Apple Earnings Shrug Off Economy's Bite - Page 2

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Mac netbook? Don't hold your breath

The lack of news about an Apple netbook may seem especially surprising considering the relative strength of the market segment compared to traditional notebooks and desktop PCs.

Yet despite the potential allure of netbooks, and the surging rumors around Apple's entry into the space, Cook stuck to the company line -- that Apple's not interested in diluting its brand by playing in low-cost systems.

"When I look at what is being sold in the netbook space today, I see cramped keyboards, terrible software, junky hardware, very small screens and just not a consumer experience ... that we would put the Mac brand on, quite frankly," he said. "So it's not a space, as it exists today, that we're interested in, nor do we believe customers in the long term [are] interested."

"If we did find a way that we can deliver an innovative product that really makes a contribution, then we'll do that -- and we have some interesting ideas in this space," he added.

He also reiterated that Apple already has low-end "computer" offerings for mobile browsing and e-mail: the iPod Touch and iPhone.

"We have other products to accomplish some of why people buy netbooks ... so, in that particular way, we play on an indirect basis."

Cook also couldn't help pointing out that most of Apple's competitors in the PC space have jumped on the netbook bandwagon, which today accounts for one of the industry's strongest segments -- but which Apple hasn't had to rely on to boost its numbers.

"For 17 of the last 18 quarters ... we've exceeded the market rate of growth and to exceed it in this economy is quite an accomplishment, especially when you look at these very low-priced netbooks -- that I think is a stretch to call them a personal computer -- is really propping up the unit numbers of the industry as a whole."

Keeping tight with AT&T

Apple observers were also watching closely to see whether Apple would indicate that its relationship with AT&T might be souring, enabling Apple to go elsewhere -- like to Verizon Wireless.

However, Apple's executive said they're not likely to leave AT&T.

"We view AT&T as a very good partner," Cook said. "We believe they're the best wireless provider in the U.S. and we're very happy to be doing business with them. They have been doing a very good job with the iPhone -- they have put the full force of their company behind it. We're very happy with the relationship that we have and do not have a plan to change it."

He also added that one reason to stick with AT&T is that the iPhone uses GSM wireless technology -- rather than the competing CDMA technology favored by Verizon Wireless and others, but which has limited uptake outside of the U.S.

"We chose from the beginning of the iPhone to focus on one phone for the whole of the world -- and when you do that, you go down the road of GSM," he said.

Return of Steve

Apple also faced questions on the condition of its CEO, Steve Jobs. While ostensibly on medical leave until June, Jobs remains closely involved with the company's product decisions, according to reports.

Again, however, Apple brass had little to reveal.

"We look forward to Steve returning to Apple at the end of June," Oppenheimer said in response to questions seeking an update on Jobs during the call.

Update adds comments from Oppenheimer and Cook.