Microsoft's latest anti-Apple campaign continues to draw fire, a sure sign that the company has finally at least gotten in the game.
The latest critique comes from BusinessWeek's Arik Hesseldahl. Hessedahl points out that the sticker price of the laptop is just the start of the comparison and suggests it is the Windows computer, rather than the Mac, that is loaded with hidden costs.
Microsoft, of course, made the opposite claim with it's "Apple Tax" return, which argued that owning a pair of Macs costs thousands more than two PCs over their lifetime.
And although I was the first to call Microsoft out for its faulty math, I will also say this. The fact that Microsoft was able to get people fired up shows that Microsoft has at least found the right area to focus its energies.
Until now, its 7-month-old Windows advertising campaign has been a rambling affair, shifting quickly from one disparate subject to another, from Seinfeld's shoes to cute little kids. In fact, one of the only things that the campaign's early pieces had in common was the fact that none were the kind of thing that would generate much real discussion on the issues.
That hasn't been the case since Microsoft shifted to its "laptop hunter" ads which focus directly on costs. Whether you agree or disagree with Microsoft's math, we are all finally talking about the relative costs of a Windows PC versus a Mac.
Even Apple has chosen to weigh in on Microsoft's latest claims. In a statement, Apple notes that "millions of people have switched to Mac because they love the security, stability, and power that comes with world-class hardware and amazing software that just works, right out of the box."
It puts its own spin on the price issue.
"A PC is no bargain when it doesn't do what you want," Apple said.
Let the games go on. At a minimum, this should be fun to watch.
Microsoft and technology analyst Roger Kay have made a couple of changes to their charts outlining the "Apple Tax," but the update does little to address broader critiques of their math.
On Monday, Microsoft noted that it has updated both Kay's white paper and the accompanying blog post and chart to reflect the fact that both failed to take into account Apple's latest hardware specifications. The new paper and chart use slightly different models on the PC side.
However, the main points I (and others) made last week regarding Microsoft's bad math haven't changed. Kay's report (and Microsoft's accompanying tax return) still put charges in the Mac column that they fail to account for on the PC side when it comes to both software and services.
Suggesting that users can just bring their old copy of Office and Quicken--and that they won't need to upgrade over the five-year life of their new PC--assumes a lot. It's particularly laughable as Kay and Microsoft add in a charge for updating iLife on the Mac side.
On the services side, Microsoft had a fair point of AppleCare being more than Dell's basic three-year warranty. But then it threw in all kinds of other services, such as in-store training and the optional MobileMe service to again lose credibility.
I mean, really, one could have added (as several readers suggested) the five-year cost of antivirus software only to the PC side as well as a one-time charge for removing crapware from the PC. Personally, I'd recommend antivirus software for both the Mac and the PC, although clearly Windows users have had greater need of it to date.
Microsoft's assault on Apple is continuing, as the software maker is ready with the third in its "Laptop Hunter" series of Windows ads.
This time it's a mom and kid in search of an entertainment notebook. Guess, what? They go with a PC--a Sony this time. And, instead of going to Fry's, they hit Best Buy.
Otherwise, it's pretty much the same thread as the earlier spots, though this time Microsoft once again plays the kid card.
Microsoft had said when it launched the "Lauren" spot that there would be several ads along the same theme.
The new spot comes just as the company has made its latest "Apple Tax" claim online, an argument I argue overstates their case.
I'm sure the new ad will be on TV soon, but here it is via YouTube.
Microsoft puts forth a 'tax return' showing the cost difference between a Windows PC or Mac purchase. However, CNET News' Ina Fried suggests auditors take a close look at the itemized deductions.
(Credit: Microsoft)Microsoft is back touting the "Apple Tax" that it says Mac buyers are paying, this time filling out a fake tax return listing all of what it claims are the extra costs of opting for Windows' leading rival. But I'd argue that this time Microsoft is in danger of being audited.
The document, posted on Microsoft's Windows Blog on Thursday, compares the cost of a PC and Mac purchase, making the case that buyers can save more than $3,000 in buying two Windows PCs as opposed to two Macs. The "tax return" is based on a Microsoft-paid-for white paper (PDF) from technology analyst Roger Kay.
While I don't take issue with Microsoft's basic point that Macs can be more expensive, the assumptions in the white paper and the blog strike me as suspect.
Kay looks at the five-year cost of buying the two machines and making a series of upgrades along the way, as well as buying certain software and services.
The paper assumes we are talking about Windows switchers who already have two licenses to Quicken and Microsoft Office, so Kay adds $70 and $149 for the Mac side and assumes zero cost on the PC side. Even if that were true, that makes the assumption that users would not want to upgrade their software.
But Kay makes a different assessment when it comes to Apple's iLife, which is included in the cost of a new Mac. In his five-year cost analysis, Kay adds a $99 upgrade of iLife in year three, something that is optional, rather than mandatory.
On the services side, Kay adds a three-year warranty to the PC and AppleCare on the Mac side. AppleCare is somewhat more than Dell's warranty. Fair enough.
Then, Kay also includes Apple's one-on-one, in-store consulting service, for which there is no PC parallel. One could even argue that the PC buyer should have to add in a cost for the Geek Squad service that removes crapware from a Windows machine.
The analysis also includes Apple's definitely pricey, but also totally optional MobileMe service. Although Microsoft has its free Windows Live services on the Windows side, cost-conscious Mac users can also use a variety of free services from Google, Yahoo, or even Microsoft itself.
I talked to Roger Kay about the analysis he did, which was commissioned by Microsoft. Kay said he had already shaved from his analysis some of the costs that were presented to him by Microsoft.
"If there's a couple more in there, I wouldn't be surprised," he said, referring to my quibbles. "If I found another $500 (in savings) it wouldn't change things much."
On the hardware side, Microsoft has its clearest case of being cheaper, but again, Kay and Microsoft overplay their hand. For a desktop on the Mac side, Kay goes with Apple's professional Mac Pro desktop. Now, to be fair, there aren't a lot of Mac models to choose from, but the far less costly iMac is really the company's only consumer desktop line.
"You could have chosen another machine," Kay said. But with PCs, he said, you get to shop around. "That particular piece of the economics seems to hold up pretty well."
Microsoft first started touting this idea of an Apple Tax in an interview last October. I'd argue, as I have, that the tax exists, but it is one that the average buyer knowingly pays for what they perceive as the differences between the PC and Mac experiences. In any case, the economic differences, while large, aren't as big as Kay and Microsoft make them out to be in this study.
With Apple's last Macworld keynote speech just hours away, Microsoft is again talking up the idea of an "Apple tax" that people pay when they opt for a Mac over a Windows PC.
It's a concept that Microsoft started touting in the fall. While the words may be fairly new, the melody sounds familiar. Saying that customers pay an added cost when using a rival is a well-worn page from the Microsoft playbook. One need only look back to the anti-Linux "Get the Facts" campaign for another example.
In any case, it is a notion that is likely to stay around, says Windows marketing VP Brad Brooks. In addition to talking up the idea with reporters, Brooks said it may show up in online marketing and potentially even in Microsoft advertisements.
Microsoft did come up with some new charts trying to put hard numbers on the "Apple tax." On the desktop side, Microsoft argues you can save $100, or 16 percent, by going for a Dell Studio Hybrid or HP Pavilion Slimline over a low-end Mac Mini. Microsoft argues that at the mid-range, a buyer can save 25 percent by going for a Dell XPS One instead of a low-end iMac and that the Mac Pro is more than double the cost of a high-end HP desktop.
Microsoft says consumers are paying an Apple tax when they buy a Mac. Click chart for larger version.
(Credit: Microsoft)I made the argument when Microsoft first brought up the concept that, if it is a tax, it is a tax that a growing number of buyers seem willing to pay.
Brooks said on Monday, though, that he expects the weakening economy will limit the number of people willing to pay more for a computer.
"More and more people are going to be scratching their head and say is that a tax I am really willing to pay," he said.
He noted that the tax isn't just about the higher sticker price, but also about the lack of choice that Mac users have. Certainly there are fewer hardware options and the Mac software aisles remain far narrower as well. Brooks also tried to position the Mac as less open, pointing to the iTunes App Store as an example of Apple forcing a "walled garden" on users. Were he to be comparing the iPhone and Windows Mobile, he might arguably have a point, but last I checked developers are free to write whatever program they want for the Mac.
Although I don't buy the idea that Mac users don't know there are cheaper PC options, I think the sorry state of the economy will pose challenges for all PC makers, including Apple. Consumers are clearly going to have to weigh any computer purchase against more basic needs, the prospect of not having a job, etc.
That said, it is unclear who will be hurt more by the economy. Apple is in many ways akin to BMW or another automaker that plays only at the high end of the market. I expect Apple will have a tough time keeping up with recent growth trends. But, as the car market shows, the Fords, GMs, and Hyundais of the world are also taking a huge hit.
I don't want to take this auto analogy too far, either. I don't see Microsoft running to Capitol Hill for a bailout anytime soon. Microsoft makes huge margins on its products. And while I hear layoffs may indeed be in the works, the company doesn't face anywhere near the structural issues of the auto industry (the Google threat notwithstanding).
Brooks would not specifically comment on whether Microsoft has trimmed its PC outlook for 2009, but did say that clearly the whole global economy is far weaker than it was in October, when Microsoft issued its last forecast.
"It continues to be a tough economic time for everybody," Brooks said. "We continue to see that our customers are suffering out there.
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