October 9th, 2008

How much would an $800 Apple laptop hurt Microsoft?

Posted by Mary Jo Foley @ 8:47 am

Categories: Apple, Channel, Corporate strategy, OEMs, Resellers, System builders, Vista, Windows 7, Windows XP, Windows client

Tags: PC, Microsoft Windows Vista, Apple Inc., Microsoft Corp., Laptop Computer, Microsoft Windows, Ultramobile PCs (UMPCs), Microsoft Windows Vista (Longhorn), Desktops, Operating Systems

Just when the Windows marketing team thought things probably couldn’t get much worse, there’s word that Apple may be gearing up to launch a new Macbook with a low-end $800 price point.

One of the biggest selling points for new Vista PCs is price. There are more than a few decent Vista laptops out there for under $1,000.

Apple’s PC marketshare is hovering around eight to nine percent in the U.S. For many, Apple machines are still just too expensive — even though the lowest end Macbooks can be had for about $1, 099. But if users could get an Apple laptop for $800, I’d think many would think longer and harder about whether to go with Windows or Mac OS X.

Microsoft — and its PC partners — aren’t sitting idly by waiting for Apple to eat its lunch. Microsoft execs have stated repeatedly that the company, going forward, is working more closely with OEMs to create better out-of-the-box experiences for Windows PC users. It sounds like this will go beyond reducing and/or removing crapware.

There are other projects hatching in other groups at Microsoft, too. Microsoft Corporate Vice President Bill Mitchell and his PC|3 team, which is part of Microsoft’s Core Operating System Division (COSD), is working on “improving the mobile PC experience” for users in the developed and developing worlds both. From what little I’ve heard about PC|3, it sounds like at least part of its mission involves picking up where the Ultra-Mobile PC (UMPC) folks at Microsoft left off.

Microsoft has been mum on when/how/if it can get Vista and its successors to run on ultra-low-cost PCs (ULPCs). Currently, because of system requirements, Microsoft allows ULPC makers to ship with Windows XP, not Vista, and will do so through 2010. Given that magic 2010 cut-off date, I’d expect that the Windows team is working to produce some Windows 7 SKU that will be customized to run on ULPC systems.

Don’t forget, coming up from the other end of the market, there’s also a skunkworks effort inside Microsoft to port Windows Mobile to Mobile Internet Devices (MIDs). No word on what’s happening on that front….

If Apple does, indeed field an $800 laptop, do you think Microsoft will lose much market share? What else should and could Microsoft be doing to steel itself for a possible Apple price attack?