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Is the Pressure Growing on Apple to Produce Cheap Gear?

When you’re number one in a market, the pressure is always on to somehow remain on top, or even expand the difference between you and number two.

Apple has to worry about that primarily with the iPod and iTunes. But since both are so far ahead of the rest of the market, it doesn’t seem likely that a true competitor will arise before the entire segment becomes over-saturated and irrelevant, and that’s probably already happened. The iPod touch did well at Amazon, and that an obvious bridge product that takes the digital media player concept to the next generation.

What’s that next generation? Likely some sort of netbook-style device. It appears that such things are doing pretty well right now, if only because many customers simply cannot afford a full-featured note-book. For simple email, Internet surfing and word processing, a smaller portable computer with a slower processor and tinier hard drive might be an adequate solution.

I am, though, assuming that most of the people who bought those netbooks this holiday season are actually going to be reasonably satisfied with their purchases, and aren’t even now returning them in droves because they just weren’t up to the job.

When it comes to Apple, you just know they are watching this state of affairs closely and they may have already decided what direction to take. Indeed, the iPod touch is essentially a netbook, except that it’s saddled with a touch keyboard and tiny screen. I don’t know what Apple has in their test labs, but a grown up version, perhaps a modern-day successor to the eMate 300, might be the perfect solution; that is, if they can deliver one for a reasonably low price.

The top-of-the-line touch retails for $399 with a 32GB Flash drive. That is pretty much in netbook territory already, so you have to wonder how much Apple can add to the price and still keep it competitive. More to the point, how expensive can it be before it encroaches on MacBook territory?

My feeling is that $599 is as far as Apple can go. The question is what room does that give them to expand the “touch” concept into something that more closely resembles an actual note-book computer? Well, certainly larger LCD displays are always costly, but moving from a Flash drive to a standard hard drive can save a bundle. Consider that the iPod Classic, with a 120GB traditional drive, is $249, $150 cheaper than the high-end touch.

Taking that same drive and putting it into a variation of the iPod touch with a larger screen may be quite feasible, and Apple could no doubt bring it into the marketplace at $599, fully outfitted with 1GB of RAM and all the standard Mac goodies, such as iLife. There will not, however, be an internal optical drive, although, as with the MacBook Air, you’ll probably be able to hook up external peripherals via a USB port, perhaps a miniature one to reduce space.

Does that mean that customers will ditch the MacBook in favor of the new Apple netbook? Perhaps to some degree, but a “touch Pro” might attract a whole new class of users who are right now spending their hard-earned money — what little there is of it — on PC netbooks.

Now I realize that Steve Jobs is on record as saying that Apple doesn’t plan to play in the cheap PC sandbox, that they will not produce “junk” simply to grow volume. I respect that decision, but certainly a grown up mobile device based on the iPod touch or even the iPhone won’t be a peace of junk — far from it. As with any Apple product, it’ll be sleek, with a typical understated elegance that will surely look great when you have the pleasure of carrying one around.

As regular readers of this column have seen, the unheralded Mac mini also has a fairly decent share of fans. It would be a mistake to discontinue this product, and I’ve already speculated that a souped up version will make its debut during Philip Schiller’s Macworld Expo keynote next month.

Now it may well be that the new mini will look the same as its predecessor, and simply carry more powerful parts and sell for essentially the same price. That, and a decent ad campaign, ought to be sufficient to move a fair number of units. It’s also quite possible that Apple will slim it down even further, taking it closer in size to the Time Capsule.

It’s almost a certainty that there will be a new wrinkle on the iMac lineup, although most of the changes will no doubt be internal. Some are talking about a four-core processor, along with the higher-grade NVIDIA graphics chips that debuted this fall in the MacBook Pro. A Mini DisplayPort for external monitors seems a given.

Beyond this, there’s a published report now that Apple might provide the Apple TV software for all Macs — at a price. If this is true, would it indicate that the Apple TV itself is going away? Perhaps. Then again, a new Mac mini with similar capabilities would be a worthy replacement, don’t you think?