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Ballmer: "I'm a PC" ads effective against Apple

According to Microsoft CEO Steve Ballmer, the company's latest round of "I'm a PC" have allowed the Redmond giant to claw back lost market share from Apple.

According to Microsoft CEO Steve Ballmer, the company's latest round of "I'm a PC" have allowed the Redmond giant to claw back lost market share from Apple.

The reason, according to Ballmer, is that the ads focus on cost, and at a time of recession, buyers are more price sensitive than ever.

During a Q&A session following his Worldwide Partner Conference keynote speech, Ballmer had the following to say:

"All of our research shows that our 'I’m a PC' ads, that talk dramatically about the price of Macintoshes, work quite effectively ... We've gained market share quite effectively against Apple over the past six to nine months"

There's data to back this up too.  According to NPD Group, during February Windows-based PC sales increased 22% year-on-year, compared to a 17% gain for Mac systems.

The reason seems to come down to price. Again, according to NPD, the average selling price of a Mac in February was $1,500, compared to $555 for Windows-based systems. At a time when people are counting the pennies and the credit card isn't as flexible as it once was, Macs are once again becoming unattainable for some.

Note: What's interesting is that sagging Mac sales don't put a damper on the company's bottom line because Apple profits are buoyed by iPhone and iPod sales.

Apple gave Microsoft a batter with its ads for several years, but it seems that the days of laying down to take a kicking are over. On top of that, with Windows 7 on the horizon Microsoft knows that it has a much better product to push than it did with Vista (at least it doesn't have all that baggage of a bungled launch that Vista had). The Windows 7 effect will almost definitely allow Microsoft to claw back more market share from Apple.

But it's not all down hill for Microsoft. The company is vulnerable at the budget end of the market, especially netbooks. Linux infiltration here (however unlikely that might be) could cause problems in the future. Equally, Apple currently pulls in a healthy 35% profit on hardware, so there's plenty of wriggle room here to cut prices or introduce cheaper hardware. A $500 Mac (that's not a Mac mini) would put tremendous pressure on Microsoft, and the Windows platform as a whole.

Thoughts?

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