Walt Mossberg from WSJ and their All things Digital D7 site talks to Steve Ballmer CEO of Microsoft about a number of things including the economy and the new “Bing” decision based search service and netbooks.

D7:  Drinking the Apple Branding  Kool-Aid ???

The netbook exchange between the two is very interesting because we all know that Walt is an Apple fan and probably drinks too much of the Apple “Kool-aid”..

At the end of this talk we learn that Walt Mossberg has been drinking the Apple kool-aid just a little too much and starts to trash Netbooks saying “studies show 52 % of the market won’t buy these devices” . Mr. Ballmer replies and puts these devices into perfect consumer perspective and their market into perfect perspective.

Let's face it Apple is worried about loosing market share to netbooks and that's why they have came out within the Apple community so anti-netbook...  I own two and love them and they do give a better internet experience "without walls" because you can run a browser and flash or whatever you want on them and get the full web experience better than the 1st gen iPod Touch I bought myself. And they run “Flash” which Apple seems to refuse to let on the iPod/iPhone platform even though Adobe says it’s very possible and wanted to do. Apple put up the technical walls against this. Are they afraid Flash would take over this device?? Survey says “YES”..

I am sure that when Apple brings out their tablet or whatever it's going to be, we'll hear how cool it is instead of a "netbook" and say they have "re-defined" netbooks. However the truth is a little different than the “hype” and the reason why they haven’t released such a device is the netbook, (aka portable internet devices) is that netbooks have gained a lot of marketing traction? So why have they gained so much ground with people?? Simply people  need a full browser experience and email and communications that Apple will have an uphill battle selling this concept especially without Adobe’s Flash which is on 98% of browsers out there you can’t have the internet without it. Apple may have finally mis-fired again with their hardware marketing for the first time in five years, and that’s why they are ignoring bringing out a netbook and their execs saying it’s “cheap junk”, even though all their fans want one.. Apple always has to do it “their own way”..

Why is Apple scared of netbooks ??

"Hackintosh" netbooks are already out there in the wild running OSX illegally of course (because it's not on Apple hardware therefore violating DMCA) for under $300 a price point that Apple frowns at because they make no money as a hardware seller at that point without relying on volume marketing (like they have with the iPods and iPhones) and they don't want go volume retail like they do with the iPod. Have you ever wondered why during Steve Jobs annual Apple shareholders meet he talks about the profit made off the iTunes store versus the actual iPod hardware.. Well now you know..

This will cut into market share for their other units and profitability. That’s why they won’t let Mac OSX out their on clone hardware or for sale separately to non Apple sold and created hardware .. Their base really want to see $300 Macs but their investors don’t and it represents selling without profit for them because they are a “hardware” seller unlike Microsoft which is a software company.. It marginalizes their profits on the hardware end of things which investors don't like.. That’s why they are attacking netbooks.

However on the PC side of things  where PCs are often subsidized and sold like commodity hardware this isn't an issue to the whole value proposition. So at the end Walt brings up that 52% of the market won't buy one this is just more Apple Kool-aid. Steve B. is so eloquent on his response. Because it's something Apple can't do without cutting into their other markets..

That’s why they are calling them junk, they work just as nicely as a Mac Mini on pure Intel hardware running at about half the cost when running their own OS X. There aren’t really performance differences (1.6 – 2.x GHz isn’t all that big a leap)..