Microsoft is Right About the Cost of Macs
There are apologists galore on both sides of this argument. The problem with Microsoft vs. Apple arguments is that they are too often emotional. There is such a long history between the two companies that leaves much to be desired. And even though Bill Gates and Steve Jobs appeared to make up during their WSJ interview a year or so ago (a must see) us Mac users are still, well, pissed.
Mac users are pissed at their very core because the understand the one single truth PC users do not understand. And that is that Windows users are ostensibly using a Mac. That same feeling some of us had when we fell in love with the first Mac is felt, in a much watered down form, by those Windows users excited about the power of a GUI interface.
And after-all, this is what this is all about, really. It is about a mouse, a keyboard, and a screen that has the metaphor of What You See Is What You Get. It is what lit up Job's passion when he visited Xerox, it is what lit us up when we first used a Mac, and it is what Window's users get. The reaction to the GUI interface is almost instinctive.
Now, there are many different flavors of this interface and Apple Matters readers know that the Macintosh version of this interface is better. OS X is more stable, more powerful and more flexible than Vista (although Windows 7 is creeping up).
But the differences have become inherently subtle. The original Macintosh revolutionized many industries, but particularly graphic design. With a DOS prompt you couldn't design a book cover, with a Mac and PageMaker you could. But, and this is important, all the tasks that you can now do on a Mac you can do on Windows. Maybe not as elegantly, or as powerfully (although many would argue even that point) but you still can.
Which leads us to the question in front of us, why are Macs more expensive? If it isn't the operating system that is so different to Windows then maybe the hardware is a hint?
In the days of PowerPC, when Apple sold us the tired and incorrect story that the PowerPC processor was better we could have pointed towards the processor. But that is no longer the case. Same with SSCI, and firewire. If you look at a Dell today and a Macbook you will notice they have:
- the same processor
- the same ram
- the same hard drive
- the same video card
- the same screen
So what are we left with? Well, nothing.
This is where folks tend to get riled up. Build quality, and the genius bar (forget the fact that you shouldn't be there in the first place, it means something is wrong) are cited as reasons why the Mac is more expensive.
But I say BS. If all these different companies are able to make a laptop that sells for $500 then Apple should. To make this point unbelievable clear lets compare a Dell to a MacBook:
Dell Inspiron 15 ($554)
- Intel Core 2 Duo T6400 (2.00GHz/800Mhz FSB/2MB cache)
- 3 GB Ram
- 250GB SATA HD @5400 rpm
- 4 Cell Battery
- 15.6 inch screen 1366x768
MacBook (the white cheaper one, $999)
- Intel Core 2 Duo, 1066MHz frontside bus, 3MB shared L2 cache
- 2GB 667MHz DDR2 SDRAM - 2x1GB
- 120GB Serial ATA Drive @ 5400 rpm
- 13.3 inch screen 1280 x 800
Now apologists will get very detail-oriented. They will note that the Dell does not include Bluetooth, has a smaller battery, and that the processor has slightly more frontside power on the Macbook. Yes, but the Dell has 1GB more ram and a hard drive over twice the size and a bigger screen. Of course Windows users will have to buy an Anti-virus tool (around 30-40 bucks) and don't have iLife (iTunes is free, Picassa is as good as iPhoto and free, not sure about iMovie).
The point here is that for machines with remarkably similar specs the MacBook is almost double the price.
And there are countless other examples of this up and down the Apple product line, whether it is XServes, Macbook Pro's, Mini's, etc. The whole Apple computing line is over-priced by at least 33%.
Unlike Microsoft I am not trying to attack Apple, or drive people to buy more PCs. I love Apple products and it is because of this I want to drive home this point. As the recession increases, and Windows 7 comes out these differences are going to be more and more glaring. At some point the extra revenue Apple makes with higher margins will get lost in reduced sales.
I have no doubt that Apple is working very hard right now on a NetBook that they may think is a solution to this problem. But it isn't. As long as I can very easily find machines that cost far less across Apple's product line that have similar hardware Apple has a big problem. And relying on the allure of OS X isn't going to cut it much longer (and I won't even get into the Hackintosh phenomenon here).
Apple, take a long hard look at your product line, and tell me why a Macbook costs almost double the equivalent specced PC product?
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Chris Howard said:
“But on the other hand, clones mean greater market share for OS X, including better access to enterprise.”
What make you think that Steve Jobs wants either of those things? I get the feeling that Jobs pursues a dream of excellence—of craftsmanship, so he has turned his back on pursing market share directly. And the Enterprise market is too rigidly bureaucratic to appeal to Jobs egalitarian soul.
Jobs has said that Microsoft creates third rate products and services. Jobs, in trying to turn out what he thinks is the best, has increased Apple’s market share. He has also made incredible amounts of money. But, those increases are a result of Steve Jobs relentlessly pursuing his good taste. Thankfully, many people like Steve jobs definition of good taste. That is why Apple’s sales have been growing at over 30% a year. Apple doen’t need to grow any faster; there are problems when companies grow too rapidly. They lose sight of what makes them a success.
“Which is better for Apple? It’s hard to know for sure. “
Apple seems to be doing well by charting an independent course while ignoring the pundit’s demands for them to be like Microsoft. Microsoft’s market share seems all downhill from here. Microsoft was always a marketing company, not a technology company, not a consumer company.
“We can’t look at the previous experience of clones, because they were launched from a position of desperation. “
The Clone era was playing into Microsoft’s strengths and on Microsoft’s battle ground. It was quite foolish.
Apple, because it had to develop the Mac OS, had to demand a higher price for its hardware. The sales price for the Mac OS was never enough to make up for the loss of its hardware profits. Apple’s clone partners eat Apple alive because they could compete on just the hardware level.
“Clones now we be from a position of strength. Clones then were from many manufacturers. This time Apple would limit it to one or two. Imagine OS X on HPs, Sonys and Dells.”
I disagree. Apple’s strength is in its pursuit of excellence and in over coming its vulnerabilities.
Apple is on the best hardware platform, with Intel CPU and NVedia GPU’s. Apple’s upcoming OS, Snow Leopard, due out in two to five months, will rock. It will be two to three times faster on the same hardware. And the fastest and most trouble free implementation of Windows Vista in the world is on Mac hardware. Wintel is being left in the dust. To hell with cheap, the Mac will be FAST.
The computer marketplace will soon be entering a sea change. The Netbooks are an implementation of tomorrow’s technology in yesterday’s laptop form; cloud computing will be just a facet of that change.
The hardware, five years from now, will be unlike anything which has gone before. We have only a glimmer of what will come. The system which is the most flexible, interactive and complete will win out. The HP’s, the Sony’s and the Dell’s may make components for that coming change or they could vanish from the scene.
This sea change will be chaotic and Microsoft’s monopoly will be imperiled by it. Linux could win out over Microsoft, of all things. Why? Because most computers in the world are not operated by users. They are cash registers, data key entry devises, etc which use old Wintel computers running Windows 2000 or XP. Microsoft expands that 90% market share figure by including set top boxes, PDA’s and Phones running some labeled Windows software. All that is about to change.
The economics are such that a third of Microsoft’s computer market share could be replaced by cheap, single function devises run by Linux. Apple won’t be hurt by this, because they never sold into that market.
“What does it do to MS’s latest ads?
Lauren, Giampaolo and the kid would then say, “Well, this is the hardware I want, and this is the price, but can I get OS X with that?””
What Microsoft is doing is pointing out that Apple does not market to the low end, razor thin profit margin, e-waste computers. MS is assuming that today’s poor economy will force consumers to choose based on price.
I think this is foolish on a number of levels. First, you never want advertise your competition, not even acknowledge their existence. People who never considered a Mac before might start to look at them. Second, Apple has very good word of mouth. Smart people will ask their friend’s about the Macintosh. The reply could be, “Sure, Mac’s cost a bit more, but they are cute, sexy and are easy to use. They do everything.” How could MS fight that?
I don’t believe that Microsoft’s ads are effecting Apple’s upper half of the consumer market while they do acquaint the lower half of Apple’s existence.
Microsoft used to be much better at producing computer Fear, Uncertainty and Doubt. All Microsoft can knock, now, is Price? Apple can counter argue with, “Yeah, but you get good value for your money.” A discriminating shopper knows that buying quality leads to increased satisfaction for a longer time. Paying half again more makes products last twice as long. It’s good economics to buy quality.
“All three of MS’s heroes so far didn’t buy their PC because it had Windows on it. All of them were quite prepared to buy Macs.”
Those were fables, Chris, it was a forgone conclusion that a HP computer would be chosen. It was evident in the buyer’s intent to purchase the biggest of everything, while ignoring everything else.
It’s the old checklist argument. The checklist has only things on it which bias the buyer toward a PC. Quality, durability and ease of use are never even considered. The Macintosh is sold on intangibles which will never be on that check list. The buyers had no experience on a Mac, so how could they know what was important? I have extensive experience on both, so I would never buy Wintel or cheap. It never pays to do so.
“So MS are actually proving Windows is not part of the equation! How insane of them!”
The ads make the assumption that every computer has Windows on it, so there is no difference, but price. That is bizarre, unrealistic and prejudicial, but it is not insane. Microsoft wants to keep its monopoly. One way of doing that is to pretend that it has no competition. The Ads were all about hardware, so Apple had to lose.
“So MS’s ads demonstrate ppl not wanting to pay Apple’s price for hardware, but being open to OS X.”
It was pure ignorance. The buyers were gulls. They thought they were getting things which their choice never had.
“Those ads are telling us that ppl would buy Macs if they could afford them. That’s Microsoft telling us that!”
Microsoft was slurring the differences between its Windows OS and Mac OSX by ignoring the latter. It was all features and no sizzle.
“That’s a big opportunity for Apple. If it doesn’t want to build cheaper Macs, it could license others to. OS X on HP, Sony and Dell could cut swathes thru Windows’ market share.”
I disagree. If Apple pursued market share directly, that way, it would be at the cost of profits. Again, Apple is doing rather well despite the economy, so there is no need for panic.
Beeblebrox, it is very easy to set up a false comparison. All you have to do is leave out anything which might prejudice your case. All you have to do is ignore real differences. Apple does not sell low end, razor thin profit margin, e-waste computers, so if your starting price is below Apple’s, it must always lose.
So what, who cares? They were never going to be Apple customers.
Does this happen in the real world? Sure, for people who have no understanding of why the Mac is better than a PC. If you only consider Apple’s hardware disadvantages without understanding its software advantages, then Apple must always lose. But, that is an argument based on ignorance.
Apple’s sales have been growing at over 30% a year. This cannot be simply because Microsoft Vista sucks so much. Nor can it be because Mac hardware is cute and fashionable. There are substantial reasons that make a Mac a pleasure to use. You may be ignorant of them or discount the validity of those reasons, so that is why you fight this.
An increasing number of people disagree with you. It could be that they are wrong in choosing a Mac over a PC. Or that you are wrong. Or that their choice is none of your business. Or it is all going over your head, because you are a PC bigot.
Chris Howard said:
“It was just that in MS’s sample-set, so far, 100% of buyers would have seriously considered a Mac if it was in their budget (in reality it’s probably 3 in 10 at best). And every ad is going to show that 100%.”
That’s how you rig an argument. You prescreen to create a foregone conclusion. You intentionally pick out ignorant people.
It’s rather pathetic of Microsoft to do this, right? That’s because MS can’t compete on anything but price and ignorance.
I don’t really care if 7 out of 10 buyers would never considered a Mac. Not long ago, that figure would have been 9 out of 10.
Nor do I think that Apple cares, since it only markets to the upper end of the Consumer, Creative and Small to Medium sized business Markets.
Apple is coming from a very low market share and is growing at a compounded rate of over 30% a year. It only takes another six years at the same rate to be at over 50% of the market.
Do I expect that? No, because trends never extend forever and the computer market place is going to change soon.
Apple is doing quite well. It has no need to change its marketing plan. It would be best to laugh at these ads, because they don’t target potential Apple customers.
“Which sends out a msg to *all* PC buyers that they should consider a Mac. Interesting. And risky.”
Yes. It does create a mystery of why so many people are buying Macs, despite the ads. The last thing that MS should want is for a PC user to ask Mac owner why. Most Mac owners can give reasons why the Mac is different and better.
It seems suicidal for MS to be calling attention to Apple.
“It seems suicidal for MS to be calling attention to Apple. “
It does doesn’t it.
Like a one last desperate effort. It’s like they’re saying Macs are great and worthy alternatives but (fortunately for MS) most people will end up having to (happily, admittedly) settle for a PC. And of course, they’ll be very happy with their hardware… but what about the user experience?
Be funny thought to see a follow up in 12 or 18 months time.
It seems to me, that many Macheads are of the opinion that if a computer is cheaper than a Mac, it is crap.
Is this true? Is any computer cheaper than a Mac crap?
Hadley presented a comparison with similar basic specs. Folks have had fun pointing out that on other specs the MacBook is superior and ultimately worth the extra $400.
But that doesn’t make the Dell crap. Inferior yes, crap, no.
And this seems to get lost on Mac fans. They seem to have lost touch with reality, believing only Mac specs constitute worthy computers.
Let’s look at true reality. It’s not about the hardware. It’s not the hardware that makes Macs great. A Mac mini is not crap because it doesn’t have the specs of a Mac Pro.
(True you can actually get crap PC hardware. Hey, but until the recent Mac mini upgrade, you could get crap Macs too.)
And that’s why Lauren, Giampaolo and the kid can get a good computer cheaper than a Mac. But MS is just comparing hardware. You can get good computers cheaper than Macs, although inferior spec wise.
It’s about the OS. You hear it over and over and over again from switchers. Lines like “It just works”, “I get more done”, “I don’t spend my weekends troubleshooting”. That’s not everyone’s experience, but I think it’s a safe generalization.
I was talking to a friend recently who uses Windows at both home and work (and who says he wants to get a Mac at home), and I said I’d had so little Windows experience in the last few years since switching I’d forgotten how bad Windows is.
And I asked if Windows is as bad as people say. His response was “Yes, yes, yes, yes.. Yes!”
Chris Howard sid:
“Like a one last desperate effort. It’s like they’re saying Macs are great and worthy alternatives but (fortunately for MS) most people will end up having to (happily, admittedly) settle for a PC. And of course, they’ll be very happy with their hardware… but what about the user experience? “
Microsoft seems to constanly repeating the past, long after conditions have changed. You see, Microsoft had some real issues to tout against the classic Mac Operating System, even though Microsoft made a big deal about how much less expensive and faster Wintel hardware was.
Since then, Apple’s hardware improved by moving to Intel processors. Now, MS says that the Apple hardware is the same as Wintel, but it cost much, much more.
That isn’t quite true or Windows Vista wouldn’t run fastest on Apple hardware. There may be quality differences that aren’t included in Wintel. If you are comparing Apple to a HP or Dell, then Apple computers are very close to costing the same.
Apple doesn’t sell very cheap computers; ones costing less than $999. HP and Dell do, but there is little or no profit in them doing so. That is why HP sells five times as many computers as Apple, but only makes half again more profit.
MS is running ads which state that there are markets which Apple chooses to engage in. A reasonable person might ask “Why doesn’t Apple sell these computers?” The answers that I’ve heard are that Apple can’t make enough profit by doing so. And that Apple would have to cut too many corners to be worth risking its reputation for quality. And that Apple doesn’t care about market share, since that is the only reason to sell cheap PC’s.
Apple is doing fine in its marketing plan. There is no proof, yet, that the recession is hurting Apples sales, but it sure is hitting PC’s hard.
Chris Howard said:
“It seems to me, that many Macheads are of the opinion that if a computer is cheaper than a Mac, it is crap.”
That wasn’t my argument. My argument was that there is a wider variation in quality on the PC side. If you looking for a cheap computer, how do you avoid getting stuck with junk? A checklist won’t tell you that. Who can you trust to tell you, either?
The other part is that to avoid being stung by poor quality, a PC buyer needs to make themselves an expert to weed out the junk. Or they can buy a higher quality brand name computer, like a HP or Dell, and wind up costing about the same as a Mac.
But, does the time necessary to become an expert on PC hardware get folded into the cost of the cheap PC? No. But, it should, because we Macintosh owners time is worth money. Why shouldn’t your time be worth something, too?
“Is this true? Is any computer cheaper than a Mac crap?”
What Mac crap are we talking about, here?
“Hadley presented a comparison with similar basic specs. Folks have had fun pointing out that on other specs the MacBook is superior and ultimately worth the extra $400.”
Spec’s don’t tell all the story. I wouldn’t use Windows Vista even if you gave me $400. But that is a personal preference.
“But that doesn’t make the Dell crap. Inferior yes, crap, no.
And this seems to get lost on Mac fans. They seem to have lost touch with reality, believing only Mac specs constitute worthy computers.”
We Mac fans have a right to our opinions, since we are paying for them. Might it be that there is something which makes the Mac’s worth more to an Apple customer? Especially since, most of us were once PC buyers who converted?
Price isn’t everything, Chris. You may not agree with our opinions, because they do not apply to you, but can’t you recognized that there is something that makes us value Apple? It isn’t bigotry, because we used to own PC’s.
“Let’s look at true reality. It’s not about the hardware. It’s not the hardware that makes Macs great. A Mac mini is not crap because it doesn’t have the specs of a Mac Pro.”
It’s not the spec’s, Chris. You buy a computer to fit your needs. It either works for you or it doesn’t. There are many intangibles in a computer which the spec’s cannot cover. Should we ignore them?
“(True you can actually get crap PC hardware. Hey, but until the recent Mac mini upgrade, you could get crap Macs too.)”
Funny about that. When the Mac Mini was introduced, AOpen computers produced a PC in the same form factor which had a slower processor and cost $100 more.
The Mini costs more because it uses expensive laptop components to get a tiny size. The old Mini is very popular in server banks. It took so long for the Mini to be upgraded, because hardware prices had to come down to where Apple could start making its usual profit margin.
Besides, what was the purpose of the Mac Mini? It was to entice cheap PC owners to buy Apple. If all you want to run is just the Internet and Apple’s iLife programs, then the Mac Mini works fine. There are plenty of people who have few computing needs and are pressed for space. Of course, the Technocrats among us might consider the Mac Mini crap, but it was never designed for them.
“And that’s why Lauren, Giampaolo and the kid can get a good computer cheaper than a Mac. “
As I said, Apple chooses to not engage in the low end market. Those buyers could get cheaper, certainly. But, were those computers GOOD? I don’t think so. Why? Because the computers they chose wouldn’t perform the functions which the buyers initially said they wanted. Worse, they were stuck with the cheaper levels of Vista which wouldn’t give them an equal experience to the Mac. They wouldn’t have Vista Areo on them, except for the $1500 comparison.
“But MS is just comparing hardware. You can get good computers cheaper than Macs, although inferior spec wise.
It’s about the OS. “
Right. But, the NVedia 9400 GPU’s are hot on the new Macs. Apple will be doing a great deal with them, besides games.
“You hear it over and over and over again from switchers. Lines like “It just works”, “I get more done”, “I don’t spend my weekends troubleshooting”. That’s not everyone’s experience, but I think it’s a safe generalization.”
Yes, this is a quality difference which gets passed over by the ads.
There is also an “unlearning curve” which goes on here. It takes several months of use for a convert to “get the Mac experience.” The Mac OS suddenly feels better and more predictable on an unconscious level. The old Windows fear of trying something new, just for fun, vanishes, because you trust that the Mac won’t let you destroy your computer.
Some people never get the Mac Experience or give it the necessary time, so they switch back. So be it. Use what works for you. One size doesn’t fit all.
“I was talking to a friend recently who uses Windows at both home and work (and who says he wants to get a Mac at home), and I said I’d had so little Windows experience in the last few years since switching I’d forgotten how bad Windows is.”
That’s the point; we tend to forget unpleasant experiences. When I help a PC owner fix their problems, I have to fumble around at it. Nothing feels comfortable or safe on Windows. I have to cudgel my brain and ask, “How NOT to do it.” I succeed at fixing PC’s problem by intentionally choosing the wrong way—the uncomfortable way—the un-Macintosh way.
“And I asked if Windows is as bad as people say. His response was “Yes, yes, yes, yes.. Yes!”
The problem is, Chris, is that your friend may be ignorant of the real differences between the Mac and PC’s. Or they may be deluded by old arguments which don’t apply any more, or they may be confused that the hardware is cheaper on the PC side.
It takes a real leap of faith to overcome the conditioning which has kept them on the PC side. Then, who likes starting over by unlearning MS Windows backward way of doing things?
Many people are trying the Mac, now, because they have a safety net in that you can always run Windows OS on a Mac. The funny thing is that the people who plan on doing this rapidly give up Windows unless they have a requirement at work. Then, they moan and groan to me how awful and backwards Windows is.