Microsoft Says Your Mac Is Not Worth $500 More

Despite a reputation for being more expensive than Windows PCs, in the past few years Apple’s Mac has steadily gained market share with record sales.

With a tough economy, Apple is under some pressure to develop lower priced products instead of premium quality products which, on average, cost more than competing products. None other than Microsoft CEO Steve Ballmer says the “tide has really turned” against Apple.

Has it? Or is Ballmer’s hubris about to be deflated by market realities? Again? Is your Mac really worth $500 more than a comparable Windows PC?

This rivalry has been going on for decades. It’s an old saw. Mac vs. PC. Steve vs. Steve. Hubris, bluster, arrogance, and illegal activities mark the red boxer on the right. Rabid fans and highly acclaimed products mark the blue boxer on the left.

Microsoft’s Ballmer, quoted in a TechFlash article, says, “Apple gained about one point, but now I think the tide has really turned back the other direction.”

Lies, damned lies, and statistics. It’s important to put such a remark in context. Microsoft does not make computers.

They make a much loathed operating system for about 90-percent of the world’s personal computers. Outside of Windows and Office, what other successes can Microsoft boast?

Apple does not sell an operating system that competes against Microsoft’s Windows. They make and sell a personal computer with a highly touted and popular OS. Apple’s Mac market share gains in recent years are significant, though not on a general, world-wide, market share basis, rather in selective market segments.

In the highly lucrative segment of notebooks, for example, the Mac’s market share has grown significantly. In the even more lucrative market of PCs above $1,000, a few reports put the Mac market share at up to 25-percent in some countries.

With such sales and market share growth there must be a winner (Apple) and some losers (Windows and PC makers). We’re now hearing from one of the losers, Microsoft CEO Ballmer. Back to the show.

Ballmer says the weakened economy is helping Microsoft turn the tide against the Mac maker. “The economy is helpful. Paying an extra $500 for a computer in this environment—same piece of hardware—paying $500 more to get a logo on it? I think that’s a more challenging proposition for the average person than it used to be.”

Since when does the average person buy a Mac? Windows PC sales have been slumping dramatically in the past few years, first because of the Windows Vista debacle, second the general economy has problems. So does Mr. Ballmer’s logic.

The implication in his bluster is that there is no difference in hardware between Macs and PCs. Then why do some PCs cost $500 and some PCs cost $2,000, or more? He also implies that the only difference between a Windows PC and a Mac is the logo on the Mac and the higher price.

Is there a difference between a Mac and a Windows PC even when the hardware is approximately the same? Is your Mac worth $500 more than a comparable PC?

If not, then Apple’s Mac sales should be dropping rapidly, faster than less expensive and more economical PCs running Windows. The reality seems different as Mac sales have dipped very little in spite of economic woes.

In other words, Ballmer was really comparing Apples to lemons. Microsoft is a convicted, criminal company whose dominant position in the market place was obtained, in many cases, illegally. That was then. This is now.

Microsoft remains profitable, yes, but is besieged by more nimble competitors on all product fronts, not just the old Windows vs. Mac saw. Microsoft’s Zune portable music player has failed to dent Apple’s iPod juggernaut.

Ballmer once predicted that Apple’s iPhone would get no significant market share. The realities, again, oppose his executive posturing.

The iPhone and iPhone OS X is a rousing success, more so even than Windows Mobile which has been on cell phones for most of a decade.

Apple’s iTunes Store and Apps Store, and complete integration between hardware, software, applications and services is a formidable force which Microsoft has not been able to counter. Why? Why doesn’t Microsoft simply copy Apple? Again.

Ballmer’s attitude is important. Apple builds products they like, and that they know customers will like. It seems simple, but few people switch from Apple products to Microsoft products. Usually, it’s the other way around.

When asked if he owns any Apple products, Ballmer responded, “No, none. I don’t, my sons don’t, my wife doesn’t.” My question is, why not? Maybe more Microsoft employees should own Apple products so they can begin to understand why they are so popular.

In essence, he’s saying that Apple’s products are so over priced and with such little differentiation that he cannot tell the difference between them and generic, low-priced priced products. Is that true?

Ballmer admits to being a Ford guy. It’s reported that Steve Jobs, Apple’s CEO, drives a Mercedes. Both are so rich they can drive whatever they want. For me, my Mac is like a fine tuned, quality automobile which provides a great user experience, runs well, and provides a high resale value.

That difference may escape many PC users, and it certainly escapes Microsoft’s CEO. His bluster sounds more like American railroad executives when the automobile came along. Bah, humbug, they said, “We’re in the railroad business.” In reality, they were in the transportation business and just didn’t know it.

As a Mac user, do you feel you’re paying a $500 Apple tax when you buy a Mac? Is there sufficient differentiation between a Mac and a comparable PC to make it worth your hard earned dollar?