Meet Lauren
A new commercial from Microsoft:
Microsoft has begun a new ad campaign focused on pricing differences between Macs and PCs. The most prominent piece of the campaign deployed so far has been a TV commercial in which “Lauren” is given a $1000 budget with which to find a 17“ notebook computer. After a brief stop at a ”Mac Store“ where she comes away empty-handed noting that the only computer available for under $1000 has a 13” screen and saying “I’m just not cool enough to be a Mac person,” she settles on a $699 HP notebook from Best Buy.
Of course, they don’t show Lauren a year and a half later after her dirt-cheap notebook has suffered numerous breakdowns and other problems, and Lauren is about ready to climb into her phone and strangle the customer support people. Nor do they show the hidden costs, such as buying the anti-virus package (nor the speed hit her computer will take from having it running constantly).
The ads are somewhat conflated–why does Lauren need a 17“ screen, for example? Arguably a very uncommon laptop monitor size choice, especially for someone working on a budget–but perfect for an ad campaign designed to show cost differences. They take Apple’s high-end model and compare it with a bare-bones Turion system (that’s the ”speed“ she was looking for?). Had she been looking for a desktop replacement, for example, the Mac Mini would had fared a lot better relative to similar Windows machines offered, and the iMacs would not do too shabby either.
All that said, the commercial is perhaps the best-done PC vs. Mac commercial Microsoft has done–far and away more effective than any often their previous efforts.. They will just have to count on people not looking too closely at their (now usual) legerdemain in the details.
This is the crux of the question. As you well know, I have faced this very thing. I am poor. Very poor, until I pass my bar exam, which might be never, or could have already happened.
I knew going in that a Mac is a much better machine on every level. It cost more, but it arguably is a better value, for now, anyway.
But the numbers in the add don’t reflect the reality. My little brother in Phoenix works for Intel. He knows, better than most, that Apple is a superior product. But even he has P.C.s at home. Last weekend he took my mother to Fry’s and had her buy this:
http://www.frys-electronics-ads.com/ads/2009/03/20/41464/Acer-15-6-Laptop-Intel-Core-2-Duo-Processor-T6400
Even my mother knows that Apples are a superior product. But the calculus lead to her buying a PC Notebook. For $500 dollars she got an incredibly powerful machine that my brother will, at least, know how to fiddle with.
This is a big deal. When they needed a car a year and a half ago, we got them a Hyundai specifically because it has a 5 year bumper to bumper warranty and a 10 year power train warranty. Dutifully they’ve had all there servicing done at the Hyundai dealer to insure warranty compliance, and like the apple, it does cost more, but not that much more. Still when getting a new computer he got her a PC instead of a Mac.
I learned from my Nobel Laureate Economics Professor in Law school that economics is driven largely by transaction costs. The initial transaction cost is much lower for PCs. That gets people to implement the transaction and ignore the long term life cycle cost. That initial transaction cost is also influenced by the fact that people will face a transaction cost of adapting to the new system and perhaps throwing out some of their current investment in software. All of that is transaction cost.
(I should also say, I have free anti-virus software from Avast. It’s good but still it didn’t stop someone from getting access to my gmail account. So the cost is low, but still, the value is not so great either.)
Almost every one knows that Apples are better machines and are probably better values across the life cycle. Historically, the same could be said for Mercedes. Growing up, all the professors in my home town drove around these 20 year old diesel Mercedes. Meanwhile my family went through about a half dozen Chevy’s, Plymouths and Fords. Those Professors coughed up a pretty penny when they bought those machines, but they obviously came out ahead in the long run.
Anyway, this is a very good battle between the two companies, because it reflects, at least, my reality. Maybe Apple will make some moves to attack this one remaining edge that PCs have, and lower the transaction cost to get me into an Apple.
The situation is getting more complex of course. The new Netbooks are available, and their costs are approaching something of a disposable unit. I think that maybe people’s relationship with their machines are going to change. People will have a hub machine that maybe is expensive at home that manages their entertainment and the functions of their house, among other things. Then they’ll have a disposable unit they tote around that they constantly sink with the mother ship at home. Thus when it breaks from being toted around, they’ll just chuck it and grab a new one.
That, I think is a big paradigm shift. I suspect both companies are anticipating this kind of thing, along with a myriad of other possibilities and certainly Apple is well positioned for the hub part of this, but they need to come up with a solution for the spoke. That will be interesting.
This matches my experience also. My Mom, brother and I all bought new laptops recently. We all went PC, because there simply are no Mac’s at the price point we were willing to pay.
Like it or not, Luis, but the reality is that Macs do cost significantly more. Right now, Costco has a 17″ laptop with 4GB of memory and a 320GB hard drive for 700 bucks after rebate.
A 17″ laptop with 4GB of memory and 320GB hard drive from Apple? $2,800.
Yeah, the 700 dollar model is a Turion based machine- considerably slower. So what? The netbook phenomenon has illustrated that people care less about raw horsepower in the CPU than us computer geeks do. They just want the thing to do what they need it for 90% of the time- reading email, browsing the web, maybe a little word processing, etc.
And believe it or not, but if you go with Windows XP and basic software that most folks have, that Windows-based computer won’t have nearly as many problems as you suggest. Hell, even if it does, the $2,100 you saved in buying it can go a long way to paying for tech support!
Windows-based machines beat the stuffing out of Apples when it comes to initial price. Both systems are WAY more reliable than they used to be. Most of the guys I know who have Windows-based laptops haven’t had any issues at all with them.
The reality is that you can’t buy an Apple for less than a grand, but there’s tons of Windows-based machines out there that you can pick up for hundreds less than that, sometimes even a thousand bucks less.
Apple risks believing too much of their own hype. Netbooks- many running Windows XP- are exploding in popularity, and nearly all sell for a thousand dollars less than a MacBook in any configuration.
Microsoft is also running some great ads on TV here in the states featuring little kids doing stuff with their computers. One has the most adorable little girl taking a picture of her fish, plugging the camera into the computer, clicking on the automatic button to improve the picture, then emailing it to her family, tada, just like that… and the ad closes with her saying “I’m a PC and I’m 4 and a half!”
http://www.youtube.com/watch?v=DtilWL4mnhI&feature=player_embedded
But ultimately that initial price is so much lower that Apple ignores it at their own peril.
Yep, I knew I’d get feedback on this one. And I understand fully what you’re all saying. I’m just saying myself that most people looking for a laptop don’t go for a 17-incher. Now, if we want to confine the debate to just that one computer type, I will fully grant you that WIndows machines are the way to go. And I even tell my own students that if they are looking for a really cheap system, or just a system that will let them use only Internet, email, and Word Processing, then Windows machines are probably the better choice for them.
But keep in mind that you do wind up getting what you pay for. When I bought my first Powerbook, the initial cost hurt a bit–but the computer held up very well for the 3-4 years I used it, and when I did sell it, I got $800 for it, which went a good distance to paying for the next laptop I bought.
A co-worker of mine, on the other hand, got a medium-priced Toshiba laptop. After the same amount of time, it’s a worthless piece of junk. Even though my co-worker only used it at home–never took it off her desk, in fact–the hinge broke, lord knows how. And now the computer is so broken down that despite a complete overhaul (wipe the HDD and re-install everything), it barely chugs along enough to support just Avast anti-virus.
My brother’s wife is not a huge Mac fan (she is readily very critical of Apple when she sees a flaw with their products), but she told me that when she buys laptops, Macs are simply more reliable; Windows machines are far more likely to develop problems. The cheap sticker price is, I will fully admit, hard to beat. But when you factor in all the costs over time, that’s where the Macs gain an advantage.
So in the short run, you save a bundle getting PCs; but the point of the article was that after not too long a time, the hidden costs–the “PC tax” as you might call it–starts adding up. And in the end, the resale value on that Mac winds up being a pretty hefty rebate.
Well I happen to be at the Tech Mark today in Yongsan, nosing around. And it occurred to me, that if Apple wants to fight the netbook craze, it already has the product, the Mac-Air. The netbook has three things: cheap price, mobility, and long battery life (its a really good chip) and on top of that, they all run XP! They are perfect for surfing the net, email, for office functions and basic entertainment which is 90% of what 90% of us use Computers for. (I would say that an important sub-market might be gamers, but they prefer PCs for their raw power over price – or so it seems to me).
If Apple came out with a cheap Mac-Air, they could stand the netbook market up on its side because the Mac-Air is a very portable device – and it has larger screen and key boards.
Those are great points Luis. A Mac, like a Honda Accords, have that great resale value.
I figure the half life for my P.C. is usually around one and one half years (batteries are only good for 3 years anyway, but the technology changes are enough before then). That means after one and a half years, it’s getting long in the tooth. I love my current Compaq Presario C500. And it was a steal at $450 (I did get $150 out of my old p.c. though when I bought it, plus a $75 gift from my mother so I shelled out very little) but it is already feeling a bit long in the tooth. I really regret this because I like everything about it so much. Like a 7 year old dog, it’s aging right before my very eyes. However, most laptops end up being thrown out for one reason or another.
The idea that you can get 3 or 4 solid years of service from a computer is really quite awesome. To get $800 for it after those 4 years is really awesome. Again, I agree that the Apple is a much better value over the life cycle of the machine. But that initial transaction cost is a big hiccup. That dollar in the hand is mighty powerful when comparing to all those savings in the bush down the road.
Thing is, Luis, even the smaller screen sizes have comparable price differences. They’re not as drastic as the 17 inch screen, but they’re definitely there.
Tim’s point about the Mac Air is a terrific example. Apple was RIGHT in spotting that people were going to want a much lighter, portable computer that didn’t have an optical drive, was great on battery life, maybe had a smaller display, and was best for doing non-CPU-intensive work or stuff that was “on the cloud” (just wirelessly networking for email, browsing, etc.)
Thing was, Apple rapes customers 1800 bucks for a Mac Air. You can buy an EeePC for 280 plus tax.
This is where Apple gets (and deserves) a lot of criticism. Too often, they positively kill the customer for high profit margin, and the only REAL difference that they’re offering is the Apple OS and the Apple brand. It’s what all the cool kids have, you know.
Well, not if they’re smacking you for 1500 bucks to be cool, they’re not. I hardly EVER see Mac Airs out there, but I’m starting to see a heck of a lot of netbooks. Ginger and I are considering a new computer for her to use when she comes off of furlough and starts flying again (she’s a flight attendant for those who don’t know).
She’s got a Mac Book right now for her main computer. And what is she looking at? A Windows-based netbook that’s around a thousand bucks less than any of Apple’s products.
She loves, LOVES her Mac (we’re a mixed-faith household!) but she just can’t justify the price Apple gets for something that basically needs to be able to browse, email, and is as light as possible (since she has to tote it around for three or four days.
It sounds to me as though Microsoft finally got someone in marketing that is realistic about the market. (You’d think that was a prerequisite, but all too often, it’s not.)
I could not agree more about the MacBook Air, and even in some respects, the iPhone (though subsidies now erase that side of the equation for the consumer). I always tell people to stay away from the Air unless they want to pay serious money for style and weight. There are luxury items which Apple demands a serious luxury tariff, no question.
That, however, is not fully indicative of the entire Mac line, however, especially when we’re talking about the non-pro products. It all comes back to the eventual bottom line. A blogger pointed this out:
Tim’s pointer to the $500 laptop would have at least had a better CPU, but the point of “Lauren’s” (it turns out that she’s an actress and never went into the Apple Store) ad was to focus purely on buying-point price differentials. In the end, you get what you pay for. You buy a cheap Windows laptop, you have to deal with inferior hardware that’s going to be clunkier, harder to use and is going to fail a lot sooner. You have to pay at least with a processor hit for the antivirus, and unless you pirate software, Office is going to cost you a bit more more than iWork. If your time has no value, then you will not mind stripping out the built-in adware or taking the time to fill out the forms and waiting 6-8 weeks for that mail-in rebate. Or dealing with the adware/spyware/malware that gets past even the best of AV software. And your day-to-day using experience–even just from the hardware perspective alone–will be less pleasant. Arguably the software will add to that. And then comes the hardware breakdowns and dealing with customer support, which carries its own tariffs.
Still, as I pointed out in the post, I think we can all agree on one thing: Microsoft finally got around to making an effective ad which hits Macs perhaps the most effectively, especially for these times. This kind of ad it going to pack quite a wallop with a lot of people, and Apple is going to have a tough time countering it.
In a way, it even reminds me a lot of right-wing propaganda for two reasons–first, it makes a lot of quick arguments which sound good on the surface, but which take a lot more effort to debunk; and second, it takes a positive aspiration and turns it into a pejorative (“I’m not cool enough” smacks of “liberal elitism”). While this resemblance is purely subjective, it does kind of make me uncomfortable, as if the ad makers were trying to riff on a theme, taking a successful PR element from the worst of places and capitalizing on it. And the pandering to the “Get Free Cash!” element of the commercial like Lauren had won a game show didn’t help. either.
Here’s a very interesting discussion about the ad by a panel on, of all places, Fox News. It’s a panel of tech writers and they actually come to the defense of the Mac pretty heavily and adroitly. Maybe the host just asked tech writers he knew would all defend the Mac, I don’t know. But they do make good points–worth listening to up to the end.
Look, this just isn’t true. You’re saying it as though it’s a certainty, and it’s not.
I’ve owned two laptops, both Compaqs. The first was a mid-level unit when I bought it; I ran it for about 3 or 4 years, then gave it to my mom, who used it for another 4 years before it met its demise (pop spilled into it and fried the thing).
It ran just fine. I ran Windows 98 on it, then put in some more memory and loaded Windows 2000 on it prior to giving it to her. That was asking a bit; while it met the minimum requirements for Win2000, it was definitely not a machine built for it. Mom didn’t care, though- it served her purposes just fine. Until the soda spill, it was great.
The second Compaq… I still own. It’s several years old now and runs Windows XP. It was a low-end Best Buy loss leader special type of deal- refurbished- but I didn’t care. For $550, very cheap at the time, it did everything I needed. I replaced the battery in it about a year ago, and of course as wireless networking took off I had to buy a wireless-G card for it, but other than that it’s been great.
I even upgraded the memory and later put in a DVD burner (which was stupid, I thought I’d be burning a lot of discs and just haven’t used it for that- but that’s my own fault, not the computer’s!) and it’s still chugging along just fine. It’s been banged around and beaten up a bit; there’s a pixel or three dead on the screen; but all in all, it’s been a great computer.
Yeah, there are people who are going to have problems with x86-based boxes. Same thing with Apples; Ginger’s Mac Book had its hard drive die about three weeks after the warranty ran out. Stuff happens.
(The guy at the shop replaced it anyway- kudos to Apple- then hit on her and asked her out. I’d like to think that he would have replaced the hard drive even if he hadn’t found her attractive!)
I know you’re an evangelist, amigo, but you’re letting ideology blind you to reality. Winboxes are not all utterly useless pieces of crap; in fact, the majority of them run just fine and don’t inevitably turn out to be junk, as you claim.