Slow economy driving new wave in the Mac vs. PC war
The perennial battle between Apple and Microsoft for the wallets of the computer buying public has been great fodder for journalists and fanboys alike for many years. It is a true religious crusade for many, and in this shrinking economy a very real concern for everyone in the business. Apple has owned the creative market for two decades now, due to its early adoption of a GUI. Microsoft has long had a strangle hold on the business market and general home market due to lower acquisition costs and a DIY approach that has broad appeal. A lot has changed in the last 20 years as both MAC OSX and Windows Vista offer a rich graphical interface, support the same basic set of applications, and run on comparable hardware. At the end of the day, an average user can get their work done as effectively on either platform today whether that work is basic word processing, graphic design, software development, etc.
The adoption of web-based computing has further blurred the distinction between the products. If I can read email, create/read/edit a document, use facebook, run instant messaging, etc. all via a web browser these days, then it doesn’t really matter which computing platform I am using — the experience is, and should be just about identical. Add to this the growing adoption of handheld devices such as Netbooks and Smartphones, and it is clear that there is a fundamental shift on in the way people choose computing devices and what they use them for. Despite this changing landscape, ultimate bragging rights still seem to be based upon stand-alone PC usage, which includes notebook and desktop systems. Whose offering costs least, is more powerful, most popular, more secure, makes the user hip? These are the the same questions that have been addressed by both sides for years now in their marketing efforts, but the new twist is that there is less of the consumer dollar to go around these days and the ads are reflecting this in their increased levels of propagandizing.
Apple’s very smart series of “Get a Mac” ads play heavily on the “hipness” factor, promoting MAC as the clear choice for a quality oriented person who really has it together. Microsoft has attempted to counter these with their own version of hip — with mostly disastrous results. There is the awkward Bill Gates/Jerry Seinfeld spots, the uninspiring “Mojave Experiment”, the mild prodigy appeal of “The Rookies”, or the somewhat effective “I’m a PC” campaign. The latest twist has come in the form of the “Laptop Hunters”, which attacks MAC in its true weak spot, pricepoint. This is the ad that kicked it off:
So according to Microsoft, buying “cool” is a luxury. You can save real money and still get everything you want in a computer. While this value proposition has been in effect for some time, the message is especially timely in this slow economy and tight credit market and apparently, is hitting home. Apple’s sales of Mac’s has been slipping consistently for months now. While Apple is doing very well overall according to Q2 results released just today, their real success driver right now is the iPhone. Of course, Apple is responding to the PC market shift with a new set of Get a Mac ads, but the smug/hip routine is ringing hollow against the backdrop of the economy.
Apple’s desperation is evident in the video clip below from CNBC’s Silicon Valley Bureau Chief, Jim Goldman. It is an embarrassingly transparent product placement for Apple, that responds to the “Laptop Hunters” spots. It is full of half truth and some flat out lies. To compound matters, Goldman’s pitch is a near verbatim rip-off from this article by Arik Hesseldahl… with zero attribution. Read this recent Gizmodo article for a good run down on what is real and what is nonsense.
If you think that Apple’s sliding market share is automatically great news for the Windows based PC manufacturers or Microsoft, think again. Their margins remain very small compared to Apple and there is another trend that is eating into their profit: Netbooks. These small, inexpensive computers offer decent performance for performing basic computing chores such as email, Word Processing, IM, Facebook and more. Their cost is low, ranging from $200-$400 or even less if purchased with a data contract from cell carriers such as AT&T or Verzion. Microsoft has done well in penetrating this market, with their XP OS being the predominant choice. Apple has not yet entered a product into the arena and may well decide to sit it out a bit longer, enjoying the fruits of their higher profit margins in the PC game and continued dominance with the iPhone. On the other hand, I am hoping to see Apple get into this game and bring iPhone technology to a netbook device with a slightly larger screen and a real keyboard. This is also a great competitive opportunity for alternative OS choices such as Linux and Android to take hold in the broader market.
2009 will be an interesting transitional year, with the economy driving more practical buying decisions and manufacturers vying for their piece of a smaller pie. Lets hope for innovation and competition to place better technology into our hands and at prices that make it accessible to more people than ever.
Great post Ed. I think Microsoft’s biggest problem right now is that they lack a clear vision of what they want to be. They say they’re a software company, yet it seems like they focus most of their energy on other things–besting Google at search, vanquishing the iPod, etc. To make things worse, it seems like after XP SP2 they just stopped innovating. Sure, they made a lot of promises about what Longhorn/Vista was going to be, but came way late to the party, and without a lot of what was promised. I’ve played with Windows 7, and although it’s a vast improvement to their initial release of Vista, I still don’t feel like they’re giving their customers (particularly in the enterprise where most of their install base is) compelling enough reason to upgrade.
Here are just a few of the problems I still see in Windows just off the top of my head: System-wide search is still a disaster. The registry needs to just go away period. They need to deliver on that new file system they promised us like 5 years ago. They also still haven’t integrated a Microsoft bundled suite of applications, tightly integrated into the system to do the stuff regular people actually want to do with their computers (like Apple’s iLife). They keep relying on OEM’s and 3rd parties to include these things in the form of trial-ware, limited versions, and even pop-up ads pre-installed on the system–what a disaster.
If Microsoft doesn’t start pulling its head out of the sand, and seriously bringing their A-game, their market and mind-share are going to continue eroding. Linux will start to dominate the enterprise, Apple the home market, and I see Android and Ubuntu becoming the big players in the netbook space.