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The Wal-Martification of Microsoft

John Gruber’s analysis of the current state of Windows really struck a chord with me, because it reminded me of an article I read a long time ago about Wal-Mart. (I blogged about it in 2006.) Gruber’s writing about Microsoft’s declining revenue and the recent news that Apple now holds 91% of the retail market for laptops that cost more than $1,000.

Here’s the key bit:

Microsoft is no longer ignoring Apple’s market share gains and successful “Get a Mac” ad campaign. But the crux of these ads from Apple is that Macs are better; Microsoft’s response is a message that everyone already knows — that Windows PCs are cheaper. Their marketing and retail executives publicly espouse the opinion that, now that everyone sees Apple computers as cool, Microsoft has Apple right where they want them.

They’re a software company whose primary platform no longer appeals to people who like computers the most. Their executives are either in denial of, or do not perceive, that there has emerged a consensus — not just among nerds but among a growing number of regular just-plain users — that Windows PCs are second-rate. They still dominate in terms of unit-sale market share, yes, but not because people don’t recognize Windows as second-rate, but because they don’t care, in the same way millions of people buy metric tons of second-rate products from Wal-Mart every hour of every day.

The older article explains why high-end lawnmower manufacturer Snapper stopped selling its products at Wal-Mart. Here’s Snapper’s then-CEO explaining why it was ending the relationship:

“As I look at the three years Snapper has been with you,” he told the vice president, “every year the price has come down. Every year the content of the product has gone up. We’re at a position where, first, it’s still priced where it doesn’t meet the needs of your clientele. For Wal-Mart, it’s still too high-priced. I think you’d agree with that.

“Now, at the price I’m selling to you today, I’m not making any money on it. And if we do what you want next year, I’ll lose money. I could do that and not go out of business. But we have this independent-dealer channel. And 80% of our business is over here with them. And I can’t put them at a competitive disadvantage. If I do that, I lose everything. So this just isn’t a compatible fit.”

The bottom line is that Snapper could not maintain their high quality or their reputation for high quality in a market where price was the main factor in purchase decisions. It doesn’t surprise me that Microsoft’s current Chief Operating Officer came from Wal-Mart.

As I side note, I just went to Apple’s online store and saw that the 17″ MacBook Pro costs $2,499. Then I went to dell.com and built a Dell Precision Workstation M6400 with nearly identical specs — the total was $2,864.


73 Comments

It’s true that comparable specced laptops price about the same, but there’s a lot of low-end market that Apple just (rightly, probably) ignores.

However, a low-end lawn mower is still fundamentally a lawn mower. Windows remains rather different from OS/X, and when people can buy something more expensive, they might stick with Windows. Apple is gaining, though.

I think if Microsoft wanted to make their computers cooler, they’d take note of the fact that a lot of folks buy Macs for their parents (simply because then you don’t have to worry about it getting all virused up, travel to fix it, or walk them through all kinds of byzantine configuration steps).

Apples are for old people.

Posted by Jason! on 31 July 2009 @ 12pm

An alpha-geek friend of mine just bought his first Apple machine last week. He was explaining that it cost about the same as a comparable laptop running Windows, $1700 or so, I think he said.

Based on his quick description, it didn’t sound that much different from the $600 Dell (Insprion 1545) that I bought a few weeks ago.

Man, I hate to sound like a Microsoft apologist, but my $600 Dell does everything that 90% of computer users need. Sure, I’d dearly love to have OSX, but it comes down to basic functionality: I can get done what I need to for $600.

(To be fair, being a software engineer, I have no problem dealing with the occasional complexities and poor designs of Windows that you can often avoid with an Apple)

Or I could just be a cheapskate.

Posted by Stan Taylor on 31 July 2009 @ 2pm

“Apples are for old people.”

LOL – MS would have to avoid showing any college campuses in their ads!

Posted by John on 31 July 2009 @ 2pm

It’s a pretty cool thing to be able to run two (or more) OS’s on a single piece of hardware simultaneously, swapping between them whenever you want. Sure, the virtualization slows things down slightly but 100% of your functionality is there.

This fact alone makes the Mac very very valuable to the alpha geek, programmer, web designer, etc.

Posted by Cameron Barrett on 31 July 2009 @ 3pm

i didn’t realize virtualization was a “mac thing”. it works great with linux…

Posted by Adrian on 31 July 2009 @ 7pm

my $600 Dell does everything that 90% of computer users need

That’s exactly the point. Apple isn’t making machines for the 90%. By focusing on the high-end, they keep a deserved reputation for well-designed hardware, and they don’t get distracted trying to capture every $50 price increment with a different model. Meanwhile, they are making more money with less downside risk than HP or Dell.

The irony is that at the high end–for the same components–Apple makes the best hardware at the lowest prices. Macbook Pros run Windows so well (and Linux well enough) that regardless of your OS preference, if you’re in the market for a high-end laptop, a Mac is the no-brainer choice.

Posted by daveadams on 1 August 2009 @ 7am

I don’t know how well the cheap laptops hold up for home users, but for business I find that cheap hardware offers false value. If I’m buying Windows laptops, I go exclusively for Lenovo Thinkpads or Dell Latitude D-series laptops, because they’re sturdy. The business users I’ve seen tend to destroy lesser laptops fairly rapidly.

Posted by Rafe on 1 August 2009 @ 12pm

That’s exactly the point. Apple isn’t making machines for the 90%.

Daveadams, I agree completely with you; I was just referencing a friend who claimed that their hardware was no more expensive than a comparative Windows machine. I don’t really believe that.

Posted by Stan Taylor on 1 August 2009 @ 8pm

I think Gruber’s points are pretty convincing. Apple’s strategy of targeting the high end of the market has clearly been very successful, while Microsoft’s low-end strategy is losing its profitability. Just ask yourself “How well are BMW and Mercedes doing? How well are Chrysler and GM doing?”

Posted by Andy Baird on 1 August 2009 @ 8pm

Stan: Luckily, you don’t need to believe it. If all you care about is hardware price, you can actually check that perception yourself, and be accurate. Belief doesn’t need to enter into it in the slightest.

Posted by Phil Nelson on 1 August 2009 @ 8pm

The ignorance of Window users is mind blowing; virtualization on a Dell to run OSX? Mac hardware more expensive? Netbook can do anything a Nehalem powered Mac with Final Cut can do? iPhones — running BSD based OSX touch OS — are for old folks? What are Window users smoking? I want to smoke some of that on weekends too.

Posted by Pres on 1 August 2009 @ 8pm

“Apples are for old people.”

I’m young

Apple is Unix ! is Xcode, is objective-C, a reEEAAaally cool language, it’s a lot of cooool opensource software

it’s a reaAAal taste in design and graphics. It’s a loooot of myriad of details, it’s great hardware, it’s EFI and thousand of thousands of crazy hacks

but ALL of that IF YOU WANT !

And yeah , I want a very cool and easy computers, a very unix and graphical computer, a very intelligent hardware and design and simple.

and it’s a mac.

There are no computers like that with HP or Sony or Dell or Acer (I checked : Three times every week and monday I will check AGAIN)

of course it’s expensive, but like you can build a expensive dell with crappy choice and crappy cheap windows, you can buy a mac for the same price, but it’s really great software and good hardware design.

so my choice is simple: it’s the best computers money can buy !

heck I will buy an IBM POWER if they were better, and they are not !

end of story. no debate, no opinion, no nothing. I will change my way when the industry will change ! no need to answer

- “I was just referencing a friend who claimed that their hardware was no more expensive than a comparative Windows machine. I don’t really believe that.”

you should. you can use internet, you can compare price for exactly same hardware and the same weight/battery/quality materials point. of course a crappy huge plastic dell with BIG 17″ (or 18″ screen) will be cheaper. why ?because it is cheap

but it works of course, with windows, it works, it make the same bips than a mac. But they are not better, thinner, good design, quality software and so on.

and it’s a huge problems.

Only Apple , today, makes Great Computers. Only them. If you think about that, it’s a shame.

in 80s, there were Dozens and more of Great Computers, trying to change, to bring better, to bring new wonderfuls ideas.

but now ? only apple and thousand of cheap no-competitors. (NO-competitors, all give up)

As I have to work with computers days and days, I prefer to do that with a pleasant, nice and efficient tool.

and no. I’m not “old”, and if you think about it : os X is also an unix (like a linux)

but yeah, your daddy can use it too.

Posted by oomu on 1 August 2009 @ 8pm

“Apples are for old people.”

It’s more like “Apples are for people without patience for BS.” I am not going to go on the cheap for something I use this much practically every day. It’s an investment with a long-term value not necessarily reflected by a showroom sticker that ignores utility and aesthetics.

Posted by joe c on 1 August 2009 @ 9pm

@Stan Taylor: What you ignore about the 600 dollar Dell is that it is simply not even close to the same league as the Macbook in build quality, general ease of use and setup, software, and possibly even overall hardware quality.

Principally, it’s the same argument you could make with a Toyota sedan or a BMW. All that really matters for a car is four wheels, a reliable engine, and a hospitable interior with a method of climate control. In that regard, nobody could argue the true value of a BMW over a Toyota. Most people are never going to ride the Autobahn, so the “engine power” argument doesn’t resonate to someone who will sit in traffic deadlock every morning and afternoon.

But nobody would legitimately choose the Toyota if they had their druthers. The Bimmer has a multitude of nicety features in the interior and other ease-of-use features that make it a preferable auto if you are willing to enter the premium auto market segment. Do you still see a ton of solidly built Toyotas on the road? Yes, they get the job done and are affordable to first time buyers and young driver’s first car from their parents. But when a person has driven for awhile and developed some personal wealth, they tend to want to move on to a nicer ride and they go to the premium to luxury market (Mercedes, Audi, BMW, etc).

Laptops and desktops aren’t ever going to be as big of a purchase as an automobile, but a similar parallel can be drawn. Many people started out in the mid-90s buying their first desktop PC from Dell, Gateway, Compaq, etc. Later in the late 90s and early 00s, people started moving on to their first laptops…also from the “big box” PC manufacturers. People are starting to use computers more and more, and simple tech specs aren’t their only requirements. Now they are starting to move on to their next laptop or destkop and maybe have had a middling experience. They remember how that Dell’s screen came off it’s hinges after a year or two. They remember the everyday struggle of battling malware and viruses on Windows XP. They realize that they really just use their computer mostly for multimedia and Windows doesn’t really handle the variety of mediums even average people now use day-to-day very well at all.

Then they look at the Mac. They see a computer that is built as solid as a rock. They see an OS that isn’t widely attacked by viruses or malware. Then they look at the iLife Suite and see something that out-classes any media suite on Windows by a mile. They’re sold, it might cost more than an “equal” PC ‘top or box technically speaking, but they see the intrinsic value of the Apple computer.

Posted by rgw on 1 August 2009 @ 9pm

Jason, you really need to get out of the house more often. Or should I say, get away from you Frankensoft piece of crap.

Posted by Brian on 1 August 2009 @ 9pm

they’d take note of the fact that a lot of folks buy Macs for their parents…

Actually, I think a lot of people dump their old mac with their parents. They’re not playing WOW or running Photoshop on them. My mom’s happy with her Craigslist Toshiba, but if not she’d be even happier with my G4 iBook.

Posted by Scott Falkner on 1 August 2009 @ 9pm

“Apples are for old people.”

Really? That would be news to millions of young people. Have you ever actually been to an Apple store?

“Dell Latitude D-series laptops, because they’re sturdy”

I once went through 3 brand new Dell D series in a year. All issued by my company, all up and died one day. I have had good luck with Thinkpads though.

Many technology companies are allowing MacBooks now. Motorola, Oracle, and Cisco are some of them. IT Architects like me flock to them. We don’t have time or interest in dealing with Windows multitude of issues and poor usage of hardware resources. My 15-inch Macbook Pro costs less than my HP w series laptop running XP that I had previously been issued.

Cheap is in the eye of the beholder. I could buy a $600 Dell and hope it survives plus take my time dealing with Windows but that would be a very foolish and not very cost effective decision. Your work must not be worth much to accept that risk. I am far more productive on Mac OS even though I know XP intimately.

Posted by Terry on 1 August 2009 @ 9pm

Jason said:

Apples are for old people.

That is the most absurd statement I’ve read all day. But don’t get too excited — the day’s not over yet.

Over 60% of incoming Dartmouth students are Mac users. Are they the “old people” you’re talking about?

These kids you’re talking about, the ones who are buying Macs for their parents? Most of those kids do that because they own Macs themselves. They buy Macs for their parents because, having used them, they understand the inherent value proposition. This has the added benefit of cutting down on the number of tech support calls that the kids have to field from their parents.

Posted by Justin Mayer on 1 August 2009 @ 9pm

Apple reminds me of Honda in the late ’80s and early ’90s. Honda took off because they had great cars. But the success of a vehicle brand depends on the dealer network. Keep the dealers happy and you sell more cars. What helped Honda was their cheap parts, reliability, and especially small inventory.

A dealer need to keep enough of every model to fill he showroom and have a test model handy, as well as a few of the more popular colours and options to sell. Back then, that was the Accord, the Civic, and the Prelude. That’s it. Dealers could keep a near full inventory with a small space, and customers didn’t have to deal with the indecision of which model to buy.

That’s one of Apple’s great appeals. Yo want a Mac? List the features you need, then find the one or two models that fit and pick. You want a Windows PC? List the features you want, then find the several hundred models that fit and… Forget it.

Posted by Scott Falkner on 1 August 2009 @ 9pm

“Apples are for old people.”

Go take a walk around a college sometime. Even in Microsoft’s backyard. We did an informal count last spring (no CS classes), and the hall with the most PCs was about 2/3 Macs.

Posted by BR on 1 August 2009 @ 9pm

Virtualisation isn’t an exclusively Mac thing, what is exclusively Mac is the ability to run Mac OS X as well as windows, linux, solaris etc, all at the same time.

Posted by Kai on 1 August 2009 @ 9pm

I’ll say upfront I’m an Apple Specialist and Apple Certified Macintosh Technician. I work for an Apple Authorized Reseller and Service Center. That said, I also have extensive experience working with Windows PCs.

When comparing Macs and Windows PCs, one has to consider total cost of ownership. That includes additional money spent on software to combat/protect against virii, adware, malware, etc. and time wasted updating and tweaking a machine to get it to do what you want it to do. After all, time is money. When one buys a Mac, one gets a low maintenance, easy to use computer.

In my experience, Macs require 1/4 of the time needed by Windows PCs to keep them secure and in good working order. Wouldn’t you rather use your time being productive and getting things done instead of using/wasting it maintaining your computer and tweaking it to get it to a point where you can do the work you bought it to do in the first place?

The WalMart/Microsoft mentality (“Save money by buying something cheap!”) is short-sighted. It’s a shame so many people buy into it.

Posted by James Wu on 1 August 2009 @ 9pm

Why can’t Windows users ever spell Mac OS X correctly? It’s not “OS/X.” It’s not “OSX.” It’s “Mac OS X” (pronounced “ten,” not “ecks”). It’s not that hard. I may not use Windows, but I don’t call it “Windows EXP” or “Vista windows” or whatever. C’mon, get the names right!

Posted by Carl on 1 August 2009 @ 10pm

I’ve always been a Mac fan, but I’ve been surrounded by many PC/Unix guys. I can safely say, that the majority of those friends that five years ago would have said they would never buy a Mac, now own one as their primary machine (and beyond that, most have bought machines for significant others). Even my brother (who refused to buy an iPod two years ago because his whole music collection was in Windows Media), now owns two iPods and two Macs (one each for him and his wife). It’s not about being cool, but it’s about getting the best machine for the money… and cheaper isn’t always better.

Posted by Jon Sweet on 1 August 2009 @ 10pm

“However, a low-end lawn mower is still fundamentally a lawn mower.”

I don’t think that’s a valid statement. There are considerable differences between a push reel mower and a high-end ZTR Snapper rider.

“I think if Microsoft wanted to make their computers cooler”

But Microsoft doesn’t make computers.

“Apples are for old people.”

An amusing assertion given that Microsoft’s first two announced retail locations are Scottsdale, AZ (retired white people with money), and Mission Viejo, CA (upper-crust Republican white people, largely old).

Posted by Brian on 1 August 2009 @ 10pm

“However, a low-end lawn mower is still fundamentally a lawn mower.”

Not really, not if you care about the total cost of ownership, the value of your time, the quality of your grass, etc. You’ve got to think past the end of your nose. You. Get. What. You. Pay. For.

Posted by Greg Paulhus on 1 August 2009 @ 10pm

I’ve seen (and worked with) a number of these $600 laptops. That’s why all my computers are Macs.

I’m a student, so I’m not particularly affluent. I’m also a programmer & systems administrator. Sure there are things that Windows is good for, and there are things that Apple really stinks at. But given the choice I’ll choose Apple until Microsoft offers a very compelling reason to switch, or Apple screws up so bad that their Macs get in the way of me doing my work.**

I don’t see that happening any time soon.

** For reference on how this might happen, see the App Store mess on the iPhone. If the Macs ever go that route, I’m leaving.

Posted by Andrew on 1 August 2009 @ 10pm

I’m a mac user (mini, macbook, iphone, ipod, airport extreme, airport express, etc etc). So don’t get me wrong, I’m not a huge Windows apologist.

But from my experience playing with Win7, Microsoft and the PC makers have the chance to be a decent Target: Inexpensive but reasonable quality :)

Posted by b0rk on 1 August 2009 @ 10pm

All true, and also there is a difference between a $75 lawnmower and a $200 lawnmower. THe $200 one works for years and years. Never gives you a problem starting and always works as well as it did the day you bought it.

So the parallel is actually very apt.

Posted by stwf on 1 August 2009 @ 10pm

“…my $600 Dell does everything that 90% of computer users need…” – Stan Taylor

“That’s exactly the point. Apple isn’t making machines for the 90%.” – daveadams

I’m going to both agree and disagree with daveadams take, above. I agree with both Stan and Dave that for 90% of the people, a $600 dollar Dell does everything they need. Bus Stan goes on to say:

“Sure, I’d dearly love to have OSX…”

A $600 Dell gives me everything I need, but I opted for a Mac because OSX gives me all that I need and also gives me things that I love. I didn’t want a computer I could get by with. I wanted a computer I could love. And that’s what I got.

Posted by FalKirk on 1 August 2009 @ 11pm

I think I understand Apple’s strategy and marketing decisions up to a point, but I really think they have been missing an opportunity for years. There’s a huge gap in their lineup for a mid-range mini-tower.

I think there are many people like myself who’d like something more expandable and capable than a Mini, don’t want the built-in monitor and a laptop-grade drive of an iMac, but for whom a Pro is total overkill. Apple should have a machine with two RAM slots, one removable drive, one 3.5″ hard drive, one removable/upgradable CPU, an upgradeable graphics card, maybe one other slot, and an array of ports. Surely they could sell that for $999 and make money? Or sell it for $799 and cause a sensation in the marketplace and strike fear in Redmond.

Even better: make it extra “green” with a public commitment to offer motherboard upgrades for at least five years. Might that not get some publicity and the attention of corporate buyers tired of Windows problems?

Posted by PapayaSF on 1 August 2009 @ 11pm

Apple may be using the same components as their counterpart but the differentiation is their OS is tightly integrated to work well with each other, i.e. they control the whole widget.

Posted by AdamC on 1 August 2009 @ 11pm

I believe that Stihl felt the same as Snapper.

Posted by Dave Barnes on 1 August 2009 @ 11pm

Is it 91% of retail laptops over $1k or 91% of retail computers over $1K? I’ve not seen laptops mentioned anywhere else

Posted by Mike on 1 August 2009 @ 11pm

One of the things that always gets me about the specmanship marketing game is the way that the real differences are subtly elided.

“Look, you can get a 17″ Dell laptop for $700! The 17″ MacBook Pro is $2500! Apple tax! Apple tax!”

Except, well, the Dell has a low accuracy, low quality 1440×900 screen, while the MBP is 1920×1280 that is entirely appropriate for precision work.

The differences are in the details which don’t get mentioned in the ads.

Posted by John on 2 August 2009 @ 12am

Jason!

I understand your position. I think there are many professionals who make the same decision that you did. However, I think that the, seemingly attractive, initial price of the computer is blinding many to the real cost. I know more Macintosh users than Windows users and yet while I haven’t heard any Mac owner having to take their computer into to get it fixed for any reason, I hear of Windows users that have to have there HD wiped and everything reinstalled. The neighbor across the street was without her laptop for over a week. She’s an attorney. What do you thing the real cost of that laptop is now? I think the problem is the extra expense in lost time and productivity is much less tangible and comes in smaller increments than the $500+ extra you pay for a Mac.

Posted by Chris Griffin on 2 August 2009 @ 12am

I bought a (then) top-end powerbook 4 1/2 years ago at the same time as a colleague purchased a Dell laptop that, on paper, out-specced the Apple machine. I ran the PB 18 hours a day, with Photoshop and other CPU intensive apps. I’ve been very happy with it and have just replaced it, in fact, handed it down to a relative. The colleague’s Dell? Landfill after two years.

That’s why I pay the Apple ‘premium’. It saves me money.

Posted by jonk on 2 August 2009 @ 1am

“…I think if Microsoft wanted to make their computers cooler…” What? Wow! Microsoft makes computers? And to think all this time I thought they made software.

Posted by Naught Applikkable on 2 August 2009 @ 1am

Based on his quick description, it didn’t sound that much different from the $600 Dell (Insprion 1545) that I bought a few weeks ago. Man, I hate to sound like a Microsoft apologist …

Until you pick them up when they’re sitting side by side, and the Inspiron creaks and flexes while the Mac feels like a solid piece of metal. You’re not an apologist, you just don’t care — and you proved the Gruber’s point.

What kind of car do you drive? I love European sports cars, and will own one as soon as I can afford it. They’re expensive because they’re built with high-end components and engineering for people who care. If no one cared, we’d all be driving a Geo Metro and that would be the only option. (And yeah, I could afford to buy one on credit, but I’m a cheapskate too — I pay cash.)

It’s fine that you don’t care and are satisfied with the low end of the market — but did you notice that GM (Who made Geos) is bankrupt, and BMW barely shrugged it’s shoulders during the economic downturn? Microsoft may not be long for this world, because just like Snapper and Apple and BMW have proved, making bad products for cheapskates who don’t care isn’t the world’s best business plan.

i didn’t realize virtualization was a “mac thing”.

It isn’t, but you can’t (yet) run OSX in a virtual machine on a Windows machine (as far as I know.) Therefore, if you’re a web developer or a alpha nerd of some sort that needs to use OSX, you need to buy a Mac.

Myself? I work with computers all day. When I get home, I pick up my MacBook Pro and get on the internet to relax. (It’s my television; I don’t have a TV.) I don’t want to mess with network configurations, figuring out why my drivers suddenly stopped working, or waiting for my antivirus program to update. I just want to freakin’ use it. And buying Macs for my sister, my mother, and my grandfather has reduced my unpaid family tech support time from a few hours a week to nil. Well worth the extra price, in my opinion.

Posted by Karl Katzke on 2 August 2009 @ 2am

Also, two points I know will come up:

1) Yes, Apples break. They’re machines. Machines break. Mine does. But when a Dell breaks, I have to deal with wherever we bought it, RMA it, and yadda yadda. When my Apple breaks, I diagnose it with a friendly tech on the phone, and then have the parts shipped to my nearest Apple Store. I’m usually in and out within a half hour.

2) Apple’s market share in the next few generations is growing. On the residential (aka, dorm) network at my employer, Texas A&M University, over 40% of the hosts are running OS X. Other universities that don’t have hardware programs in place for students (usually medical or graduate programs) have reported similarly high numbers on their campus networks. What is the Microsoft-centric Business IT world going to do when these students come out and say, “Um, hey, I want to use what I like. It works with Exchange, now buy it for me.”

Posted by Karl Katzke on 2 August 2009 @ 2am

My sentiments exactly. Was riffing on the Wal*mart and cheap brand identity. I’m disappointed in Redmond on this one. And I don’t even really like ‘em.

Side note to Stan and Jason. Yeah, I converted my parents and sister to Macs a while back. I got tired of helping them disentangle the Windows systems. But I’m also a developer. Low-level at times at that. I’ve run Windows, Linux, Mac, Solaris all as my desktop at various times. Pounding on a Linux config or even a registry file doesn’t fill me with dread.

It pisses me off. I make my living writing sofware on all those operating systems. That I have to tinker with them, at during that time creating zero value for myself or my client, rather than turn them on and get to work, is worth a lot more than a grand in a computer. That get’s billed pretty quickly. If I want to get dirty and go low-level, I’ll work with a microcontroller without an operting system. If I want to develop, I don’t want to have to go through a bunch of kicking around settings in the OS before I can get to it. Just my opinion. Been there, done that, no longer entertaining, now running a Mac with Parallels for all the native execution environments I need. A lot less wasted time, and still all the power and ability I need. But I know there was a time I wouldn’t have run anything by Linux on my desktop. That time, though, is past.

Use what works for you. That’s what matters.

Posted by Dallas Hockley on 2 August 2009 @ 2am

Stan Taylor: I’m afraid that’s only true in a very naive assessment. For a much lower price you can get a PC laptop that is as fast or as big as a Mac in terms of GHz, GB and screen inches. Similarly, you can get a pair of 32″ jeans in Wal-Mart for a fifth of the price of a pair of 32″ Diesel jeans, or a GM car with as many cubic inches and horsepower as a Mercedes for a fraction of the price.

The Wal-Mart jeans and GM car are only comparable to their more upmarket equivalents in a very limited sense. They do exactly the same (cover your lower half, get you from A to B) but that’s clearly not the whole story.

Similarly, if all you care about is the speed at which a machine can rip mp3s, Macs are overpriced. If on the other hand, you care about things like having a beautiful screen that you can easily sit in front of all day without your eyes bleeding or a casing that doesn’t creak ominously when you pick the machine up, or keys that keep working after a year of heavy use, then Macs are very competitively-priced against PCs that are comparable in those respects. Vaios in particular are significantly more expensive than similarly-specced MacBooks.

Posted by Dave Richards on 2 August 2009 @ 4am

While this article is about Wal-martification of Microsoft, I can’t help but see an analogy between the quote from Snapper CEO and the situation a lot of iPhone developers find themselves in today (prices being driven down, not being able to turn profit or meet costs). Their situation is actually even worse, not being able to switch to any kind of “independent-dealer channel”. Their only option is to not increase the “content of the product”, or just completely walk away. Wal-martification of Apple’s App Store is also a (sad) fact. (Sorry for being somewhat off-topic.)

Posted by Attila on 2 August 2009 @ 4am

Stan : “I was just referencing a friend who claimed that their hardware was no more expensive than a comparative Windows machine. I don’t really believe that.”

This is interesting because I’m a mac user currently in the market for a windows machine and I thought I would be significantly cheaper to get a moderately low end windows machine based on how cheap everyone says they are over upgrading my mac. The price rockets when you look for core 2 duo instead of core duo and if you are looking for similar chip speed (2.4 bottom end, prefer 2.99) the highest end dell inspiration with add ons starts to compare to the lowest end macbook and though it is slightly cheaper ($798 / $999) with more ram and bigger hd, it doesn’t have a dedicated graphics card far-less a good one, it has half the battery, weighs more, isn’t finished to as high a standard, no remote etc… (long list of really small things). I can find loads with more ram, bigger hd, similar sized screen, not as good a processor or motherboard, slightly cheaper but lacking several key features and at prices where I might as well throw in another $100 and get another mac.

Posted by Toby on 2 August 2009 @ 7am

“i didn’t realize virtualization was a “mac thing”. it works great with linux…”

compare Wmware fusion (for mac) with Kvm or linux vmware or virtualbox and think how the virtualisation software on a mac use ALL the services and nice things of os X in a simple and integrated way.

it’s not the same thing… believe me, My job is to deploy all theses geeky things as virtualisation, linux servers and so on. (and yes, I use a mac to test solutions before)

I don’t spit on linux. Linux is one of the Best thing ever created for the industry and students, but please, you have to acknowledge it’s not the same… , not the same.

Posted by oomu on 2 August 2009 @ 7am

Differentiate or Die: Chapter 7: Price Is Rarely A Differentiating Idea

http://books.google.co.uk/books?id=IJN-a827qPkC&lpg=PA55&ots=Sdz9QH0B7E&dq=%22jack%20trout%22%20differentiate%20on%20price&pg=PA55#v=onepage&q=&f=false

“Being different should be worth something”

Being different is how you add value, etc.

When choosing a PC, why buy a Dell over an HP over a Toshiba, over an Acer, etc etc, they are all the same: they are all cheap, and all run Windows, right?

Then, if you’re looking to spend $1000+ suddenly Apple has differentiated itself, it has a market position, etc. Apple is remarkable, it has a tribe.

Posted by britmic on 2 August 2009 @ 8am

Windows is fundamentally an OS too – one that doesn’t work well, is faulty, buggy, crashes, etc. If Windows did everything as well and as stable as the Mac OS did, this article wouldn’t have been posted.

Posted by Jeff on 2 August 2009 @ 8am

I really enjoy the fact that the Apple fanboys forget the fact that when comparing Macs with Windows PC’s, they cannot assign the same accountability for products between the two companies. Microsoft makes the software, their “partners” build the hardware. HP and Dell, the two largest of Microsoft’s partners bear much of the blame when it comes to losing the higher end market. HP and Dell have turned much of the platform into the commodity market it is today. Both manufacturer’s (which collectively sell roughly 50% of PC’s) have produced commodity designs, and make PC’s that are nothing to fawn over. This in turn, has made it’s OS a ‘cheap’ commodity item. In the battle to make razor thin margins on commodity hardware, niether company has brought forth any significant innovation in PC design. The Adamo’s not a bad start, but underpowered and overpriced. The Voodoo Envy series is nice, and a solid machine, but not really worth the premium over a lesser machine. The same could be said for the Sony Vaio series. Nice solid machines, with decent design, but are they really worth the price difference over a lower cost machine? Combine this with Apple making beautiful high design, quality hardware, then the reasoning makes sense.

Also, stating that Apple has 90% of the marketshare over a thousand dollars also strongly implies that 90% of the market pays less than a thousand dollars for a PC. Without Microsoft, and the commodity PC makers, the internet explosion, and the huge market for web desginers, coders, and other web centric folks would not have a market to sell into. Hate on 90% of all PC’s if you really want to, but the market for all this stuff doesn’t just come form the digirati, it comes from the casual user sitting in front of their $600 Dell, HP, or emachine.

Posted by Chad on 2 August 2009 @ 9am

Karl, wow things have really changed. When I was a freshman living in Lechner and a sophomore living in Clements (in 2000 and 2001, respectively), my iMac was one of maybe half a dozen Macs in the entire dorm. They’re up to 40% now?

Posted by Chris FOM on 2 August 2009 @ 11am

Setting aside the Mac vs. PC aspect of this thread, the crux is whether or not Wal-mart provides good insight into the MS business model.

The analogy might break down when you throw Moore’s Law (and its derivatives) into the mix. If WalMart could reliably cut the prices of the same equipment by half every 18 months, it would have a really excellent business model. The problem with Snapper was that it was running out of room to cut prices. I’m not sure computing has the same floor.

Maybe this doesn’t sink the analogy completely, but it’s worth thinking about.

Posted by Thomas Brownback on 2 August 2009 @ 11am

The way I look at it is — after having built my own PCs since 1995 and having owned a shiny Macbook Pro for nearly a year — the price premium you pay for buying a Mac as an office-and-internet machine is made up for by the lack of stupid tech problems.

Here in Ottawa Canada minimum wage is nearly $10/h, so it takes less than 1 month of full-time work to make $1000. The base 13″ Macbook Pro is about that much more than a basic Windows laptop. So, if that Windows machine gives you anywhere near one work month of hassle thanks to its maker and OS over its lifespan, you have then lost all the savings of NOT buying the Mac.

Posted by Bronwyn on 2 August 2009 @ 12pm

There is also a lot of difference between a $200 lawnmower and an $800 lawnmower. The cheap mower has plastic wheel bearings that will eventually deform. The expensive one has metal ball bearings that can last for ages. The cheap engine runs harder and will fail sooner. The expensive engine is designed to last and can be repaired. The adjustment mechanisms on a cheap mower are usually simple metal flatwork. The expensive mower with have levers, cams and slots as necessary for long term smooth operation. Mind you, I bought the cheap mower not having a lot of lawn, but I looked at the high end models as well. If I mowed lawns for a living I wouldn’t think of using a $200 mower. I’d have to buy two and rotate them in and out of the shop.

Walmart is aimed at delivering value to a large chunk of the population. There are lots of people who find it a bit pricey; they shop at dollar stores and cruise for discards. There are lots of people who find Walmart too cheap; they shop at more expensive stores with better service and often better quality goods. Walmart does not compete with J Crew, Bergdorf Goodman, or Ralph Lauren. (Hell, Ralph Lipschitz could sell a line of his rags at Walmart without cannibalizing his prestige market.)

The computer market is a bit different. There is a huge enterprise market with lots of customers buying lots of machines. Their goal is standardization and corporate control. They want to know every file on every machine. When a new release of something comes in, they want it installed everywhere. If the mechanisms that let them do this also entail a security and maintenance cost, so be it. Since they are buying in quantity, they want the best price they can get, and will often put the contract up for bid. They are more like Briggs & Stratton or Honda selling lawnmower engines, generally to lawnmower manufacturers.

The consumer market is an afterthought for Microsoft. It may be a real concern for Dell, HP, Lenovo and the like, but, even for them, the big deal is the enterprise market. This shows in Microsoft’s software. It is perfectly enterprise friendly with lots of back doors, road maps, and enterprise features. Yes, it has consumer features grafted on, but they are grafted on and it shows.

The consumer market is the primary focus for Apple. They are aiming at the user who is buying, maintaining and using his or her own system, so they spend their time on making it pleasant, easy to reconfigure, standards compliant and flexible. That’s right, consumers want flexible systems. They might not be playing with video now, but they might like to. They might not be doing digital photography now, but they might like to. There’s a whole list of capabilities that Apple provides, and they won’t sell you a system with less.

Even at the retail level, Microsoft isn’t exactly Walmart. They remind me more of the odd lots companies that would sell manufacturing overruns back in the 60s and 70s. You could get a great, cheap typewriter if you didn’t mind where some corporate logo had been ripped off. Ditto for telescopes, binoculars, institutional sized cans of food, aprons, uniform pants and so on. They were made for particular buyers, but they made too many, so you could get a great deal.

Posted by Kaleberg on 2 August 2009 @ 12pm

I would argue a form true computer lover is one like me, currently running after effects with 64-bit power, with a box that that has hardware hand picked to last longer, cost less, and has much more power than any preformed apple computer has to offer, I would say true love is knowing how all parts of your computer work together and having control over their relationships, a control apple will never invest in because they want that control and will not give it to the user. Microsoft produces the only OS that let’s me have this kind of love for my computer.

Posted by Troy Blank on 2 August 2009 @ 12pm

I am buying a Toyota instead of a Porsche Boxer.

It carries the groceries just as well, and is soooooo sexy.

I can pick up any honey I want with it (at certain intersections) No viruses yet.

WOO HOO!

Posted by Ronald Trump on 2 August 2009 @ 1pm

Microsoft and their partners make cheap PCs. Microsoft does the software.

Apple does not make PCs. Apple makes high-end computers – all of it, the hardware and the software.

Microsoft and their partners make PCs for cheapskates.

Apple makes the computers we love and are fanatic about.

Posted by James Katt on 2 August 2009 @ 2pm

Re: build quality Everyone close your laptop lids, pick it up, grasp your laptop on the left and right sides, and twist back and forth as if you’re going to wring out a wet cloth. Did it creak? Did u feel something shift?

I invite you to do the same with any MacBook or even MacBook pro G4. Macintosh build quality is an order of magnitude higher than PCs.

Re:software 90% can be done on a pc? The other 10% being creativity suites that apple does so well. Learning curve for iLife is a walk in the park. My kids can do so much more on a mac than a pc right out of the box making their own movies, books, calendars, websites. Happens on a PC? Maybe… But not right out of the box! My “oobe” with a mac is much more enjoyable. Cause what do u do when u break out ur new PC? One word: solitaire. I exaggerate, but u get my point.

Running windows concurrently on a mac or boot camping it? It’s like buying 2 laptops in one! I still have my PC rig and I play crysis and bf2142 along with L4D…

i have a $299 netbook #ackintosh to do 90% of what I need to do.

Point is, if you’re still arguing mac vs pc and price points, you’re not geek enough. Macs just work. PC hardware allow me to have crazy framerates in Crysis. Ubuntu on my dell d410 just so I say I did it and talk to my linux friends. Whatever u choose u’ll still need to buy a productivity suite. Buy what u need ppl. I have both.

I am not responsible if u damage or destroy your PCs. And if u did damage it, get a mac… Or a toughbook… See how much that sets u back!

Posted by Pinakbet on 2 August 2009 @ 4pm

Here’s what I know: my iMac has been humming along for a year now without any problems to speak of. In that same span, I’ve spent plenty of long evenings helping friends who got a “great deal” on some Dell or HP box.

Posted by wheat on 3 August 2009 @ 1am

Being called “Unix” and being Unix are quite different. Apple’s lousy OS is based on a rock-solid BSD that’s been beaten into a sorry state. Solaris is Unix, SCO Unixware is Unix. Apple just made BSD work sort of like Unix. Not the same.

You’re all just being silly. Normal people don’t use Windows because they’re sheep or uninformed. The fact is that they like to get things done. They aren’t nerdy people who care what computer codes are running behind the scenes. Firefox runs on all platforms. There are hosts of office sweets for any platform and so on. Moreover, Windows has exponentially more software available for it and while your cherished glowing apple computer can run Windows, you have to restart your machine. Windows users have the benefit of just clicking an icon.

I mean let’s face it, you’ve all been pressured into buying a glowing apple computer because you want to be apart of some group which you’ve been led to believe is cool and unique while it’s just plain nerdy. Solaris is an alternative operating system and you’d never say a Solaris user was cool.–And we (yes, I use Solaris) have a much better platform (real Unix!) than a gay, err glowing apple user could ever imagine. Clearly each of you only uses the internet on your apple PC because if you really had anything important to get done, you’d be using a Mic or a Sol.

To the person commenting on the Power platform: don’t be foolish. Power is far superior to our lousy x86 machines. (yes, even my Thinkpad T-series)

I’m sure i’ll be derided, but apple doesn’t have 91% or premium PCs for any reason other than poor marketing and up-selling from real computer companies. Besides, let’s face it, you bought a computer from a music device company. Grow up sally pants.

Posted by Jerrid on 3 August 2009 @ 3am

i got my 60yr old mom an entry level macbook. after 10 years on windows she said “this is a far better computer” and “its beautiful”. that says more than any mac evangelist’s speech, considering she couldnt tell a mac geek from her own front door.

mac is a superior product. im saying this after 10 years of trying to get work done on windows machines.

Posted by stef on 3 August 2009 @ 9am

Let’s not make this the most derivative and generic Windows vs Mac flame war, please. If you like Windows, you have my blessing. If you think that over $1,000 is too much to pay for something that you use to check email and surf the Web, you have my blessing. If you have a $5,000 quad processor Mac Pro because it looks good next to your stereo, you have my blessing.

Posted by Rafe on 3 August 2009 @ 10am

That’s cute how you selectively put up only the comments that you agree with. You’re a sad little man/woman. Obviously, you’re one of the sheep I commented on.

Posted by Jerrid on 3 August 2009 @ 4pm

Just hadn’t gotten around to approving everything, Jerrid. I certainly wouldn’t want to be the person who prevents the world from knowing that you think the word “suites” is spelled “sweets.” Although, to be honest, on any other day I’d delete your comment for its use of “gay” as a pejorative.

Posted by Rafe on 3 August 2009 @ 5pm

My mistake. Also, I’m not sure, but I routinely type homoephones instead of the word I intend. Maybe a form of dyslexia?

Posted by Jerrid on 3 August 2009 @ 6pm

You get what you pay for unless you’re stupid, then you get what you deserve – Bruce McCormack

Posted by Bob on 4 August 2009 @ 11am

My mid 2007 spec Macbook Pro is now on its third mainboard, fourth battery and third optical drive. People who bang on about the mythical build quality of Mac’s need to take their head out of the sand and realise Apple use the same materials as every other vendor. They are even built in the same chinese sweatshops.

Anyway, 91% of the high end retail market in the US alone is the real figure behind that number. I wonder what it would be if you took all sales (companies like Dell/HP/Lenovo who do the majority of their sales online, with little to no high street outlets) from the entire world market.

Posted by Chris L on 6 August 2009 @ 5am

My mac just works, saves me so much time! I have more time for the rest of my life.

Lifes to short to try and convince people on forums that Mac’s are better when they have never tried one (for more than a few hours).

Posted by Jacob on 7 August 2009 @ 8pm

This is a great story and it’s good to see people putting quality and customer experience over the all mighty dollar. It’s not about how much you can make. It’s about how many you can successfully serve.

Posted by Toro Parts Guy on 7 January 2010 @ 12pm

Tweetbacks

  1. Remember people, you get what you pay for: http://tinyurl.com/muv7ha (more excellent commentary/dialogue based on @gruber’s Microsoft essay)

  2. This is how I see Wal-Mart and Microsoft; cheap, yes, but second-rate and not worth my money. http://tinyurl.com/muv7ha

  3. “It doesn’t surprise me that Microsoft’s current Chief Operating Officer came from Wal-Mart.” http://bit.ly/Co3a2

  4. 17″ MacBook Pro = $2,499. Dell Precision Workstation M6400 with nearly identical specs = $2,864. muhahahaha. http://tinyurl.com/muv7ha

  5. The wal-martification of Microsoft:http://rc3.org/2009/07/31/the-wal-martification-of-microsoft/

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