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Microsoft takes the bite out of Apple

Can the tight US economy help Microsoft beat back the cavalry charge of its much smaller, but much cooler, competitor Apple?

world Updated: Apr 02, 2009 17:45 IST

Can the tight US economy help Microsoft beat back the cavalry charge of its much smaller, but much cooler, competitor Apple?

The software giant from Seattle seems to sense a whiff of opportunity in the air, bombarding the trendy maker of Macs, iPhones and iPods in ads and executive comments for being too expensive in these penny-pinching times.

The latest salvo comes in the form of widely screened TV ads, which show what Microsoft says are real life computer users shopping for new machines.

In one ad a bubbly, red-haired, 20-something named Lauren goes looking for a 17-inch laptop with a $1,000 budget. She walks out of the Apple store empty handed, proclaiming that she's obviously "not cool enough to be a Mac person", since the appropriate machine there would cost $2,000.

But Lauren finds several dream machines at a PC retailer, where she squeals with delight as she pays $699 for her new laptop and pockets $300 in change.

The ad ends with the tagline, "I'm Lauren, and I'm a PC", an unabashed reference to Apple's famous ads where an uber-cool actor portrays an Apple computer while a super nerd plays a hapless PC.

Even before the latest ads, signs were emerging that Apple's exclusive cachet and relatively higher prices were hurting it in the market.

Unit sales for Apple computers were down 16 percent in February while the overall computer market increased by 10 percent, according to a research report by Morgan Stanley. Revenues at the iconic Silicon Valley company were down 22 percent compared to an 11 percent decline for the overall market.

Media experts are divided on whether Microsoft's new campaign can blow a hole in Apple's mythical status, especially as the company's worldwide success with its iPhone and iPod products continues to draw customers into the Apple firmament.

"I don't know what took Microsoft so long," advertising executive Josh Barsch told E Commerce Times. "The biggest chink in Apple's armour has always been its price tag.

"In flush times, the young and hip can afford to shell out more for a trendy machine. When they no longer have jobs and can't pay their rent, it's a different story."

That message is reinforced by other Microsoft ads that feature kids performing all kinds of multimedia wizardry on their PCs.

But some say that Microsoft's ads will ultimately backfire because they bring Apple into every purchase consideration. When users compare features, they could well find that the elegance, functionality and integrated software that are part of the Apple package are worth the extra money.

Recent Mac convert Greg Willis says he has no regrets about the switch. "Everything works smoothly right out of the box because it all comes from the same company," he said. "I'm glad I paid the extra money. I got a quantum leap in quality."

Others are not so sure that the extra expense is worthwhile. They argue that with less money to spend, they can forego the luxury of the Apple experience to save a few bucks. One of them is Jay Siegel, who has owned Macs for 25 years but recently bought a Windows PC as his main work computer.

"I'm getting my work done, using Windows. Surfing the Internet, using a web browser and a graphics programme all work on this computer," noted the self-described Apple fan on

"It may not be elegant or refined but it's getting the job done for me. And it cost so much less. I'm sorry Apple, I just couldn't justify those extra dollars right now. When the economy recovers and I have a bit more cash to spare I'm going to run, not walk, to buy another Mac."

First Published: Apr 02, 2009 17:42 IST