media tablet. It will have very little difficulty positioning its device as “the device the netbook wants to be” and it will be instantly popular on the day that it’s released. But it will have some difficulty preventing the cannibalization of its own laptop market.

A Media Device is a Media Device

A partial solution to the cannibalization problem is to make the new media tablet more like the iPhone than the MacBook. Have all the applications fed to the new device from the Apple App Store and have the interface be very touch oriented. Apple will need the consumer to believe that: if I need a keyboard, I need a laptop, if I don’t I need the tablet. That won’t prevent cannibalization, but it will keep it to a minimum.

The other part of the game will be to make this the media device to die for. The goal will be that it becomes the must have video device or games device for an airline journey. Again this is more like the iPhone than a laptop. And Apple will surely include the possibility of it being able to be a phone, complete with carrier contract.