'I'm a PC' Marketing Pays Off for Microsoft, OEMs
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News Analysis. Microsoft and its partners are reaping big rewards from the $300 million Windows marketing campaign. |
[Editor's Note: Please read the companion post at Apple Watch. Together, the two posts offer full analysis of February Windows PC and Mac sales data and six charts (three per post).]
That's my conclusion after reviewing February U.S. retail PC sales data released by NPD on March 16. Apple's steep U.S. retail sales declines continued in February, comparatively worse than January's already dismal showing. Meanwhile, Windows PC sales continued their recent year-over-year growth rally.
The contrast is startling. U.S. retail Windows PC unit sales rose 22 percent year over year in February compared with a 16.7 percent Mac sales decline. By revenue, Windows PCs posted modest 1.4 percent growth, compared with a stunning 23.3 percent Mac revenue decline. It's not a Mac bloodbath, but massacre.
Many financial analysts point to pricing as the major reason for Mac declines. In February, the average selling price for Macs was $1,500, down from $1,628 a year earlier but up from $1,482 in November. Consumers and small businesses must pay more to join the Mac club than to continue using Windows PCs during a recession.
High Mac pricing is an easy answer to Apple's woes. The economic crisis started in September, sending Mac growth gains downward over the next four months (Mac sales were down in January, too). But that easy answer doesn't explain why Windows PC sales are posting strong year-over-year growth by comparison. Pricing is no single answer. Windows PC ASPs dropped from $668 to $555, February to February, but only $572 from November. Those declines aren't substantial enough to explain the dramatic sales growth surge from November to February.
I see three factors benefiting Microsoft and its OEM partners. In order from least to most important:
- Some cost-conscious would-be Mac switchers are choosing cheaper Windows PCs.
- Netbook sales are rising, giving additional uplift to Windows laptop sales.
- "Windows. Life Without Walls" marketing is doing what it's supposed to.
Smallest influencer: Apple's iMac starts at $1,199 and MacBook at $999, which are stiff entry-level prices in this economy, considering also how much less it costs to buy Windows PCs. Where pricing hurts Apple: lost switcher sales, but nowhere enough to explain Windows PC sales gains.
Somewhat larger influencer: Netbook sales have pushed up Windows notebook sales and driven down Windows laptop ASPs, from $717 to $560, February to February, and $589 since November. But even removing netbooks, Windows PC laptop unit sales were up year over year in February.
The biggest influencer: marketing, as I interpret the data. Around September, the U.S. economy officially hit crisis state, with consumer spending dropping in nearly every category over the subsequent five months. Around the same time, netbooks started a big sales surge, in the fourth quarter doubling sales from all the rest of 2008, according to IDC. But something else happened in September: Microsoft launched the first wave of "I'm a PC" commercials as part of its "Windows. Life Without Walls" campaign.
What have I been saying for months? Marketing matters. People buy products that they see advertised. Their awareness increases, as does potential emotional connection to a brand and/or product. During the worst days of Windows Vista sales, Microsoft did no marketing. But since September, Microsoft has consistently advertised Windows and supporting software, like Windows Live Photo Gallery.
I've been lukewarm to the "I'm a PC" campaign. But it's water in the advertising desert, and so brand revitalizing. Microsoft reminds consumers and businesses that Windows matters to them, and they get something to belong tothe Windows clubby proclaiming "I'm a PC." The Windows club is larger, by the way, and cheaper to join than the Mac club.
But Microsoft marketing isn't enough to explain Windows PC sales growth gains in these hard economic times. Soon after "I'm a PC" commercials started airing, Apple's "Get a Mac" ads largely disappeared. Apple continues to aggressively market its products, but with greater emphasis on iPhone and a shift to the newer "green" Mac campaign and away from "Get a Mac."
Apple's green marketing has a short tail, I assert. The 17-inch MacBook Pro advertising is compelling but really approaches a niche market of buyers with the philosophical commitment and financial means to spend $2,800 or more on a new computer. Apple is sure to grab short-term sales, but that's it.
Meanwhile, Microsoft courts the mass market of buyers. Everybody else. Many people are afraid because they're uncertain about employment, finances and the future. They need reassurance, comfort. Windows is reassuring because it's something most people know; they've used it somewhere. Microsoft is a safe company, founded by a self-made billionaire turned philanthropist. None of that "safe" messaging is in Microsoft "I'm a PC" marketing. It doesn't have to be. There's Microsoft corporate history behind it.
Ask around. I have. Ask yourself. I know lots of people worried about losing their jobs who recently bought new Windows notebooks. They can't rely on having a work PC forever. They're afraid for their jobs and looking to make a new economic start. Small business technology spending may be down among established companies. But walk your neighborhood and see who's working for himself or herself using a pretty new Windows laptop. There's a spirit of entrepreneurship that many Americans associate with Windows and Microsoft. The recession is bringing it out.
Microsoft's Windows Phone "Start" marketing taps into this entrepreneurial spirit. Microsoft should do more of it with "I'm a PC."
As for Apple, its sales problems can all be fixed by improved Mac marketing:
- Go after the switchers: Start advertising iLife `09 as the application no one can live without. How about TV commercials showing OneRepublic or Sting music lessons?
- Market iPhone as the better netbook. It costs less and offers more; no keyboard required. The iPhone is always on, and data plans cost less than those for netbooks and without 5GB usage caps.
- Retire "green" advertising and bring back the mass-market Mac advertising; it doesn't have to be "Get a Mac," but something.
Microsoft should learn something from "I'm a PC": Marketing matters. It matters even more when times are tough.
[Please send your tips or rumors to watchtips at gmail.com.]
Related Posts:
- Start Windows Phone Marketing, Microsoft Watch, March 13, 2009
- Bring on the Ads, Apple, Apple Watch, March 10, 2009
- New Mac Pricing Is Bold, Brassy and Risky, Apple Watch, March 3, 2009
- If PC Sales Are Down, Can Macs Go Up?, Apple Watch, March 2, 2009
- The Windows Empire Strikes Back, Microsoft Watch, Feb. 19, 2009
- Mac Sales Fall Below PCs, Apple Watch, Feb. 18, 2009
- Start Windows, Microsoft Watch, Feb. 16, 2009
- How Apple Raised MacBook Prices, Apple Watch, Oct. 14, 2008
- Mac Laptop Retail Share: 35% Measured in Dollars, Apple Watch, Sept. 26, 2008
- Apple Demands a High Price to Be Cool, Apple Watch, Sept. 26, 2008
- Putting Mac Selling Prices in Context, Apple Watch, Aug. 8, 2008
- Vista PCs: These Prices Are Insane!, Microsoft Watch, Aug. 5, 2008
- Should You Pay Twice as Much for a Mac?, Apple Watch, Aug. 5, 2008
- Can Price Cuts Get Apple 10% Share?, Apple Watch, July 23, 2008


Comments (44)
Admittedly, I'm a geek. But here's my personal reason why...I'm a PC. I went to Fry's yesterday because we need a new computer for our house. We have a newish Sony Vaio all-in-one machine but need another for the kids and for my wife or I when the other is using the Sony. I first walked through the Mac department and lusted after the pretty hardware. But then I played around with MacOS and remembered why I find it annoying. It's not as usable as Windows or even simple Linux distro's like Ubuntu in many ways. The Mac department had the usual selection...a few different sizes of iMacs, a couple of Mac Mini configs, the laptops and the big workstations. A total of about 8 or 9 models.
Then I walked through the PC department where I found...at least 50 or 60 different systems. Dozens of laptops from several manufacturers with a wide variety of features. Dozens of desktop PC's with a huge variety of configurations. It was truly amazing how many options I had.
Then I found myself in a part of the store that you'll never ever see in an Apple Store: the build your own PC department. I found the components that I could use to build practically any possible configuration that I could want. I ended up buying the parts. For $380 including tax I bought a nice looking chassis with a built-in power supply, a decent motherboard, a Intel Core 2 Duo...I think 2.3 Ghz, 4GB of RAM, a 200GB hard drive, a DVD drive and a network card. For $390. I went home and had the thing running Windows 7 in about 2-1/2 hours including break time during OS installation.
That's something Apple will never let me do. I'm a PC because I like choice and freedom. ;)
Posted by Mark Ashton | March 16, 2009 7:30 PM
Wow.....
Telling apple to learn from MS marketing. MS marketing sucks and the whole I'm a PC thing is a bad joke.
Here's why windows sales are up... good hardware sold dirt cheap. Apple systems are priced at a premium. And the argument could easily be made that Macs are worth the extra cabbage.
But a lot of people simply look at the price tag and the specs, buy the cheaper system and move on.
The only problem I see with Mac marketing is that 90% of it is just snide MS bashing. They don't tell you what's good about the Mac, they just tell you what's "bad" about the other guy. The commercials for the macbook air were golden. Artfully done and to the point. They didn't even mention MS.
Posted by Massive Quasars | March 16, 2009 7:33 PM
Admittedly, I'm a geek. But here's my personal reason why...I'm a PC. I went to Fry's yesterday because we need a new computer for our house. We have a newish Sony Vaio all-in-one machine but need another for the kids and for my wife or I when the other is using the Sony. I first walked through the Mac department and lusted after the pretty hardware. But then I played around with MacOS and remembered why I find it annoying. It's not as usable as Windows or even simple Linux distro's like Ubuntu in many ways. The Mac department had the usual selection...a few different sizes of iMacs, a couple of Mac Mini configs, the laptops and the big workstations. A total of about 8 or 9 models.
Then I walked through the PC department where I found...at least 50 or 60 different systems. Dozens of laptops from several manufacturers with a wide variety of features. Dozens of desktop PC's with a huge variety of configurations. It was truly amazing how many options I had.
Then I found myself in a part of the store that you'll never ever see in an Apple Store: the build your own PC department. I found the components that I could use to build practically any possible configuration that I could want. I ended up buying the parts. For $380 including tax I bought a nice looking chassis with a built-in power supply, a decent motherboard, a Intel Core 2 Duo...I think 2.3 Ghz, 4GB of RAM, a 200GB hard drive, a DVD drive and a network card. For $390. I went home and had the thing running Windows 7 in about 2-1/2 hours including break time during OS installation.
That's something Apple will never let me do. I'm a PC because I like choice and freedom. ;)
Posted by Mark Ashton | March 16, 2009 7:34 PM
Admittedly, I'm a geek. But here's my personal reason why...I'm a PC. I went to Fry's yesterday because we need a new computer for our house. We have a newish Sony Vaio all-in-one machine but need another for the kids and for my wife or I when the other is using the Sony. I first walked through the Mac department and lusted after the pretty hardware. But then I played around with MacOS and remembered why I find it annoying. It's not as usable as Windows or even simple Linux distro's like Ubuntu in many ways. The Mac department had the usual selection...a few different sizes of iMacs, a couple of Mac Mini configs, the laptops and the big workstations. A total of about 8 or 9 models.
Then I walked through the PC department where I found...at least 50 or 60 different systems. Dozens of laptops from several manufacturers with a wide variety of features. Dozens of desktop PC's with a huge variety of configurations. It was truly amazing how many options I had.
Then I found myself in a part of the store that you'll never ever see in an Apple Store: the build your own PC department. I found the components that I could use to build practically any possible configuration that I could want. I ended up buying the parts. For $380 including tax I bought a nice looking chassis with a built-in power supply, a decent motherboard, a Intel Core 2 Duo...I think 2.3 Ghz, 4GB of RAM, a 200GB hard drive, a DVD drive and a network card. For $390. I went home and had the thing running Windows 7 in about 2-1/2 hours including break time during OS installation.
That's something Apple will never let me do. I'm a PC because I like choice and freedom. ;)
Posted by Mark Ashton | March 16, 2009 7:37 PM
Given that more than 90% of netbook sales are _outside_ the US, concentrating too much on US market trends means you’re missing the big picture.
Posted by Lawrence D'Oliveiro | March 16, 2009 7:56 PM
Mac computer sales fall in a bad economy as the Internet is plastered with rumors of new models coming soon - coupled with news everywhere of Windows 7 not sucking as badly as Vista (and that people will not be able to upgrade directly from XP).
These are the primary reasons for the numbers for Macs and Windows PCs. Microsoft marketing is too ineffectual to take any of the credit.
Microsoft is in real trouble; few software releases coming out will honestly compel cash-strapped companies to move to updated versions of products (Server 2008, Exchange 2007, SQL 2008, Office 14, etc.)
It will not be Apple nor Google that ultimately takes down Microsoft, it will be Microsoft themselves.
The sales numbers that were posted are meaningless in the longer-term future of Microsoft. Only a radical change of products, development processes, and yes, marketing (along with a great deal of luck) will turn Microsoft around.
Apple was able to make this radical change in 1996 with the purchase of the NeXTSTEP as the foundation for the new Mac OS (OS X) and the return of Steve Jobs. But the result is a company that bears little resemblance to where Apple was in 1995.
Posted by Paul Hurley | March 16, 2009 9:56 PM
I seriously doubt it was the "I'm a PC" marketing. Bet it has more to do with the surge in popularity and dropping price of NetBooks. And the fact that the Christmas shopping season is over so it is mainly business and SOHO types buying machines right now.
Posted by Michael Carnell | March 16, 2009 10:20 PM
Why spend $600 on a 'urinated-poor management' (your words not mine Joe) Mac Mini, when you could invest in a full featured notebook from Dell or HP for $600? Get a compelling set of features in Windows Vista, be able to do all you need with Windows Live Essentials and Windows Live Services. Apple is selling a brand, not a solution. Computers are meant to get things done, connect and communicate. Windows Vista does that exceptionally well.
Posted by Andre Da Costa | March 17, 2009 2:50 AM
Why spend $600 on a 'urinated-poor management' (your words not mine Joe) Mac Mini, when you could invest in a full featured notebook from Dell or HP for $600? Get a compelling set of features in Windows Vista, be able to do all you need with Windows Live Essentials and Windows Live Services. Apple is selling a brand, not a solution. Computers are meant to get things done, connect and communicate. Windows Vista does that exceptionally well.
Posted by Andre Da Costa | March 17, 2009 2:51 AM
Why spend $600 on a 'urinated-poor management' (your words not mine Joe) Mac Mini, when you could invest in a full featured notebook from Dell or HP for $600? Get a compelling set of features in Windows Vista, be able to do all you need with Windows Live Essentials and Windows Live Services. Apple is selling a brand, not a solution. Computers are meant to get things done, connect and communicate. Windows Vista does that exceptionally well.
Posted by Andre Da Costa | March 17, 2009 2:55 AM
...and it's of course un-thinkable that some people may just think that PC's are a better overall value than Macs and that the OS X hype is just coming to an end, with Win 7 shooting the final shot.
Posted by evang | March 17, 2009 3:00 AM
Take 1 cheapo Windows PC from OEM. Take a Mac Mini. Take both apart and examine what you are getting for your money. The Mac Mini is a feat of engineering with quality parts, it is natural that it would cost more than a generic laptop made to a conventional design with the cheapest parts available. Ignore the OS, the hardware is far better quality.
Andre, you need to point to a place where I can download this compelling set of features. I have one of those $600 laptops with Vista and it is not very compelling. In fact I gave it away. I still use the Mac daily though because it fits behind my monitor, does not get in the way and is useful. If I can get some compellingness then I will get my creaky laptop back.
Posted by billybob | March 17, 2009 7:14 AM
Huh? I must have missed something. Yeah, that's it - the link between the ad and the figures. This sounds like the sort of spin that managers use to claim an undeserved bonus.
Posted by Anonymouse | March 17, 2009 9:50 AM
Huh? I must have missed something. Yeah, that's it - the link between the ad and the figures. This sounds like the sort of spin that managers use to claim an undeserved bonus.
Posted by Anonymouse | March 17, 2009 9:52 AM
Sorry for repeat posts. Some sort of wierd Firefox error probably. By the way, what's with the cross-site scripting error on Microsoft Watch when using IE8? IE bug or a coding error on your site?
Posted by Mark Ashton | March 17, 2009 12:30 PM
Let’s see, the Mac top-of-the-line 17” laptop doesn’t have Blu-ray, doesn’t have dual hard drives, doesn’t have HDMI, doesn’t have SATA, doesn’t have 4 USB ports, its video processor overheats (duh, what do you expect in an ultra-thin chassis), and oh, it costs over $3,500.
The grey brushed metal look is getting very tired.
The competing HP laptop has an 18.4” screen (about 15% larger), all the above features, and costs $1,419. That’s less than half.
Posted by Nicholas Bedworth | March 17, 2009 1:27 PM
billybob :
Take 1 cheapo Windows PC from OEM. Take a Mac Mini. Take both apart and examine what you are getting for your money. The Mac Mini is a feat of engineering with quality parts
No BIlly it's just a PC jammed into a little box. Once you get over the fact that it's jammed into a little box what do you have? You can get small for factor systems from any number of vendors and save money.
I'm suprised someone like you would get suckerd into that "it looks pretty" idiocy.
Posted by Massive Quasars | March 17, 2009 2:36 PM
billybob :
Take 1 cheapo Windows PC from OEM. Take a Mac Mini. Take both apart and examine what you are getting for your money. The Mac Mini is a feat of engineering with quality parts
No BIlly it's just a PC jammed into a little box. Once you get over the fact that it's jammed into a little box what do you have? You can get small for factor systems from any number of vendors and save money.
I'm suprised someone like you would get suckerd into that "it looks pretty" idiocy.
Posted by Massive Quasars | March 17, 2009 2:37 PM
@Massive Quasars
Once you get over the fact that it's jammed into a little box what do you have?
An overpriced under-featured piece of shit?
Posted by CC.Torment | March 17, 2009 2:41 PM
It's OK, the HP is good too if you cannot afford an Apple. I know there is a recession on and high priced consumer goods are not for everyone at the moment.
The Mini is actually a laptop jammed into a little box FYI, that's why they cost a little more than the PCs jammed into medium sized boxes with massive fans.
Posted by billybob | March 17, 2009 2:54 PM
Let’s see, the Mac top-of-the-line 17” laptop doesn’t have Blu-ray, doesn’t have dual hard drives, doesn’t have HDMI, doesn’t have SATA, doesn’t have 4 USB ports, its video processor overheats (duh, what do you expect in an ultra-thin chassis), and oh, it costs over $3,500.
The grey brushed metal look is getting very tired.
The competing HP laptop has an 18.4” screen (about 15% larger), all the above features, and costs $1,419. That’s less than half.
Posted by Nicholas Bedworth | March 17, 2009 3:13 PM
There will always be a war with mac and pc. Just like intel and amd. Some ppl think that the intel chip is better. some ppl think that the amd chip is better. its all personal preference.
Posted by I am the man | March 17, 2009 4:20 PM
@billybob:
Have you noticed all the triple and double posted comments from different users (although most likely the same user, the one that gets free laptops from M$ for sayings nice things about them).
While I sort of like Mac computers, I am not a fan of Apple Corporation. They are too much like M$ for me. I noticed the double post comment by Nickolas, was without links or proof, similar to our resident M$ poster, the Jamaican $hill, who also triple posted. While Nickolas might be right, as I do not own a Mac, I do have a friend who owns a Mac Pro laptop with a 17" screen for about 2 years now. The friend says it has hdmi, sata, and usb as well as firewire plugins. I think he paid $2600 for it back then. I do wonder if it does indeed have hdmi on it, as the friend could be confused on that. Neither will I provide links, as its not mine place to defend Mac, its just I hate the way that Jamaican sock puppets tell their twisted little lies and try to get away with them. Speaking of which, the sock puppet troll cctormet is back about the same time as our Jamaican blog for laptops guy came back. Coincidence, I think not.
Now that we can ignore the shills, we can discuss the post by Joe.
Back about 2 months ago, I commented here that Apple might have to cut the price of Mac's. Its more than a recession people, no matter what the gov whats to call it, it really is a depression now. Maybe not as bad as 27, but its more than a recession, as such, Apple has already milked all the high end money it could without lowering prices. Now Apple might not lower the price of its best laptop, but everything else needs to drop in price. In this a agree with the shills here, Mac's are too expensive, especially for the times. If Apple continues to keep the price up, it will be a disaster for them about the same as Vi$ta is for M$.
Speaking of disasters for M$:
3 reasons Microsoft shouldn't port Windows to ARM processor
http://www.computerworld.com.au/article/280222/3_reasons_microsoft_shouldn_t_port_windows_arm_processor
"Proponents say ARM's low power usage and low cost will enable a new wave of smaller, less expensive (sub-US$300) netbooks that can run all day on a single charge."
--------------------------------------------------
Even should M$ decide to port Windows to Arm, they would also have to port all the apps and games as well. And if they were to do this, would it be profitable for them? After all, someone who buys a $200 Arm laptop is not going spring big bucks for M$ Office are they?
Windows CE or Mobile is also a bad choice to put on the Arm for M$. People want a real OS, not a cell phone OS. Besides, if M$ makes available an OS of any sort for the Arm, it may make their partner Intel very unhappy.
Posted by chips b malroy | March 17, 2009 5:13 PM
Joe,
Your analysis is probably close to the mark. In a steeply down economy, expensive Mac's, no matter how compelling, will suffer significant drops in sales. Personally, I would like to know how the new Dell Adamo compares to Apple's MacBooks in about six months and then compare their slim hybrid studio PC which is comparable to the Mac Mini.
Also, once W7 and WM6.5 with Zune services ship in the 2nd half of the year, M$ will have good reason to amp up the marketing. W7 should fix nearly all of the perception problems of Vista, while WM6.5 will give M$ a near comparable UI to the current iPhone and Andriod releases. Granted, Apple, Google, RIM, and Palm will quickly put some distance between themselves and M$ by year's end as they release newer versions, but hopefully we'll see WM7 not slip past April '10 or possibly move forward just a bit. Either way, you are right in that M$ has to start taking consumer centric TV advertising seriously.
Posted by jay | March 17, 2009 6:14 PM
@chips b malroy :
Don't be ridiculous.
The triple posts are happening because the server keeps dropping requests. It's been happening for days now.
Is everyone who says anything less than damning about microsoft Andre?
Paranoid much?
Posted by Massive Quasars | March 17, 2009 6:18 PM
Internal Server Error
The server encountered an internal error or misconfiguration and was unable to complete your request.
Please contact the server administrator, systems@developershed.com and inform them of the time the error occurred, and anything you might have done that may have caused the error.
More information about this error may be available in the server error log.
____________________________________________
You mean like this? Jeez I did'nt even fuckin know I was Jamaican. Cool.... always wanted dreds.
Posted by CC.Torment | March 17, 2009 6:22 PM
@Jay
W7 should fix nearly all of the perception problems of Vista
Unless MS dorks the release up by trying to rush to market. Like they did with vista.
Posted by Massive Quasars | March 17, 2009 6:28 PM
I don't think the data supports the conclusion that Microsoft's marketing effort is driving sales up. You also need to look at units sold. Looking at the February figures in the NPD report, we see that notebook PC sales in units sold are up an astonishing 36% year-over-year. Meanwhile, desktop PC sales in units sold are down 10%. Total of PC desktops and laptops units sold is up 22%. But revenue is up a paltry 1.4% - a huge drop in revenue per unit sold!
I have seen netbooks with XP on sale at large on-line retailers, for example, NewEgg, at the same prices as comparable units with Linux. I suspect that Microsoft is offering kickbacks in the form of marketing agreements to these retailers.
Rather than Microsoft's marketing, I think that people are replacing aging desktops with notebooks and purchasing netbooks as an additional computers for carrying in a backpack to school or when traveling. The revenue per unit sold is falling drastically. My estimate is that for netbooks, with the cost of the marketing incentives included, motivated by the imperative to maintain market share, Microsoft is subsidizing the cost of Windows to the point that they actually lose money per unit sold. This, rather than Microsoft's advertising, is driving the increase in units sold and plummeting revenue per unit.
Posted by Karl | March 17, 2009 6:48 PM
Linux adoption boosted by downturn
http://www.channelweb.co.uk/crn/news/2238569/linux-adoption-boosted-downturn
"The economic downturn is fuelling growth of the Linux market, according to a poll conducted by IDC last month.
The research - which was sponsored by SUSE Linux owner Novell - found that more than half of the 300 IT executives surveyed planned to accelerate Linux adoption.
More than two-thirds (68 per cent) said they are either evaluating or have already decided to increase Linux adoption for the desktop. The equivalent figure for servers was even higher, at 72 per cent."
Posted by chips b malroy | March 17, 2009 10:45 PM
Microsoft Marketing? Please. It's cost and only cost. But then you knew that.
Posted by Terry | March 18, 2009 1:25 AM
The first netbooks came out around 2007 did not have windows. Microsoft had to modify windows to get it to run.
Posted by Stephen Eling | March 18, 2009 1:37 AM
The first netbooks came out around 2007 did not have windows. Microsoft had to modify windows to get it to run.
Posted by Stephen Eling | March 18, 2009 1:38 AM
@Karl,
"I suspect that Microsoft is offering kickbacks in the form of marketing agreements to these retailers."
From what I have read, Microsoft have been charging OEMs around $12-13 for XP to run on netbooks. That's a big discount, and is a reflection of the fact that they are desperate to deny Linux market share. (They have been partially successful, as Linux now has "only" 30% of this rapidly growing segment of the PC market). The conclusion to be drawn is that the Microsoft milch cow is running dry, and the days of MS charging a monopoly rent (and having profit margins of 70-80% as a result) are coming to an end. This is the realisation of Microsoft's worst nightmare - they are in a price war with a product that is free (as someone astutely observed, if they want to know how that will turn out, they should ask Netscape ;-)
Microsoft spent many years and billions of dollars developing Vista, which, as we all know, turned out to be a miserable excuse for an OS and an abject failure by most measures. During this time Linux continued to improve in leaps and bounds, with the result that it now offers an even more compelling value proposition when weighed against the bloated and bug-ridden virus magnets that Redmond still offers up with a straight face.
It seems that Microsoft have less cash in the bank than they used to, and one of the reasons why is that have been burning it up to prop up their position. They have shills and astroturfers touting the merits of their substandard software, and they have any number of tame journalists and compliant publications. Perhaps they have even purchased influence in high places. However, if they have to buy their friends, what will they do when the money runs out?
Posted by Hugh | March 18, 2009 5:30 AM
The crucial fact is that this is NPD data, and I understand NPD only get information from third party bricks and mortar retailers for Apple. No mail order, no Apple stores; no internet sales. It's quite believable for this channel to go light on Apple PC's at this time of year; Apple really only needs the extra channel for the Christmas season and for iPods.
It's certainly noting to do with Microsoft's advertising!
Wait for Apple's next earnings report to know the whole truth.
Posted by sleepy | March 18, 2009 5:48 AM
You aren't giving ANY evidence of a causal relationship between the marketing and the numbers. And I say that as a Mac guy AND an ad guy who actually thinks the I'm A PC campaign is smart. I think it may be having a small impact, but no way it's the biggest contributor. I'd put the biggest contributor at the fact that Macs tend to be bought by individuals and PCs have a significant base in businesses. Individuals stop their spending immediately when times get tight. Businesses may cut back, but they have to keep their equipment up to date. And money has already been budgeted. In short, my guess is that the primary driver in the difference is that Macs are discretionary purchases. And I'd put pricing at #2. Some potential switchers need a new computer and will quell the impulse to buy a Mac to save some cash in tight times. And some Mac folks will even switch if they are in a situation that requires it.
Posted by bighowdy | March 18, 2009 12:28 PM
@bighowdy:
Although not explicit, Joe's argument is that Microsoft is advertising. Apple has stopped. Revenue for PCs is increasing. Revenue for Macs is decreasing. All other things being equal, advertising caused the difference.
There are a number of problems with the assumption, "All other things being equal."
My point, also not explicit, is an "econ 101" argument. The supply curve shifted left. Manufacturers were willing to supply more computers at lower prices. As prices drop, the supply curve and demand curve intersect at a higher level. The eye-popping 36% increase in notebook sales, measured in units, year-over-year in February was caused by the shift in supply. Apple did not offer notebooks in the $200-$500 price range that drove these sales. Presence or absence of advertising did not cause the change. The availability of cheap notebooks and netbooks caused the change.
While granting that the plural of "anecdote" is not "data", nonetheless I am in the February statistic. I bought a SuSE Dell Mini-9 in February when the price hit $199. At that price the utility of having an ultra-portable, in addition to the computers I already owned, equaled or exceeded the cost. Therefore, I jumped in. I suspect that many buyers were, like me, getting an additional computer, adding a netbook to an existing laptop or adding a notebook to an existing desktop. Units are up because the supply curve moved to the left. The huge increase is at the low end. That's why revenues are flat despite increased shipments. Margins are razor thin. It is imperative that Microsoft subsidize the netbook market lest "average Joe Six-Pack" discover that Linux is sufficient. As Hugh humorously notes, "This is the realization of Microsoft's worst nightmare - they are in a price war with a product that is free (as someone astutely observed, if they want to know how that will turn out, they should ask Netscape ;-)"
Additionally, the source of the NPD data for Apple, as sleepy points out, and the difference in consumer and business choices, as you point out, further undermine the "all things being equal" assumption of the article's argument.
Posted by Karl | March 18, 2009 1:31 PM
only a total loser would buy windows pcs.
Posted by Bill Gates | March 18, 2009 5:45 PM
Buy more Macs or I'll die.
Posted by Steve Jobs | March 18, 2009 8:27 PM
People won't use Linux even for free. I can't GIVE this shit away.
Posted by Linus Torvalds | March 18, 2009 8:28 PM
That's "GNU/Linux", Linus!!!!!!!! ;)
Posted by Richard Stallman (not) | March 19, 2009 1:57 AM
Ubuntu just works. Even I use it nowdays.
Posted by Steve Ballmer | March 19, 2009 1:04 PM
Apple is horrible. My wife has a laptop $2000, and it runs likeeee 5 important apps? $2000 for this crap? I would rather buy a $500 Wintel laptop and put the rest $1500 in property taxes that i can get deductions on. Depreciating assets are worth pennies in this credit crunch.
Posted by Jim Wilcox | March 23, 2009 6:26 PM
@Jim,
Hmmm. Depends on what you want it for. Since Apple is the high-end graphics leader of PCs, let's consider HD video, and let the rest of the commenters consider profanity and subhuman grammar to be their primary uses for a PC.
$800 for the WinTel lapttop with 3 or 4 GB of RAM, and $1200 for Adobe Premier = Buggy but gets the job done if you have near-infinite patience.
$2000 for the MacBook and $200 for Final Cut Express (with iDVD included as part of the DVD burning step) = Rock-solid and smooth.
Pretty close to par, price-wise, depending on exact hardware configurations and my rather hasty guesses on hardware costs. But the Apple is light-years ahead of Wintel when it comes to home High-Definition Video production.
But if one's goals include browsing, email, using 0.0005% of Office 2007 to write shabbily-crafted documents, and posting a steady stream of vile obscenities on Microsoft Watch just to prove that the eWeek web staff are under-staffed and incompetent, then a $200 netbook running Linux is more than enough, and you could put $300 more into your property taxes! Whee!
Posted by Philosopher | March 23, 2009 9:46 PM
And I still get the 500 Internal Server Error when posting to this site. Did the eWeek staff get beamed back to their home planet and leave in charge of the site a bunch of monkeys with a love for vulgar profanity?
This site is no longer microsoft watch. It's now:
500 Internal Server Error Watch.
"Internal Server Error
The server encountered an internal error or misconfiguration and was unable to complete your request.
Please contact the server administrator, systems@developershed.com and inform them of the time the error occurred, and anything you might have done that may have caused the error.?
More information about this error may be available in the server error log."
If it weren't for the real and useful links posted by chips b malroy, this site and its tolerance of filthy-mouthed scum wouldn't be worth the bits it takes up on a disk somewhere.
Posted by Philosopher | March 23, 2009 9:54 PM