Daniel Eran Dilger
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Microsoft’s anti-Mac pricing campaign takes to the web

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Prince McLean, AppleInsider
In a new series of web ads, Microsoft portrays two slot machines, one ringing up a Mac with bits of garbage, and the other presenting a cheaper generic PC along with the Zune, Xbox 360, and other things buyers could get with the money they’d save with the PC.

Microsoft’s anti-Mac pricing campaign takes to the web
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The banner ads are part of Microsoft’s new ad campaign promoting cheap hardware, which includes new TV spots contrasting Macs with generic PCs entirely on price. There’s not much mention of why the generic PCs are so much cheaper than the Macs they are contrasted with, nor any mention of software expenses.

Microsoft hardware?

Microsoft’s new focus on cheap hardware prices is particularly interesting given the fact that the company has been unable to profitably market its own hardware devices outside of its Microsoft-branded keyboards and mice that it bundles with many new PCs as part of its Windows software licensing.

The company has spent billions on the Xbox 360, which is even now only barely clearing a hardware profit before considering the hardware repairs that have plagued the game console. With the Zune, Microsoft has been completely unable to create any impact within the market for MP3 players dominated by Apple’s iPod.

Selling software with hardware, and vice versa

Microsoft is a software-centric company. It has long sold its software using cheap hardware. However, Microsoft’s software isn’t cheap. Retail upgrades for Windows are nearly twice as expensive as Mac OS X, and infinitely more expensive than Linux, which can be obtained for free.

While the need for software compatibility with Windows has long rendered Microsoft’s operating system monopoly untouchable, the emergence of new computers that rely more on the web and email have broken that hold. Ubuntu markets a low cost distribution of Linux to PC makers exploiting that new market.

Microsoft Ad
Apple has added sophisticated music, photo, and movie editing software to its web and email offerings, positioning the company’s Macs as not just a suitable alternative to Windows PCs, but also more useful and valuable option right out of the box. That pits Apple’s business model of selling hardware with cheap software directly opposite to Microsoft’s business of selling its software on cheap hardware.
Microsoft Ad

What happened to “Total Cost of Ownership”?

Macs not only bundle in free software missing on the PC side, but also offer personalized support in Apple’s retail stores, which is free to those who don’t mind standing around waiting for an available genius, and very cheap to users who want a regular One-on-One membership that allows them to visit the stores for virtually unlimited advice and training sessions.

If Microsoft portrayed the software and support expenses of generic Windows PCs into its slot machine graphics, the results would be less flattering.

Microsoft Ad

  • PXT

    People that perceive the value of Macs will not be affected by this advertising. Furthermore, Apple benefits by people becoming curious about Macs, which this Microsoft ad inadvertently achieves for them.

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  • adamk359

    This pretty much sums up my beliefs about the two OS’s. The more bloated and useless Windows becomes, the more expensive it is. OS X, on the other hand, remains at the same price every time and evolves and brings in new technologies rather than Microsoft’s way of creating hackneyed solutions to problems plaguing Windows for ages and labeling them as new technologies. OS X and Macs come with simple, useful “lifestyle” software unlike Windows that ships with half-baked software solutions that try to do the same things.

    Lots of Windows fanboys have said that with Macs you have to upgrade every time they come out with a new model and that costs big bucks. The so-called “Apple Tax”. It’s just not true though. I can keep my mid-2007 second gen MacBook and just upgrade the software till my MacBook is no longer supported…and I have a feeling that will be many years from now. With Windows it’s almost the exact opposite. You bought a cheap Windows PC with XP a few years ago…but it’s not exactly guaranteed to be able to run Vista. It may run Windows 7 due to code/bloat slimming, but even that has steep requirements to get the full “experience”. The truth is is that the real tax is coming from Microsoft. It’s like a promotion though: Build a cheap PC and get a bloated, useless operating system for $300! Plays games too! Woot!

  • iDarbert

    This ad targets the typical mentality of the average consumer.
    Most people don’t care about the quality of their purchases or the TCO, they believe that if they spend less to make the purchase it’s a better deal, and if they are able to the specs.

    As for the ad itself, I don’t think it does anything; while Apple ads somehow try to break popular beliefs about the Mac (believe it or not some people still think there is no Microsfot Office for Mac – but that’s nothing: somebody actually asked me if my Mac was able to display jpegs) Microsoft ads seem to focus on telling people what they already know: Macs are more expensive.

    The ad fails in so many ways it’s not even funny: for example nowhere in the campaign is the message that Macs are overpriced (which is what many people believe), it’s just stated that they are more expensive.
    One could say it’s a clever way to exploit the current state of the economy but I think it’s more of a miss.

    Another problem with the compaign is that while the phrase “I’m not cool enough to be a Mac person” (a actress is not cool enough, seriously?) the campaign is also implying that Macs are cool.

  • dpaterso

    GNU/Linux deserves more than a sentence in this discussion. It seems Microsoft is making an argument that favours something like Ubuntu OS which I believe is a perfectly satisfactory computing experience for many who have never heard of it.

  • http://bkpfd.org qka

    “Macs … also offer personalized support in Apple’s retail stores, which is free to those who don’t mind standing around waiting for an available genius”

    Or are smart enough to go on the web an make an appointment. I never go to the Apple Store expecting to just walk in and talk to a genius.

  • osp

    Hello Daniel,

    wonderful comment :-)
    Isn’t it great, Microsoft positions itself at the very low cost market segment. Microsoft doesn’t associate itself with quality. At least they are honest. That leaves a lot of potential switchers for Apple.

  • beetle

    Does anyone have a direct link to the ad with a live “Spin Again” button? NY Times seems to have dropped it, and I cannot find it on the µ$ site…

  • PXT

    One thing the ad’s images did get right is that the Mac has reached its user desktop while the PC is still starting up !

  • enzos

    It’s a gamble for M$. Think about it: for the ad to be successful it has to influence more than nine out of ten buyers that cheap is more important than quality, otherwise the ad will increase Mac sales (at 10% of market) by drawing attention to the platform. I could imagine two out three or even four out of five Americans thinking like the ranga (cheapskates) – but not nine out of ten!