October 30th, 2009

A visit to Microsoft's first store

Posted by Robin Harris @ 5:22 pm

Categories: Marketing

Tags: Apple Inc., Microsoft Corp., Store, Windows Store, Microsoft Windows, Operating Systems, Corporate Communications, Software, Marketing, Robin Harris

Leaving the high desert mountains for a day I went Scottsdale’s Fashion Square mall, where the world’s first Microsoft no, make that Windows store opened. [For more photos, see my Gallery Tour.]

That’s right, the logo on the store isn’t Microsoft. It isn’t even the wavy Windows flag logo. It is a newly styled Windows logo.

Microsoft store logo

That’s how you know this isn’t your father’s Microsoft. It’s way different — sleek, colorful, stylish, modern — just like an Apple store.

The setting
Set in the middle of the upscale mall — Scottsdale is part of the Phoenix metro area — that doesn’t house an Apple store. Good thing, too: shoppers might get confused.

The similarities: white façade surround; large glass windows; spare modernist interior; T-shirt clad employees; stylish hardware. Even the occasional “it just works” tagline. Except for the color logo on the façade and the dark wood table tops and you could be in a Apple store.

Which is not a criticism. Apple stores are nice. Congrats to Microsoft’s team for ditching the brown Zune difference-for-the-sake-of-difference impulse.

The store
The store was busy at one o’clock on a Thursday afternoon. No one bothered me as I came in taking pictures.

The most striking non-Apple feature of the store is the row of thin bezel displays along each side wall. They display graphics, advertising messages and video, including some Xbox output.

Another difference: several of Microsoft’s Surface computers placed around the store. These large screen touch sensitive displays are impressive for their responsiveness and ease of use. Think giant iPhone.

At the back of the store is a small theater area - just like at Apple stores. In front of that is Microsoft’s version of the Genius Bar.

The goods
The merchandise choices are well chosen. The slim, stylish and colorful notebooks are a welcome change from the chunky gray, heavy, notebooks on display at Wal-Mart and Best Buy.

Three rows of tables displayed hardware from Dell, HP, Sony and Lenovo. I also saw a Flip camcorder and colorful pink and red netbooks.

Colorful computer bags and accessories are displayed as well. The overall effect suggests quality, not price, drove product selection.

The help
I was looking at a Sony notebook with a textured surface when a store associate asked me if I had any questions. I asked which version of Windows would he recommend I buy to run a video editing app on my Mac?

He had no idea about Mac and Windows but that he would find someone who did. The first person he asked also had no idea so they led me to a nice Answers lady.

She correctly outlined 3 ways I could run Windows on Mac. OK, and which version of Windows 7 would be appropriate for video editing?

She said Windows home basic. No extra features in the higher-end versions I’d want? No, for only running a program Windows 7 home basic is all you need. She didn’t try to upsell me to a more expensive version.

A 2nd opinion
A noncombatant in the computer wars thought the 2 stores looked alike, but that the Apple store had a cooler vibe - not as hard sell. After 3 can-we-help-you’s at the Windows store she went to a Pottery Barn to relax.

I’d chalk it up to a brand new staff eager to prove themselves. They’ll figure out what works, given time.

The Storage Bits take
The first Windows retail store is an impressive effort. Sure, they stole freely from Apple, but why not? Few civilians will notice or care about the similarities - unless the stores are in close proximity.

That’s when the price differences between Windows and Mac hardware will be most obvious. Stylish Macbook, $999. Stylish Sony, $799. Many a suburban breadwinner will wonder what the difference is. Apple will have to tell them.

The Windows stores are aiming at the mass-market end of the Apple demographic. Soccer moms and small business, not students and designers.

That’s the core of the MS strategy: to fuzz the difference in the consumer’s mind between Microsoft and Apple. Except, of course, any price difference. “We’re as good as Apple, only cheaper!”

Apple is firing back. “#1 in customer satisfaction” the latest ads proclaim. They’re also targeting XP users who face a tough upgrade to W7. With Grand Central Dispatch and OpenCL they’re positioned for the future - as long as they can deliver obvious “wow!” to consumers.

The winners are us, the consumers. Microsoft can’t illegally crush Apple the way they did Netscape 15 years ago. They have to compete on the merits. And Apple will have to work harder to tell its story.

Let the games begin!

Comments welcome, of course.

August 3rd, 2009

HD DVD returns and kicks Blu-ray to the gutter

Posted by Robin Harris @ 3:13 pm

Categories: Disk drives, Marketing

Tags: HD-DVD, Blu-ray, China Blue Hi-definition Disk, Government, Hd Dvd, DVD, Consumer Electronics, Vertical Industries, Personal Technology, Home Entertainment

Just when Blu-ray thought it had clear sailing, a tempest has risen in the East: China Blue Hi-definition Disk (CBHD). Toshiba has licensed its HD DVD to them and it will be the unit world leader in HD optical technology in just 12 months.

Why? The Times Online reports that the CBHD players are outselling Blu-ray in China by 3-1 and the CBHD disks cost a quarter of Blu-ray.

Blu-ray, we hardly knew ye
What happened to Blu-ray’s dominance? Blu-ray’s dominance.

Conceived by Sony at a time when few thought upscaling would succeed, the idea was that HDTVs would require HD content on optical media. Reliving the glory days of DVD adoption they forecast tens of billions in revenue from players and disks, enormous licensing fees and consumer-proof DRM.

Watching the CD business crater, studio thought that HD would drive their business to new heights while eliminating piracy. It was an optical gold rush - that has turned into a mirage.

The fundamental problem is that the slightly sharper HD picture isn’t worth the extra dollars. 10%-15% max.

Enter the dragon
China has good reasons to support a home-grown HD format. First, the exorbitant Blu-ray royalties hurts Chinese manufacturers ability to compete on price.

An equally important, but unspoken, issue is the econoclypse. The Chinese government has made a deal with the Chinese people: leave us in control and we’ll deliver rising living standards. The current slow down has hit China hard: millions have been laid off and economic growth is anemic.

CBHD is a double win for the Chinese government: billions saved in royalties; and a much cheaper, locally manufactured, luxury item for the restless masses. Blu-ray is simply collateral damage.

Studio knuckle-draggers no doubt are salivating at a tough new form of Region encoding: incompatible formats for the West and Asia. But will that really work?

English is the #2 language in Asia, so English-language CBHDs will be popular. Shanghai vendors will happily sell CBHD players and disks on Ebay. The economics are irresistible and, other than the studios, who will turn down HD content at DVD prices?

The Storage Bits take
Toshiba’s gambit is brilliant. Instead of taking a total loss on their billion-dollar HD DVD investment, they’ll get incremental revenue and, no doubt, valuable future consideration from the Chinese government.

It is a nice win for the Chinese government and manufacturers. Blu-ray’s high cost has slowed its acceptance to a crawl, so Chinese CBHD players will rapidly climb down the cost curve to prices lower than DVD-only players since they aren’t paying DVD royalties either.

The studios get a couple of years to make some money on Chinese CBHD releases, but will piracy disappear? Not anytime soon.

The big loser is the Blu-ray camp. Boo-hoo. They’ve consistently misjudged the market and Blu-ray’s appeal. Guys, I’m sorry you made a bad business decision, but it’s time to man up and take your write-offs.

CBHD vendors should not ignore the writable CBHD market. Many consumers would like something larger than DVDs for backup and much cheaper - and more compatible - than Blu-ray.

Here’s hoping the CBHD storage market is running wild by this time next year. CBHD will be the world’s #1 format in unit volume by next year.

Comments welcome, of course. Who vetted that name? China Blue was Kathleen Turner’s alter-ego in Ken Russell’s outrageous Crimes of Passion. A prostitute by night, hard-charging professional woman by day and a constant temptation to Tony Perkins’ street preacher, she is certainly not a character the prudish Chinese government would endorse.

July 31st, 2009

Telcos: stop wasting our time & money!

Posted by Robin Harris @ 1:30 pm

Categories: Infrastructure, Marketing

Tags: Message, Telecommunications Company, Verizon Communications Inc., David Pogue, Telecom & Utilities, Telecommunications, Robin Harris

The NYTimes’ David Pogue suggests that its time for the telcos to give up their lucrative and time wasting instructions:

At the tone, please record your message. When you have finished recording, you may hang up, or press 1 for more options. To leave a callback number, press 5.

Since the advent of answering machines 30 years ago, is there anyone in America who doesn’t know how to leave a message after the beep? Maybe your cousin Tarzan, just in from the Congo, but he’ll get it after a couple of tries.

Have you ever left a call back number? Me neither. With Caller ID you either don’t need to or you put it in the message.

How about a numeric page? Who uses pagers anymore?

Delivery options? “Yeah, can you send a pizza with that? Pepperoni, extra cheese.”

Thank goodness they tell us to hang up after we’ve finished. In other countries, where telcos are government run, they don’t - and people wander around all day, cellphones on their ears, wondering what to do next.

It’s the money, stupid. YOUR money.
As David points out:

If Verizon’s 70 million customers leave or check messages twice a weekday, Verizon rakes in about $620 million a year. That’s your money. And your time: three hours of your time a year. . . .

That probably covers their annual lobbying budget at the Ebay on the Potomac and all the little state Ebays from Albany to Austin to Sacramento. You think crushing net neutrality comes cheap?

David has helpfully provided a list of links where you can complain.
Verizon: Post a complaint here.
* AT&T: Send e-mail to: customerissues@attnews.us.
* Sprint: Post a complaint here
* T-Mobile: Post a complaint here.

Keep it clean and on point: this needs to stop, NOW!

The Storage Bits take
If there is anyone left in America who believes that free markets always respond to customers and not their corporate overlords, please think about this the next time you’re listening to the “beep” message:

The telcos have done this deliberately to drive up their sales, never mind the inconvenience and cost to consumers. Corporations act on their own interests, not yours. If those interests happen to be congruent, oh joy. If not, you lose.

Courteous comments welcome, of course.

July 29th, 2009

Dead-Finger Tech: Panasonic HD front projector

Posted by Robin Harris @ 11:43 pm

Categories: Infrastructure, Marketing

Tags: Panasonic, Movie, Tirion, Projectors, Hardware, Components, Robin Harris

I like my toys. Dual monitors on a quad-core, 12 GB Mac Pro. Blackmagic Intensity Pro HDMI capture card. 4 TB of local disk, including my favorite, a 300 GB WD 10k Velociraptor system disk. Logitech Trackman Wheel and a Microsoft Natural Keyboard Elite.

Canon HV20 and Kodak Zi6 HD camcorders. Final Cut Studio and Shake. External 4 drive eSATA RAID. Contour Shuttle Pro2. Lexar Professional card reader. iSight Firewire webcam.

Scansnap sheet-fed scanner. Olympus LS-10 digital audio recorder. Microphones. iPhone, natch. Etymotic earphones. Wacom tablet. Gitzo carbon fiber tripod with Manfrotto fluid head. Teleprompter.

80mm rich-field refractor with 2″ eyepiece and star diagonal. 10×40 binoculars. Tirion’s Sky Atlas 2000 and Vehrenberg’s Atlas of Deep Sky Splendors. A dark sky Arizona mountain town to enjoy them in.

Oppo Digital DVD and Sony Blu-ray players. Outlaw Audio receiver. Dynaudio speakers. Home-built 120″ screen. 1,000 DVDs. No cable, no landline.

Did I mention I like my toys?

And the winner is . . .
I like them all and love several of them. But my dead-finger tech choice is one I never would have guessed a year ago: my Panasonic PT-AX-200U front projector.

The picture quality is superb - as good as the local movie theater if memory serves. Dozens of people have come over for the Friday night movie and all have been impressed.

Size matters
It isn’t just the quality though - it is the sheer size of the screen. My prior 50″ plasma was excellent, but I see them now and they just seem puny.

I don’t think I could go back to a small screen. Even a 50″ big screen.

The downsides
It isn’t perfect, but the negatives don’t affect me as much as they might others.

• Dark room. Movies don’t start until it is late twilight because brightness kills the theater experience for me. No daylight saving time in Arizona, so movies start at 8 pm even in June. The picture is watchable with ambient light, but I want the movie theater experience. If you can’t darken the room it may not be for you.
• Costly lamp replacement. The powerful lamp that gives the 2000 lumen beam is only expected to last 2000 hours. Some get less. At $350 for a replacement it isn’t cheap - especially since the street price for the projector is only $1k.
• Size and weight. At 10 lbs. it isn’t light, nor is it small except when compared to a TV. But it is a lot greener.

The Storage Bits take
How we interact with our stored data is almost as important as the data itself. A large, high-quality HD image makes it easy and enjoyable to interact with video content.

In the latest James Bond movie, MI6 is equipped with table and wall-sized touch screens. They have the right idea. Size matters.

Perhaps my next monitor will be a 30 incher.

Comments welcome, of course. BTW, I bought it. Panasonic markets them through their business division, not home entertainment, because at $1,000 they are cheaper and bigger than most displays.

July 26th, 2009

The Wintel blue light special

Posted by Robin Harris @ 8:18 am

Categories: Marketing, Software

Tags: Wintel, Apple Macintosh, Apple MacBook, Apple Inc., Price, Sales Strategy, Notebooks, Sales, Hardware, Notebooks & Tablets

Attention MSmart shoppers.
Wintel’s results are in the toilet and Apple’s surpassed estimates. Despite Microsoft’s sassy Laptop Hunter ads, Apple sold more Macs than anyone expected. Want to know why?

Win on price, lose on price
Behind the engaging little customer stories in the Microsoft ads there is one simple message: “Windows notebooks are cheaper than Apple notebooks.” Cheaper, not better.

No wins in speed, security, quality, weight, comfort, coolness, or whatever. They just cost less. That’s it.

Which is wonderful. But it gives Apple a simple response: cut prices.

In June they did. And sales soared.

How much? Wall Street’s consensus estimate was 200,000 Macs below the actual sales. Since the price cuts came in the last 3 weeks of the quarter - and sales were presumably lagging - the cuts up’d Mac sales by ≈300,000.

If the economy stays steady - and I doubt we’ve seen the worst of it - Apple could ship a record-breaking 3.5 million Macs this quarter. And if they release a $799 MacBook, even more.

Not big cuts either.
It didn’t take much. The cuts ranged from $100 to $800 - plus some added features.

For the entry level 13″ MacBook Pro they added features - FireWire, 9400M graphics and 7 hour battery - and dropped the price almost 8% or $100. On the entry-level 15″ they dropped the price $300, or 15%.

Those prices are still way higher than the average Wintel notebook. Even with the cuts Apple’s gross margin - the difference between product cost and sale price - jumped to 36.3%, or more than 3 percentage points higher than they’d forecast.

Translation: Apple can cut prices further. Expect the next move to be an $899, or even $799 machine. The long-rumored tablet or a cost-reduced MacBook? Either would work.

The Storage Bits take
Microsoft seems to have forgotten why it is in business: to build great software. Not video games, cellphones, advertising or music players.

They spend $10 billion a year on R&D. Many of world’s top computer scientists and software engineers work there. There’s almost nothing they can’t do in software.

And yet. We get the Vista fiasco and Zunes. A security soap-opera starring you as the victim. Billions poured into business distractions like online advertising. MSN. MSNBC. Anti-trust violations. Patent infringements.

And the only thing they can say is “notebooks running our software are cheaper?” Sad.

Update: Some commenters are confused. I’m not saying that Wintel can’t claim anything beyond cheaper. But that is all the ads claim. Stay tuned for an upcoming post on the subject. End update.

Comments welcome, of course.

July 8th, 2009

Chrome OS: good for you; bad for Microsoft

Posted by Robin Harris @ 9:34 am

Categories: Marketing, Software

Tags: Google Inc., Operating System, Microsoft Corp., Netbook, Netbooks, Nettops & MIDs, Linux, Operating Systems, Hardware, Software, Robin Harris

Google’s latest announcement is good news for all computer users. It helps loosen Microsoft’s death grip on the PC market and promises lower prices, higher reliability and smarter design.

Unpacking Google’s announcement
This announcement was carefully calculated - not an over-caffeinated coder’s late-night howl.

• Timing. Note the 12-18 month delivery: they’ve been watching how M$ freezes the market with “strategic” pre-annoucements.
• Pricing. Free, as in open-source. M$ will have to fight for every dollar from netbook makers. Google should be handing out “Chrome OS” coffee cups to every M$ OEM starting with HP and Dell.
• Target. Developers: “For application developers, the web is the platform. . . . [it will give] developers the largest user base of any platform.”
• Goal. “. . . computers need to get better.” More like a big smartphone and less like a server - a clear swipe at M$.
• Market. “. . . small netbooks to full-size desktop systems.” Google is generously ceding the server OS market to M$ and Linux - for now.

Low-end becomes mid-range
As noted in Windows kicks Linux to the curb, it is costly for M$ to defend Windows pricing at the low-end. On a 99¢ netbook even $5 for the OS is a problem. The uncoordinated Linux assault on Windows has fizzled out, but Google has the money and the presence to reignite the competition.

And competition is a Good Thing.

The Storage Bits take
As Moore’s Law and economies of scale make it possible for a $200 netbook to do what most folks need, the lucrative OEM OS market will start to dry up. Microsoft will have to decide between clawing for OS dollars or protecting their Office franchise.

They’ll be wise to choose the latter, but old habits - and revenue streams - die hard. Consumer operating systems should be low-cost commodities, and the Chrome OS is a step in the right direction.

Today’s personal computers - including Macs - are about where cars were in the 1930’s: funky 2-speed automatics; manual chokes; flaky brakes; hinky electrical systems; vapor lock; but hey! you don’t have to crank start them hand load the boot program. The industry has a long way to go.

Comments welcome, of course. History note: there is an older GCOS, influenced by the Multics OS that inspired Unix, the General Comprehensive Operating System. Almost 50 years old, it is still running on some mainframes in emulation.

July 1st, 2009

Why Windows 7 should be free

Posted by Robin Harris @ 6:49 am

Categories: Marketing, Software

Tags: Microsoft Windows Vista, Microsoft Corp., Microsoft Windows 7, Microsoft Windows Vista (Longhorn), Operating Systems, Microsoft Windows, Software, Robin Harris

After the Vista fiasco, Microsoft owes its long-suffering customers more than a “screaming deal.” They’re owed an apology from Steve Ballmer - and a free copy of Vista SP3 Windows 7.

The backstory
Vista’s market failure was not a surprise inside Microsoft. Senior development execs - people who’d actually cut code on large enterprise-quality projects - knew that the project’s many slips, redefinitions and feature cuts were symptoms of a far deeper problem.

The out-of-control development wasn’t just a problem inside Microsoft: it burnt thousands of outside developers too. Many finally gave up on the ever-changing Vista betas to wait for the final shipping product - leading to the application and driver issues that burnt so many users - including Microsoft director and former President Jon Shirley.

Let the grown-ups drive
Windows 7 is coming out so quickly and to such great reviews not because Microsoft hired people who could code - but because they re-architected their development process. While that is a Good Thing it also points to why Windows 7 should be free: Vista was flawed from the beginning.

What about XP?
XP users should pay for Windows 7 because it is a new OS for them. But Vista users - especially people who bought “Vista Capable” machines or retail copies - are owed much more.

The Storage Bits take
Really, is giving people 50% off on the product you should have shipped in the first place a “screaming deal?” I don’t think so.

The Vista train wreck - years in the making - is a long term blot on Microsoft’s reputation. Doing the right thing for customers today will pay dividends tomorrow.

And the Ballmer apology? He’s the CEO and the entire fiasco took place on his watch. The buck stops there and he should own up to it.

Comments welcome, of course.

June 26th, 2009

Blu-ray's Blo-tards bite back

Posted by Robin Harris @ 7:30 pm

Categories: Disk drives, Marketing

Tags: Robin Harris

Someone hired the PR/lobbying firm Corporate Advocates to bite back at Storage Bits. Their message: the Harris Poll on Blu-ray was wrong about the number of homes with Blu-ray players.

A fact, it so happens, I never mentioned. But blow enough Blu-smoke and people will forget what they see with their own eyes?

I don’t think so.

Free speech isn’t free
Good thing our corporate overlords can afford the drivel that CorpAds is shoveling:

. . . the dramatic increase in Blu-ray Disc hardware and software sales clearly indicate that the format has in fact reached critical mass (surpassing even DVD penetration at the same point in DVD’s lifespan). . . .

[emphasis mine]

If today’s Blu-ray is what “critical mass” looks like, please don’t show me failure. That would be too scary.

The CorpAds point is that the Harris Poll numbers don’t square with manufacturer numbers. But Storage Bits never mentioned those numbers because they aren’t important.

Update: I’ve published the full text of the CorpAds email so you can read it for yourself. End update.

Update 2: The “evidence” that Blu-ray adoption beats DVD is based on the combined sales of BD players and PS3 consoles. Really, how many people buy PS3’s to play BD disks? Even if it is 20% - a high number - that puts Blu-ray well behind DVD. And ignores the fact that follow-ons usually do better: TV over radio; DVD over VHS; Google over Yahoo etc. End update 2.

So what is important?
Intentions. Harris asked people what they intended to do - and by a wide margin, people don’t much care about Blu-ray: player buying intentions are down; disk buying is lukewarm.

How could that be?

Because you don’t need Blu-ray to get high-def content. HD channels on cable; HD downloads from Netflix, Apple and others; and really good upscaling from Oppo Digital are all good substitutes for Blu-ray.

Price is the issue
All things being equal, consumers would rather have Blu-ray’s slightly better picture. But not if they have to pay a big premium for it.

People will shell out an extra $50 for Blu-ray capability. But Hollywood’s money is in the disks.

In the Harris poll, fully 68% of Blu-ray player or PS3 owners disagreed with the statement “I purchase movies on Blu-ray format regardless of price.” 68%!!!

These are the folks - like me - who own a Blu-ray player and some disks.

If the early adopters aren’t sold why will John Q. Public jump on this? He won’t. Like me he’ll get a few BD disks, think they look nice, and then go back to DVDs.

The Storage Bits take
Most new media fail. Historically, less than ¼ of new media achieve broad acceptance.

Blu-ray can still succeed with consumers, but vendors need to reduce prices. Of course, then Blu-ray may not be an economic success for vendors.

Oh well. Welcome to the free market. Say hi to your friends on Wall Street.

Update 3: I want to see Blu-ray succeed, mostly because I want to see a convenient 50 GB removable disk succeed. I’m not anti-Blu-ray, I’m anti-dumb. End update 3.

Comments welcome, of course. For historical perspective on new media, the curious might enjoy my wonkish review of an MIT Press book New Media, 1740-1915.

June 23rd, 2009

Blu-ray buzzkill: the death-spiral

Posted by Robin Harris @ 8:28 pm

Categories: Disk drives, Marketing

Tags: Time Warner Inc., Blu-ray, Harris Poll Number, DVD, Consumer Electronics, Personal Technology, Home Entertainment, Robin Harris

Will consumers upgrade to Blu-ray? The CEO & co-founder of fast growing Netflix believes mailed DVDs shall be replaced by web-sent movies. And a recent Harris [no relation, darn it] Poll finds that people today are less likely to buy a Blu-ray player than they were last year.

Now would be a good time to panic
Forget the ever-optimistic “market research” reports blowing smoke up the BDA’s hind end. And the “hold the course” counsel from Blu-ray marketers.

The Harris Poll numbers are damning. Purchase intentions dropped over 20% - from 9% in ‘08 to 7% in ‘09 - while the percentage of “not at all likely” prospects rose to 75% in ‘09 from 65% in ‘08.

Buzzkill: the lukewarm Blu-ray base
But surely the early adopters who’ve experienced the joys of Blu-ray - superb picture quality, uncompressed audio and many new features - the people who - like me - have giant HD screens, surround sound systems and large movie collections, surely we love Blu-ray. Right?

Nope. Even the 16% of the polled who have a PS3 or a Blu-ray player aren’t fired up.

51% won’t wait for Blu-ray if the DVD comes out first. Fully 59% don’t buy the most movies on Blu-ray. 65% won’t replace their DVDs with Blu-ray.

In short, even the people who own Blu-ray are underwhelmed. Yes, it is better, and the people who like it buy more movies than average, but there isn’t the “Wow!” factor that drove widespread adoption of CDs and DVDs.

The Storage Bits take
The decline in buying intentions owes something to the worldwide depression recession, but the apathy of BD owners is ominous. If the players get cheap enough more people will buy them, but even that won’t drive BD disk sales.

Unless drastic action is taken before this Christmas season, Blu-ray will join all the other failed consumer media formats like SACD, Laser Disk, DVD-Audio and the PSP’s UMD. Most new formats fail - Blu-ray’s claim to fame is that it will be, without a doubt, the costliest such failure in history.

What can the BDA and the vendors do to turn it around? How about:

Time is short. Timid incrementalism will kill you.

Comments welcome, of course.

June 10th, 2009

Apple's MacBook flop - fixed!

Posted by Robin Harris @ 6:38 am

Categories: Marketing

Tags: Apple Macintosh, Apple MacBook, Apple Inc., Pricing Strategy, FW400, Notebooks, FireWire, Hardware, Notebooks & Tablets, Consumer Electronics

6 months ago I asked: Apple’s new MacBooks: flop or fiasco? Apple answered “flop” by backpedalling on pricing, the unibody and FireWire - in record time!

The big loser? Microsoft’s successful ads focused on price. Maybe that’s a card you don’t want to play.

Pricing
The 32% price cut on the slightly upgraded SSD MacBook Air - 1.86GHz to 2.13Ghz - is just a down payment. The big news is the new price point for the 15″ MacBook Pro: $1699 - down 15%.

These new price points are permanent. Despite the myth that Apple doesn’t cut prices, they have moved price points down many times over the years.

But other price drops - and the aggressive “buy a MacBook, get an iPod Touch” offer - portend even more pricing actions for the Christmas season. Apple isn’t about to let Mac momentum die. This is good news for all consumers - Mac and PC.

Unibody
Last November I called the unibody “a costly addition that no one was asking for.” And guess what: no more unibody MacBooks. MacBook Pro’s yes. But now the name MacBook is only on the plastic model.

That’s a great move. Apple needs a price-optimized entry level system. Expect to see even more aggressive pricing on MacBooks now that there are 2 visually distinct brands again.

Firewire
Not widely used on PCs, FireWire is the preferred interconnect for high-speed Mac peripherals. Not only is it faster than USB, but the spec supports up to 45 watts of power at up to 30 volts - great for powering external drives, mixers and other devices without another power brick.

On the new 13″ unibody MacBook Pro FireWire has returned in an even faster 800Mb/s version. An adapter will connect existing 400Mb/s devices.

And on the low-end MacBook? FireWire 400 never went away.

The Storage Bits take
The econoclypse has sobered up Cupertino: Microsoft’s campaign made price an issue that Apple couldn’t ignore. And they didn’t.

Apple doesn’t need price parity with Wintel to keep their business healthy and growing. These price drops affect people at the margin: people who wanted a Mac but found the lure of a lower price too tempting. Some of those folks will now buy a ‘Book.

The big lesson is for Microsoft. The marketing adage, “Win on price - lose on price” applies here.

With the iPhone on a major roll and Mac margins that are the envy of the PC world, Apple is well-positioned to play the price game. Macs get top ratings from Consumer Reports because regular folks like them better - if they can afford them.

Longer term, Wintel has no choice but to build better products - or become the General Motors of the PC world.

Comments welcome, of course. Sure, USB claims “480Mb/s” but that’s bidirectional bandwidth. FW400 is faster and FW800 is way faster. But USB 3.0 is coming next year. . . . And BTW, who is shipping those 500GB 7200 rpm notebook drives? Haven’t seen that announcement.