Presumably, he means that netbook sales would cannibalize high end laptop sales. But that's doubtful. In order to compete with other netbooks, a hypothetical A

Presumably, he means that netbook sales would cannibalize high end laptop sales. But that's doubtful. In order to compete with other netbooks, a hypothetical Apple netbook would necessarily be the least expensive Mac. This would definitely cannibalize their sale of better models to first-time customers, who currently constitute a significant portion of Apple's Mac sales (as much as 50% from their retail stores). It comes down to a question which set of customers is going to be more profitable: customers looking for "a cheap laptop" or customers looking for "an Apple computer". All else being equal, I think it's obvious that the latter is more desirable. The mistake that many in the press have made is assuming that these customers are in short supply and that Apple will begin struggling to find them Real Soon Now, but this hasn't turned out to be the case. There may be more of the former kind, but would Apple really be able to capture two, three, four times as many of them as they are their current customers?