How Apple is Causing the Death and Rebirth of the PC

Inspired by Apple, the Microsoft stores will offer a unified hardware-software product, greatly changing the PC market – and also impacting the enterprise market.


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Posted August 12, 2009

Rob Enderle

Rob Enderle

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What’s interesting about the Mac vs. Windows advertising campaign is that Apple was able to segment out their product from the PC group and then disparage the majority of the products that remained.

But in so doing, they not only made the problems with the current pool of Windows-based PCs very visible, they focused Microsoft on fixing those problems.

The end result will be a set of events that will pull Windows PCs out of this pool and forever change the PC as we know it, I think for the better. But many (like the PC OEMs) may not agree.

Let’s talk about that today.

Mac vs. PC

The Mac vs. PC campaign did a substantial amount of damage to Microsoft and its partners over an extended period of time by pointing out aspects of Windows and making Microsoft appear petty and clueless.

It had one significant flaw however, which may have been intended to avoid Microsoft litigation: it never really called out Windows generically and instead focused on Vista.

This means that when Windows 7 ships Microsoft should be able to sidestep much of the negativity that has surrounded Vista. However, they clearly have to deal with the lingering impressions that Windows isn’t reliable. More important, Microsoft was clearly losing market share and needed to respond.

The first part of the response was to increase their marketing spend and bring on board a new agency. Currently, in advance of the Windows 7 launch, they are focusing on value.

This is because Apple maintains unusually high margins for a PC manufacturer, which means a consumer should get substantially more hardware for the dollar by buying a Windows box. This campaign hits at a time when, thanks to the economy, people are focused on being frugal.

However this campaign doesn’t address the perceived problems with reliability and user experience. Apple is able to mitigate these problems by owning the solution. Apple specifies the hardware and software load on each of their machines and, while not perfect, does give them the ability to better assure the result.

The Dysfunctional Ecosystem

The industry problem, and this goes beyond the Apple attack – which didn’t create it but only made the problem more visible – is that the existing partnership between Microsoft and the OEMs is broken. Neither owns the customer and both point to the other as the cause of the lack of growth over the last decade.

The PC OEMs seem to only focus on competing on price which destroys their margins and makes it nearly impossible to afford demand generation marketing in line with what Apple does. Microsoft feels like they are carrying most of the weight for the industry while also getting most of the blame for problems they neither created nor can effectively mitigate.

Like a bad marriage, both sides seem to believe the other is inept and both sides have good evidence they are right. But only one side has the power to decouple from that relationship and that’s Microsoft.

Finally, both sides effectively cheat on the other. Microsoft already has a hardware business in the Xbox that the OEMs are locked out of and most of the OEMs are both doing Linux and cutting deals with Google for Android.

The word “dysfunctional” seems so inadequate at the moment.

Microsoft has waited most of the decade for the OEMs to change their behavior and create a counter trend to Apple. That wait was in vain and now Microsoft is moving to make its own correction.

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Tags: Windows, Microsoft, Apple, Vista

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