January 5th, 2009

Macs vs. PCs: Is it still a 'tax' if users happily pay a premium?

Posted by Mary Jo Foley @ 12:15 pm

Categories: Apple, CES 2009, Channel, Corporate strategy, OEMs, Resellers, Systems integrators, Vista, Windows 7, Windows client

Tags: Mary Jo Foley

It’s the eve of MacWorld Expo and Microsoft officials are out talking up the idea of the “Apple tax” again.

The Windows team last mentioned the Apple tax concept during Microsoft’s Professional Developers Conference (PDC) in late October. Then, as now, the Softies’ contention is that Apple’s higher prices — coupled with fewer natively ported apps — is making Macs less appealing to customers and partners.

“Apple had an excellent ride through October, but Windows is turning the corner now,” Brad Brooks, the Microsoft Corporate Vice President of Windows Consumer Marketing, told me during a phone interview on January 5.

Brooks hinted that new market data which will go public during the Consumer Electronics Show later this week will prove Microsoft’s claims. But he had no numbers to share today. Microsoft also is touting this week a chart that it plans to update once Apple makes any new MacWorld announcements that is designed to show that Windows PCs best Apple systems at every price point in terms of cost and functionality, Brooks said.

(Click on the chart below to see Microsoft’s Apple Tax spec sheet.)

To my mind, there are a couple of key questions here. First, when — if ever — will Apple’s user base object to paying a premium? When you ask Mac users why they willingly shell out hundreds of dollars more for their systems — knowing full-well that some of the software they might want to run isn’t available for Macs — their answers run the gamut. I’ve heard everything from “I just want no parts of Microsoft,” to “Macs are more secure and easy-to-use,” to “an iMac looks way cooler sitting on my new coffee table than any PC would.”

Will there be a point when these reasons won’t justify the costs? What will happen once Apple attempts to grow its user base beyond the unquestioning, loyal core to include folks who will look at things like dollars and cents as being more important than a recessed plug?

Microsoft is highlighting some holiday sales figures from market researchers at NPD and other firms from late last year that showed Apple’s holiday sales were off in certain categories. Microsoft is using this data as evidence that in tougher economic times, “luxury” purchases like the Mac are going to have a tougher time than “bargain” Windows PCs.

There is some data that backs Microsoft’s contention. In mid-December, NPD issued new numbers that showed some Mac sales were down, compared to sales of comparable Windows systems. (NPD noted at that time that in the notebook category, Apple did better than its Windows-based competition, however.)

But researchers at Net Applications painted a different picture when that company released its latest operating-system and browser-share metrics. Net Applications found that the global market share for Windows fell to 88.68% in December 2008, down from 91.79% in December 2007 — with Apple capitalizing on Microsoft’s losses. Internet Explorer’s share slipped even further, according to the firm, down from 78.58% in December 2007 to 68.15% in December 2008.

The official (as opposed to the pirated) version of Beta 1 of Windows 7 is expected to go to pre-selected testers this week, probably on Wednesday evening. As Windows 7 starts to take final shape, it will be interesting to watch which way the Mac OS X vs. Windows market share data morphs.

What’s your prediction? Will Windows continue to lose marketshare to Mac OS X in the consumer space? Or will Windows 7, possibly coupled with more price-conscious customers, manage to turn back Apple’s slow but steady gains?