Apple’s Marketing Strategy and Why Microsoft Profits are Down

I use a Mac for my main computer. It’s a laptop and it’s great because I also have an iPhone and they work together beautifully. I also have a PC at home running Win XP. It’s a 3 GHz processor which, of course, started out fast but became slow.

Mac vs PC

AppleThe great thing about Apple and Macs are that their operating system runs on their hardware. Smart move. With a PC, it’s Microsoft’s software running on who knows what kind of hardware – thus all the problems with drivers and funky hardware that helps contribute to all the problems (blue screen of death/BSOD). Also I read the Mac core OS is like 1 MB and the Windows core OS is like 1 GB. So with Windows, they have to create new operating systems for phones and whatever else they make. That’s why they don’t work well together. With Apple, you have the same operating system running on your iPhone as your laptop. Easy. Simple.

Microsoft in the Tank

Let’s face it, Vista bombed. Many people had to downgrade to Windows XP. I’m putting together a PC for here at work for our conference room table and Vista won’t even install! It’s a huge pain in the butt and I don’t know what I’ll do – probably go get XP. Microsoft’s profits are way down, too:

Microsoft Shares Decline Premarket On Disappointing Results (online.wsj.com)

Shares of Microsoft Corp. (MSFT) fell 7.7% in premarket trading Friday, a day after the software titan posted fiscal fourth-quarter results that fell short of Wall Street’s expectations and reflected a sharp slowdown in software sales, as demand for new personal computers waned during the recession.

The stock was recently down $1.97 to $23.59.

Apple’s Market Share

Apple owns about 10% of the market and that’s where they like it, actually. They’re making profit and delivering a high quality product. I love this article that I found yesterday. It’s so right on. It’s a quick read, so check it out:

The Mac Versus PC Debate Has Never Been Clearer (www.techcrunch.com)

If Apple wanted to make a range of low-end computers, it absolutely could. And such machines would sell like crazy, boosting Apple’s market share. But there would have to be some trade-off in quality, and perhaps more importantly to Apple, to its high margins. And as it has proven time and time again, it has no desire to give up either.

…a way to think about it is if Windows-based PCs as a whole are thought of as a top selling car like the Toyota Camry, Apple’s Mac computers would be more like a luxury car, like a Porsche. Porsche sales are just a fraction of Camry sales because it does not sell any models in the low-end price range. But at the same time, Porsche makes more money on each car sold and maintains a premium branding. If Porsche started selling cheap cars, it would move a lot more units, but it would no longer be the Porsche brand that we know.

This article also mentions those PC commercials out there where people go and find cheaper computers. There’s one where Lauren wants a 17-inch laptop for under $1000 but Apple doesn’t even make that, so of course she’s getting a PC. It’s like saying you want a brand new Porsche for $15,000. They don’t make that car so you can’t buy it.

The great thing is the PCs are getting cheap. You can get a laptop starting at just under $300 today. That’s insane. It’s also great for people who can use them, so Microsoft just keep doing your thing and Apple will keep doing theirs.

What I like is that even in a tough economy, Apple keeps their prices up. They know what they’re worth and don’t compromise. That’s a lesson we can all learn from.

-Tony