Microsoft vs Apple: The back-to-school battle

Microsoft vs Apple: The back-to-school battle

Summary: In August, a new academic year begins and many -- like me -- are looking for a new a personal computer. The Macs seem to be a popular choice, according to statistics; and until this year Apple had a very enticing Back to School offer: a free iPod Touch with the purchase of a Macbook.

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In August, a new academic year begins and many -- like me -- are looking for a new a personal computer. The Macs seem to be a popular choice, according to statistics; and until this year Apple had a very enticing Back to School offer: a free iPod Touch with the purchase of a Macbook. I expected the offer to continue and was waiting for a refresh to the 13" Macbook Air. Apple announced their Back to School offer for this year and I was disappointed. It is a $100 iTunes Store credit that one can use to buy applications or media. Microsoft had announced their Back to School offer before Apple and it now seems like a better deal. An Xbox 360 free with a $700 PC is a bargain.

The base Xbox is available at $200 while the 8GB iPod Touch is $230. It is amusing how a game console is cheaper than a portable music player, but keeping that aside, the price difference between the devices isn't huge to the end consumer. The choice is quite personal: a portable media player that can do free video calls and games vs. a gaming console that can be used with the hottest selling accessory, has the best gaming experience and access a huge portfolio of multimedia content.

This brings me to up-sell on these devices for both companies. In Apple's case, apps, books, games and multimedia on the iTunes Store generated revenues of $1,782,000 in 2010 with 82.7% market share. (Asymco says the App Store generated $3 billion in sales.) Users download a lot of apps. Some numbers about the iPod Touch and iTunes store:

  • Average iOS user will download 83 apps in 2011 compared to 51 in 2010 (Source)
  • App downloads have overtaken song downloads on the iTunes Store (Source)
  • More than 50% of the iPods sold were iPod Touch devices (Source)
  • More than 15 Billion apps have been downloaded. (Source)

Comparing this to the revenues Xbox generates for Microsoft:

  • Xbox LIVE has more than 30 Million members
  • 53 Million Xbox 360 consoles
  • 40% time spent on XBox is for non-gaming activity (Source)
  • Xbox (console, Kinect and LIVE) were responsible for Microsoft's strong Q3 results (SEC Filing)

Xbox offers Live TV, Hulu, Netflix and access to the Zune marketplace. Point being, both devices are not a onetime investment for the customer, they are gateways to revenues for the companies and partners through value added services.

While writing this piece I came across an article where analysts are predicting death of the iPod. A lot of users own iPhones, it offers the same features as the iPod Touch and more, so does the iPad. According to Apple's numbers, Macs and iPhone or iPads make for the preferred combination and in such a scenario, a $100 store credit does make sense. However, I prefer to have a dedicated music player, primarily because I can survive with a media player with no battery but not a phone with no battery life.

Many consumers who buy the Macbook won't be buying the iPod Touch. While the deal offered by Microsoft is more value for money for the consumer, unfortunately the PCs don't compete with Macbooks. For example, the base Samsung Series 9 is $1650 and a similar Macbook Air is $1300 (minus i5 & backlit keyboards, both are expected as part of the refresh most likely at the same price). The Macbooks are good hardware but a $100 store credit doesn't entice me. I would have spent that $100 even if I got the free iPod Touch, and herein lies my dilemma: Do I go for the better PC or the better Back to School deal?

See also:

Topics: Laptops, Apple, Hardware, Microsoft, Mobility

Manan Kakkar

About Manan Kakkar

Telecommunication engineer with a keen interest in end-user technology and a News junkie, I share my thoughts while preparing for my Master's in Information Management.

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39 comments
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  • Good till...

    The end.
    In my experience the average school notebook purchase is not a Samsung 9 but more likely a base end Dell or HP for well under $1000.
    This makes the $700 pc and Xbox a smoking deal!

    Yup - kids in school. Count me in :)
    rhonin
    • RE: Microsoft vs Apple: The back-to-school battle

      Back to School with a XBox 360! I don't think so!

      The 100$ deal is far better. There are a ton of Educational based apps on the iTunes Store. Giving a XBox free as a Back to School deal seems retarded!
      Tanmay007
      • RE: Microsoft vs Apple: The back-to-school battle

        @Tanmay007 I found the x-box 360 only comes with SELECT overpriced blue ray equipped Dells over $699.00. So if you buy a $1000.00 Dell wi<a href="http://www.tran33m.com/vb/">t</a>h what you need and want on it you DO NOT get a free x-box. Very disappointed in this pro<a href="http://vb.maas1.com/">m</a>o!
        alasiri
    • RE: Microsoft vs Apple: The back-to-school battle

      @rhonin

      Sad comment on the US. Kids spend all their time playing video games instead of studying how to build them. If this is an educational purchase, an Xbox should not be part of the consideration. A $100 of software would be more useful.
      jorjitop
      • RE: Microsoft vs Apple: The back-to-school battle

        @jorjitop

        You're right, they shouldn't watch TV, go to parties, play, or do anything other than go to class and study. How dare they even consider an Xbox.
        youngmaester@...
      • RE: Microsoft vs Apple: The back-to-school battle

        @jorjitop If the kids were studying on how to develope them, then they would most likey need an xbox themselves to test it on. And it is $100 of free apps, which SOME are educatoinal, not software.
        Kochin
  • Is this not an Apple vs PC vendors battle?

    as Apple is competing with Dell, Hp, Acer, ect.?
    Tim Cook
    • RE: Microsoft vs Apple: The back-to-school battle

      @Mister Spock
      That's a good point, but it is Microsoft's freebie.

      The above analysis is fine: ultimately this is subjective. I would have discussed applications that come with the systems. Lion's synchronization services might be a deal-maker, though at the moment it's not launched and may have a rough start-up.
      DannyO_0x98
      • RE: Microsoft vs Apple: The back-to-school battle

        @DannyO_0x98 <br><br>compared to what? Sky drive?? Oh it does the same stuff but better....

        Why would i want 3 copies of a document on 3 devices, rather just open and edit it in the cloud and have it stay there...
        daniejam
      • RE: Microsoft vs Apple: The back-to-school battle

        @daniejam [I]Why would i want 3 copies of a document on 3 devices, rather just open and edit it in the cloud and have it stay there...[/I]
        Well, let's see which of the numerous reasons should we use. Oh what the heck, how about the blindingly obvious one that if you aren't connected and your document is in the cloud you are screwed. Seems like a pretty good reason to me.
        non-biased
  • Gaming in school? This is a priority?

    That, my friends, is why all the engineers and scientists come from other countries, and all we are left with is a class of Pixar wannabees.
    tomogden
    • RE: Microsoft vs Apple: The back-to-school battle

      @tomogden
      Who said they were gaming in school? The PC comes with a free XBox, that doesn't mean that the XBox must go everywhere that the PC goes, nor does it mean the XBox will be going to school with the kid.
      swmace
      • RE: Microsoft vs Apple: The back-to-school battle

        @swmace
        So where do you think it goes?
        WebSiteManager
      • RE: Microsoft vs Apple: The back-to-school battle

        @swmace No it doesn't but odds are the vast majority will.
        non-biased
    • RE: Microsoft vs Apple: The back-to-school battle

      @tomogden

      well if this was what you got from that, then does that mean a kid will be spending a $100 itunes voucher in school? Common sense evades some people......
      daniejam
  • RE: Microsoft vs Apple: The back-to-school battle

    I choose Microsoft to win the battle.
    LoverockDavidson
    • RE: Microsoft vs Apple: The back-to-school battle

      @LoverockDavidson

      MS can have the battle.
      I choose Apple to win the war.
      itguy10
      • Neither you nor Loverock have it right...

        Things are not as simple as winning a "battle" or a "war", especially when there are different battlegrounds.

        When it comes to the OS wars, which Microsoft is wanting to win with the enticement of XBOX, Microsoft has already won that war; they just want to add to the winnings.

        When it comes to iPods and iTunes, Apple has already won that war. But, they'd like to add to their winnings in that area too.

        I think they both will win, because, there will be increased sales for both competitors because of their different offers.

        However, on a practical scale, the XBOX offer is a much better deal.
        adornoe
      • RE: Microsoft vs Apple: The back-to-school battle

        @adornoe@... I beg to differ at least on this point...[i]Microsoft has already won that war; they just want to add to the winnings.[/i]
        Based on several studies I saw last fall a higher percentage of incoming freshman were on OSX versus Windows so the war from students is still being waged and for the first time Apple is pulling ahead in at least one group.
        non-biased
      • non-biased: I would bet that...

        when it comes to students, at a college/university level or any other education level, would have at home or at their disposal, more Windows-based devices than Apple devices. The battle for usage in schools is still very minor or irrelevant when compared to the whole battleground. In the overall battle, Microsoft has won.
        adornoe