Microsoft cuts Office price on new US Macs

Are Apple and Microsoft best buddies again? Err, probably not...

Microsoft has an unusual Oktoberfest for American Mac users: a big discount on Office when purchased with a new computer. Beginning today, buyers of new Macs can pick up the full version of Office v. X for $199, or about $200 less than the full purchase price. The promotion ends 7 January, 2003. As good as that deal appears, Office is cheaper for Windows users, particularly those getting the product on new PCs. New PC buyers pay as little as $100 for Office. Mac users not buying a new computer also are stuck with paying full price, as much as $299 for the Office v. X upgrade or $499 for the full version. "That's not that big a deal," IDC analyst Roger Kay said. "That's a bundled incentive to buy a Mac, which is not the same thing as pricing Office at $200. It's not really a price decrease, but it does hint at this issue where parity says Office ought to be [in price]." Still, the bundle deal could help achieve some equilibrium between the cost associated with getting the Office suite on Macs compared with PCs. The bundle also could spur adoption of Office v. X, which Microsoft in July admitted was well-below projections. The company had expected to sell 750,000 copies of Office v. X but had sold only 300,000. Tim McDonough, director of marketing for Microsoft's Macintosh Business Unit (MacBU), declined to give current sales figures on Monday. "I'm not going to give you a number, but I'm feeling pretty good about the business right now," he said. McDonough also could not give the number of users of Office for Mac. Earlier this year, MacBU estimated the number to be 3.5 million, down from about eight million five years ago. The bundling deal, which has been in the making since at least early summer, comes as the relationship between the two companies has cooled considerably. Microsoft unleashed a barrage of forthcoming products that competed with Apple during the Macworld trade show in July. At the same time, the Redmond-based company blamed lacklustre Office v. X sales on Apple's promotion of Mac OS X. MacBU General Manager Kevin Browne, who soon ends a sabbatical, said that Apple spent 20 times more on marketing the iPod music player than Mac OS X. One sign of reconciliation might be seen by which company is footing the bill for the promotion, something McDonough would not address. "We're not willing to discuss the business relationship behind the promotion," he said. But McDonough and Phil Schiller, Apple's senior vice president of worldwide marketing, did acknowledge both companies would pay up for marketing the promotion. Schiller made it clear that promoting the bundle would be just one aspect of Apple's overall marketing strategy. By contrast, the bundling promotion "is our primary focus," McDonough said. The new bundle replaces a smaller deal that expires on Monday. The earlier promotion offered a $50 mail-in rebate on the Office v. X upgrade and $100 for the full version. Joe Wilcox writes for News.com