Now that Steve Jobs has bowed out of the annual (and possibly the last) Macworld Conference & Expo this week in San Francisco, there’s considerably less likelihood of any interesting, much less compelling, announcements from Apple at the event.

Too bad in a way, because lots of folks were hoping that Apple might announce its arrival, albeit late, to the netbook party.

“Late” in this case is no huge drawback. The market for netbooks, defined here as ultraportable but still full-functioning personal computers, has barely moved out of infancy. The early models from industry leaders like Asus have been solid demonstrations of what’s coming, and for some uses they are just fine.

Jobs has famously said Apple (AAPL) can’t make a netbook that isn’t crap, at least at the price point the market currently supports. But Apple doesn’t sell its other computers at the prices PC makers charge in most cases. Its excellent software and reasonably solid hardware have always earned a premium.

Apple could and should take the netbook genre forward in ways that will make these devices utterly compelling. To see where the company should go, we only need to look back a decade–to Apple’s Message Pad, a.k.a. the Newton–and then extrapolate forward in fairly obvious ways.

The Newton was far, far ahead of its time: essentially a large-screen PDA that came bundled with useful applications and boasted handwriting recognition. Unfortunately, the early versions of the handwriting feature were so clumsy, sparking ridicule that included a hilarious send-up in the Doonesbury comic strip, that the device’s reputation scarcely improved even though the software did.

For reasons that remain mysterious, Apple killed the project in 1998. I suspect (with absolutely no proof) that this may have had something to do with the company’s rapprochement with Microsoft the previous year, when Microsoft helped save Apple by agreeing to keep selling its Office software for the Mac.

The Newton technology and its progeny were absorbed into Apple, and pieces have emerged in various ways over the years. But the fundamental idea of the Newton was a smart one, and today’s processing power, storage, connectivity and software give it more value than ever.

The rumor mill has Apple offering up a larger-screen iPod Touch sometime this year. If that’s all it is, then Apple will have missed a big opportunity.

What might an Apple netbook–let’s call it the NewBook (not the NewtBook, which would make people think of Newt Gingrich)–look like? And what might we do with it? The possibilities dazzle.

First on the basic hardware front, the Apple NewBook would use Intel’s Atom processor or one of the emerging competitors from AMD and other chip companies. It would come with enough RAM and flash memory to be a reasonably serious computer, running OS X, and would boast a real keyboard plus a variety of standard ports. A built-in still and video camera, plus a microphone, would be highly useful as well.

Second, the larger screen would offer more than the touch screen in the iPhone and newer Mac laptops. Beyond using finger-driven gestures to navigate, it would have tablet features, including handwriting recognition, annotation and much more. (Several PC makers are expected to announce tablet-netbooks at this week’s Consumer Electronics Show in Las Vegas.)

Third, given that that our data increasingly live in the cloud and on home and office servers, the NewBook would contain several radios: fast Wi-Fi, of course, but also GPS and one or more connections to high-speed 3G mobile networks. (Apple being its typical control-freak self, unfortunately, the 3G would likely be limited to one carrier.)

What could we (and Apple) do with such a device? Lots.

Beyond standard personal computing, Apple’s netbook could be an excellent e-book. I have an Amazon Kindle, which I like a great deal (disclosure: I’m an Amazon shareholder), but Apple is in a perfect position to grab a major share of this quickly growing market. The company could even sell books through the iTunes Music Store, something it could do now given that the iPhone and iPod Touch can be used as adequate (though the screen’s too small) e-books today.

The Apple NewBook could also emerge as an ideal personal entertainment system and solid gaming device. The iPhone is fine for watching some kinds of video on airplanes, but I’d welcome a somewhat larger screen. For gamers, the iPhone is already becoming an intriguing platform, but the NewBook’s larger size and processing power would undoubtedly spark an aftermarket for hardware controllers and other input tools as well as great software.

I’m describing the kind of machine I’d gladly carry on short trips in lieu of my MacBook Pro, which I use at home and at the office. But before I adopted it for that kind of use, I’d need dead-easy, robust and absolutely reliable synchronization with the 15-inch laptop and whatever data I choose to keep in the cloud. Given the mess Apple has made of Mobile Me, my money would be on third-party developers.

There’s one thing I’d hope Apple would not do: lock down the netbook the way it’s locked down the iPhone and iPod Touch. By all means, Apple could and should use the iTunes store to sell third-party applications. But by no means should it force customers to jump through hoops to jailbreak the devices so they can use what they bought the way they want to use it.

Apple was late to the MP3 party, but it beat everyone else with a system that changed the game. Could we see a similar breakthrough with its netbook?

There’s nothing new about mobile computing. In the early ’90s, the industry promised a range of devices, from tablets to mini-laptops to smaller handheld PDAs. Apple’s (AAPL) pioneering offering, the 1993 Newton Message Pad, sought to deliver a sophisticated new operating system and development environment running a unique new platform based upon low-power, ARM RISC processors the company co-developed with Acorn.

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This weekend in San Francisco, the second annual iPhoneDevCamp 2 is underway. Whereas the first confab focused primarily on Web applications, this one has a definite native application flavor, thanks in large part to the fact that the iPhone software development kit (SDK) is out of beta and now available for developers.

When the iPhone was released in June, many developers were disappointed by the absence of an SDK for writing third-party applications on day one.

At D5, Steve Jobs explained to Walt Mossberg that Apple (AAPL) first needed to iron out some security issues before they would open up the device to outside developers:

We would like to solve this problem and if you could just be a little more patient with us, we’ll do it.”

–Steve Jobs at D5 on the availability of an iPhone SDK

Fast-forward to the first quarter of 2008, when Apple made good on its promise by releasing an early version of the iPhone SDK. The fruits of the patient developers’ labor was evident at the launch of the iTunes App Store, where 500 free or commercial applications were available to download onto the new iPhone 3G or the original iPhones running iPhone OS 2.0.

No longer were iPhone users confined to using Web applications running in Mobile Safari or resorting to jailbreaking their devices to use third-party programs.

The App Store made it dead simple for every iPhone user to duel their friends with PhoneSaber or satisfy their Dance Dance Revolution/Guitar Hero/Rock Band craving with Tap Tap Revenge, a game which recently celebrated its one millionth download.

At iPhoneDevCamp this year, there’s a greater and more palpable sense of excitement in the air than last year, and it’s reminding me of the time when I was writing applications for another Apple handheld product: the Newton.

While the green device from Apple was not a commercial success–it was surpassed in sales and popularity by the less-capable, yet smaller and more convenient Palm Pilot–the Newton nevertheless pioneered many features we now see perfected in the iPhone.

Fourteen years ago, the Newton could fax, send email and receive pages; the iPhone is a communications powerhouse with 3G/EDGE/Wi-Fi/Bluetooth.

Newton’s handwriting recognition was dramatically improved with Newton OS 2.0 in 1995; the iPhone has fantastic Chinese and Japanese character recognition.

Finally, the Newton promised a day when users everywhere had their own personal digital assistants in their pockets; today, millions of people have chosen their phone to be an iPhone.

Despite leading the Newton protest at Apple Computer in 1998, I admit that Jobs was right to cancel the Newton. He made the correct decision to focus the company’s efforts on Mac OS, and it’s paid off.

The iPhone, after all, is running a version of the same operating system powering today’s Macs. The release of the initial iPhone raised the bar significantly for mobile users tired of using the same-old devices from Palm, Microsoft, and Symbian.

At iPhoneDevCamp 2, the bar is rising even higher for native third-party applications. If you were excited about the first 1,000 apps, wait till you see what comes out this weekend!

Below are photos from Friday’s welcome reception at iPhoneDevCamp 2. For more information, visit the iPhoneDevCamp 2 web site.

iPhoneDevCamp2 Friday Night Photos

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