As Amazon reportedly prepares to release a grown-up version of its Kindle book reader to handle magazines and newspapers, you have to wonder just how Apple might enter this arena. Consider there’s already a version of Amazon’s e-book software available on the iPhone, although we’re talking about a screen size that’s not particularly suitable for anything larger than a book.

Looking at the other end of the equation, it’s fair to say that the traditional publishing industry appears to be on life support. Sure, people read books, but magazines and newspapers get slimmer and slimmer as their owners fight for the dwindling pool of potential advertisers.

Some suggest that making a publisher’s Web-based content free was a bad business decision. Why should people pay for stuff they can see without cost on their Macs and PCs — and smartphones of course? Some newspapers, such as the Wall Street Journal, charge extra to view most online content, but the wisdom of that strategy remains uncertain. When Rupert Murdoch’s News Corporation bought the financial paper, some suggested he might make abandon the subscription plan, but that hasn’t happened, although there is a discount program that gives you both the printed edition and the online version for a single price.

That’s just the preamble. Ahead of Amazon’s announcement, speculation has it that the larger Kindle will still be black and white, but it will allow you to view larger pages at their original size. There’s a question, however, whether ads will be allowed, and if they are still prohibited by Amazon, publishers will have to charge extra for subscriptions. Indeed, I have to wonder whether it might be a better idea to offer the publications with all ads intact, and just give them away to owners of e-book readers.

So where does Apple get involved? Well, it’s true that netbook sales are growing, still, by leaps and bounds. Maybe there is some level of buyer’s remorse involved, but that hasn’t stopped the apparent success of such products. While Apple doesn’t like to be dragged kicking and screaming into a market segment, it’s becoming more and more evident that the may have no choice with netbooks.

No, it won’t be a shrunken note-book. That isn’t Apple’s cup of tea. As you’ve heard from this site and our tech radio show, we’re betting on an enlarged iPhone, perhaps with a tablet-type screen. If Apple can keep it light and exceptionally thin, it would become a sensational gaming platform too, but that’s an area way outside of my areas of expertise, since I’m not a gamer.

When it comes to reading standard published content, I wonder just how Apple’s expertise in graphics display will come into play. Whatever capabilities they incorporate now, though, won’t be the result of their ongoing acquisition of personnel skilled at graphic chip design. It will probably take another year or two for the fruits of those endeavors to appear in retail products.

Now where the Kindle falls down on the job is its relatively slow page rendering. Even the second-generation model is said to be only slightly better, and it remains to be seen how a larger version will fare, although tech pundits expect it’ll still be black and white. Meantime, an Apple netbook-style device that excels at document reading would probably have to provide simple navigation, speedy page rendering and, of course, full color. That way, you could view the digital version of a magazine and newspaper with full fidelity. It would also be nice to see a basic PDF printing capability to allow you to output those pages, if that’s what you want. Of course, it would defeat the purpose of going all-electronic, but I can see (without further explanation) where a real printed page might still be more convenient than an digital gadget with a large screen, however thin it might be.

Now ultimately the new OLED display technology, which allows for a screen that’s actually flexible, might be a terrific solution for the ultimate netbook, particularly when it serves as an e-book reader. On the other hand, OLED is still in its infancy and the displays are costly. It wouldn’t make a whole lot of sense from a commercial standpoint for Apple to sell a netbook with an OLED screen for upwards of $1,500 or perhaps more, although perhaps a special version might suit as a technology demonstration. Compare that to the original introduction, for approximately $1,000, of the first solid state drive as an option on the MacBook Air. Prices have come down quite a bit since then, though they are still rather high compared to traditional mechanical hard drives.

But if Apple’s netbook was offered at the expected $599 or $699 level, with a flexible OLED model as an option for those who escaped financial ruin in the current crisis, that might be a great way to enter a new market. If the folks who build OLED displays continue to improve the technology, it may reach a point in a few years where it will be competitive with LCD, and Apple will be on the cutting edge.

Do I think this is the way it’ll play out? Actually, to a fair degree, yes. Maybe not all the ingredients I’ve suggested, but I think that, unless the netbook craze fizzles out real fast, Apple will simply have to get involved.

Well, folks, get ready to suspend your disbelief. Microsoft has done it again. There’s a new ad campaign in which someone is given money and asked to go into a consumer electronics store and buy a note-book. Once again, Microsoft demonstrates that they require suspension of disbelief to get their point across.

In this particular instance, the victim of this wrongheaded scheme is tasked with finding the right product for two grand. The entry-level MacBook Pro, which happens to list for that price, is rejected because it only has 2GB of RAM, whereas the HP model selected instead has 4GB.

Alas, what Microsoft doesn’t show you is that the Mac note-book has a speedier processor and uses faster memory than the HP, so it is in fact a better buy. No doubt equipping the latter with a heftier processor would raise its purchase price to the point where it is similar to the MacBook if it were updated with same memory complement. But that’s not something Microsoft wants you to know.

The other peculiar element to this campaign is the fact that the selected PCs are inevitably from HP. That sounds, to me, far too coincidental, since the consumer electronics outlets visited all have several brands from which to select. More to the point, HP is not known as a value brand. So what sort of collusion is going on here anyway? This is far too suspicious to be simply coincidental.

Or does it mean that HP is, in fact, paying a portion of the bill for this campaign? I’m curious. Aren’t you?

Story continued in this week’s Tech Night Owl Newsletter.

One of the downsides of a company as secretive as Apple is that customers and the media will feel compelled to speculate about new products. Some of that speculation will be true, some of it not, but it’s usually hard to know in advance which predictions will pan out except through logic, reason and a lots of good luck.

The biggest downside of all is that, if the predictions all point to a single product or service, expectations increase. Folks come to believe such a thing to come from Apple in the near future. If the product is an upgrade to one of the existing lines, it creates the annoying prospect that sales will dip temporarily as customers wait for a revision.

If the revision doesn’t arrive, then Apple suffers from lost revenue. This happened to some degree after the original migration to Intel processors was announced during the WWDC in 2005. In one fell swoop, all of Apple’s Mac hardware was rendered obsolete, kaput. Originally, the transition was expected to be completed in 2007. Yes, that’s what they said back then.

Now it turned out that the sales impact was, according to Apple, not so severe, and they managed to get most of the Intel-based Macs out beginning in January 2006, months ahead of schedule. The transition was over by the summer of that year with the introduction of the original Mac Pro.

For the most part, the new x86 Macs were actually quite reliable. The basic designs weren’t altered that much, except in a few cases, beyond reconfiguring the internals to accommodate new logic boards. However, there were some notable early adopter issues, such as hot-running MacBooks and MacBook Pros. With modifications to the cooling system and basic design revisions, today’s Mac note-book runs noticeably cooler, by the way.

I can see, in retrospect, a dual-edge sword here. Apple’s vaunted reputation for superb hardware reliability was diminished somewhat because of the early teething pains on the Intel-based note-books. If you look at the surveys published by Consumer Reports, for example, you’ll see that other note-book makers match Apple for the most part, and a few exceed them.

That was then and this is now.

Ahead of the WWDC and the fall product introductions, which would generally involve new versions of the iPod, you can see where tension is building.

We know, because Apple said so, that they are working hard on iPhone 3.0. We also know a few additional details because some of the developers who have worked with the new firmware and programming tools have evidently breeched their confidentiality agreements to let us in on the ongoing status. The final release will happen this summer, no doubt along with a new lineup of iPhones.

What form will the new iPhones take? Well, there are published reports that Apple is hiring graphic chip designers, perhaps with the expectation of building new embedded hardware for the iPhone and iPod. However, hiring people doesn’t guarantee immediate results. Indeed, it make take another year or two for the products emerging from these design initiatives to go into production. Meantime, Apple will continue to rely on third party manufacturers for their parts, which basically means that other companies can build gear with the same components.

However, just because the makeup of these gadgets can be duplicated doesn’t mean the software is the same, and that’s Apple’s huge advantage. In addition to the new iPhone software, interest is growing in the status of Snow Leopard. It is widely expected that there will be a full demonstration at the WWDC, but that the actual release date may be a few months later, but still ahead of the release to manufacturing of Microsoft Windows 7.

Even though Apple claims Snow Leopard will have mostly internal changes compared to the standard version of Leopard, and the promise of much greater performance and reliability, some still suggest that major feature visible changes might still happen. A new user interface, closer in concept to iTunes, might appear.

The problem with raising expectations for Snow Leopard is that, if it ends up being little more than Apple has stated so far, a speed-up release that streamlines the plumbing, will you be disappointed? I suppose you would if the price of admission remains at the standard $129. However, if it is given away with a modest fee, sufficient to meet accounting regulations, that may make a huge difference in its potential uptake. I’ve been thinking in terms of a $19 fee, but I suppose even $49 wouldn’t seem excessive for most of you.

Apple could present a cheap Snow Leopard as a thank you for loyal Mac users, and also as a way to get as many of you to upgrade as possible. Although it will likely be limited to owners of Intel-based Macs, having the vast majority of the user base on a single operating system will make it easier for Apple to continue to test and improve Mac OS X. It’ll also make it easier for developers to take advantage of the new features.

It’ll also make it easier for tech writers like me, since we’ll have fewer operating systems to write about. Then again, I haven’t said anything about Tiger in months, and 10.5 discussion could also vanish in the haze before long. Meantime, it’s also possible that Apple will still amaze us in the months to come, so stay tuned.

All right, here’s what we know: Apple has loads of gear undergoing testing at their corporate campus. We don’t know what they’re working on, but we can make educated guesses and if a product passes muster, we might even see it in production eventually.

That surely includes the rumored netbook. Apple says nay, but it’s hard to separate the marketing from the reality. Indeed, when and if they do release an gadget that fits into this category, the words “net” or “book” will positively not be part of the name. So, you see, it won’t be a netbook, at least by that measure.

Now don’t assume that Apple responds well to pressure. Just because the media says it’ll happen doesn’t make it so. But if Apple feels they can make a sizable dent into a market on a long-term basis — and not just for a few months — you can see how they’d be tempted.

Now the consensus about the possible Apple netbook — or whatever it’ll be called — is that it won’t be a shrunken note-book. That is the strategy PC makers have followed, since it doesn’t require a whole lot of design expertise to produce one. Just make the case and the screen smaller, and fill it with lower-power components.

Now Apple has actually already had a netbook in its lineup, more or less. Back in the mid-1990s, they built a grown-up Newton message pad with a built-in keyboard called the eMate 300. Not that it did very well, but I recall that my son actually got one on loan at the elementary school he attended at the time. Since there wasn’t much in the way of software to run on it, it sort of sat there doing nothing.

All Apple really has to do, at least for starters, is to take the same concept into the 21st century. So we’re talking here about a grown up version of a product that, in part, is a descendant of the Newton, and that’s the iPhone.

The media’s would-be designers, therefore, imagine that the Apple netbook would be based on the iPhone operating system. The advantage is that it would already have a large installed basis of customers using products with the iPhone operating system, and an application ecosystem with over 35,000 choices. Sure, something might have to be done to scale up software to work on a larger screen, but it’s possible that the built-in system frameworks were already designed to accommodate such changes. It wouldn’t make sense to assume that all iPhone-derived products would be expected to have the same display size.

The next question is whether such an animal would have a built-in keyboard. The problem there is that placing a full-sized keyboard on a such a product might be rather difficult. It may be that the netbook would more closely resemble a tablet or notepad. Like its smaller siblings, this iPad (or whatever you wish to call it) would also employ a virtual keyboard. However, it might make sense to allow you to hook up a standard keyboard via Bluetooth. That’s something you can’t do with an iPhone or iPod touch, but it would seem rather awkward to run a regular keyboard on such a small device. But something with a nine or ten inch screen might be a better fit for external input devices.

I wouldn’t presume to guess what the final form might take, though I would imagine it being mostly screen and otherwise not dissimilar from an iPhone. No doubt it would also incorporate a telephone application of some sort, but you’d use the built-in speaker and mic or a headset to make calls. Feel free, gentle reader, to flesh out the remaining features of this device.

However, I am certain it’ll be incredibly thin and light and likely weigh less than one pound fully outfitted. More to the point, it might also be the ultimate e-book reader. So far, that’s a market where companies have tried and failed, though Amazon’s Kindle comes close. Except it’s black and white, and a true e-book product ought to include color as well, so you could perhaps read your favorite magazines on it too.

The larger screen, and no doubt more powerful processors, including the graphics chips, might make for one incredible gaming platform. Already the major game software publishers are jumping on the iPhone bandwagon, and imagine having something with, say, two or three times the horsepower, and a wide range of external controllers. This is getting real interesting, though not to me, since I’m not into games. But I can surely see the potential.

So what would this beast cost? Well, the media designers are suggesting that, since it’ll have telephone and Internet capabilities, Apple might set up a subsidy deal with its iPhone partners, so you could buy one at a discount. Otherwise, the price might come real close to that of a MacBook, and that would seem excessive for a netbook.

No, I’m not going to try my hand at drawing an iPad. I’m a writer not a graphic artist. Besides, whatever I do come up with, I’m sure Apple can do a whole lot better.

In any case, is this the basic form of Apple’s alleged netbook? Well, it mostly represents the media’s version. Apple no doubt has other ideas, and they may still amaze us with the end result. That is, if they decide to even bother.