Why Apple has not (and will not) release a netbook

During a recent conference earnings call, Apple Chief Operating Officer Tim Cook mentioned that if you are interested in a Apple netbook, maybe you should look at a iPhone for now. He mentioned that netbooks today are not something Apple would be interested in having their name on a product.He said that netbook’s keyboards are cramped, and the hardware is junky.
He did say however that they are watching the netbook market closely (did they NOT notice it is selling like hotcakes?) to see how consumers react to it, also saying that Apple has some very interesting products coming down the pipeline.
Yes, I would love to have a Apple netbook, in fact I would probably buy one immediately if they can make it under $600 and have it run Mac OSX (not iPhone OS). The Intel Atom processor is fine (especially of you consider how well some OS’s run on it, like Windows 7), and 2Gig RAM will be sufficient.
The biggest reason you will not find a Apple netbook is the following – it will cannibalize its other models. Think about it – if you make a 10 inch Apple netbook available at between $500 and $800, the market for the baseline Macbook dissapears, and perhaps more importantly, who would buy a Macbook Air then at its ridiculous current asking price?
Shhh – heres a secret: The Macbook Air is just a very expensive netbook. Yes, it has a 13inch screen, but it has a low voltage processor, cramped, non upgradable RAM and a small hard drive (with the option of a SSD). Now what is going to happen to Apple’s notebook poster (pull out of a envelope) child if they make a netbook?
I know iPods and netbooks are not quite the same market, but many people would also consider a very small netbook compared to a iPod Touch. Personally, I would rather spend $600 on a iPhone than a Mac”Net”book, but that is just me. I love that a small computer fits in my pocket and gives all internet needs on a smaller, reactive screen. But face it, $600 is a lot to ask for a phone (even though it is more computer than phone). People who believe this are currently jumping at netbooks.  If you take into account what the average person (not typically the person reading this type of blog) uses on a computer, a netbook is perfect. Email, photo organizing, a little bit of word processing, music and movies. Why on earth would you spend more on a computer?
Maybe they bring one out within a month, but then Apple will do something it has not done in a long time – it will give customers true choice.
(I would actually love Apple to prove me wrong – the sooner the better.)