Why Apple's new ad campaign is genius, and why Microsoft can't win as 'PC'

I just got off the air with KCBS San Francisco, speaking about Apple's new ad campaign against the PCs of the world (which I wrote about yesterday) on the morning show. I made a few points about Cupertino's strategy in the short segment, but I thought I'd flesh out my view a bit more here.
Written by Andrew Nusca, Contributor

I just got off the air with KCBS San Francisco, speaking about Apple's new ad campaign against the PCs of the world (which I wrote about yesterday) on the morning show. I made a few points about Cupertino's strategy in the short segment, but I thought I'd flesh out my view a bit more here.

The most notable takeaway from Apple's new ad campaign is that it completely ignores Microsoft's own "Laptop Hunter" advertisements. Instead of chasing Microsoft down the path of absolute cost, Apple is staying above the fray -- and taking potshots from above.

Many people forget that Apple is, especially with regard to their PC arm, a premium company. The branding of the company is supposed to feel "cool" and "exclusive" (but not out of reach exclusive....think "coveted"). We all know this, and yet we debate endlessly about an Apple tax. It doesn't make sense.

Neither does it make sense to pit Apple's ads against Microsoft's, foremost because each company is attacking the other on different fronts. Microsoft is spotlighting value, while Apple is spotlighting quality. They're nearly at odds with each other -- apples and oranges, as the old saying goes. Both companies are debating straw men.

Microsoft's take

Is it any surprise that Apple is being attacked right where it enters the laptop category -- $1,000-$1,500? By that measure, the company only has one model to offer -- while there are a veritable army of PCs with different configurations and price points. Thus reveals Microsoft's straw man: the $1,000 Apple laptop. It doesn't exist, but Microsoft wants you to think that Apple is too snooty to fight at that price point. In a sense, it is -- because it fits the company's brand and portfolio not to.

But Microsoft Windows doesn't have that option. It must be everything to everyone.

The unspoken sentiment is that you can buy a sub-$1,000 PC that has the capabilities of a $1,300 Macbook. Perhaps that's true part-for-part, statistic for statistic. But as has been previously noted by other critics, there are the unsaid costs of service, quality, design -- all of which are undeniably in Apple's favor at the moment.

However, it's too difficult to put a price on those elements. Those are Apple's signature touches. So...

Apple's take

What Apple wants you to believe is that, whatever the price point (but especially if it's lower), PCs do not deliver on quality. Sure, you get the parts you get on paper, but you'll be loaded with trialware, a million confusing configurations, probably poor design and doubtlessly a shorter lifespan.

But Apple can pull of taking potshots at PCs and still seem like it rises above the fray. Why? It is attacking a non-entity; the company "PC," which is really an amalgamation of vendors.

No doubt that Macs are made from other manufacturer's parts. But Apple stands behind it all, from OS X to the keyboard. Microsoft can't do that -- it can only stand behind Windows.

This is why Apple's ad strategy that ignores the Microsoft ad campaign is genius. Because if it engages in a fight over just the operating system -- and why would Apple do that, when it has so much more to offer? -- it may very well lose.

Windows vs. Mac in terms of operating systems is simply a matter of preference, barely more.

It's at this point that KCBS anchor Stan asked me, "But is it machine versus machine, or operating system versus operating system?" noting that Apple is a closed system. Both companies are looking at that fact to their advantage -- Microsoft is attacking Apple because it won't give the consumer freedom of choice (and thus cost), and Apple is attacking Microsoft because it can't ensure quality control like Apple can with a closed system.

Both sides of this point is true.

The same goes for the inverse problem: Microsoft only makes the operating system, and can't vouch (beyond an agreement) for the quality of the umpteen million PCs out there. That goes to show how hard Microsoft's job is -- it must guarantee a quality experience on a zillion different configurations with a zillion different parts without having any say in the process. But it also goes to show how misleading each company's argument is against the other.

The reality

The problem for both Apple and Microsoft (as stand-in company for "PC") is one of image, not actual quality -- though PC manufacturers are understandably less consistent than Apple. Apple has cemented its image and brand identification because it has more to control, from OS to system to service to stores. To date, Microsoft has only the OS: it doesn't manufacture systems, it doesn't service PCs that run on Windows unless the problem is distinctly with the OS, and it doesn't have a store presence (yet...).

Again, that shows you how hard Microsoft's fight is, but it also shows you why Microsoft can't win if it argues about hardware or service or physical presence.

Simply stated: Microsoft can't win if it embodies the PC role. Big as the company is, it simply doesn't control enough of the process to make arguments on behalf of OEMs.

Which is how we arrived at the price point argument. Problem is, Microsoft doesn't set the prices for PCs...just its own operating system. So it's a bit of a false pretense; a valid point shouted from the room next door. Which is why the "value PC" argument may stick with consumers, but the "value Microsoft" argument does not. Microsoft is simply not enough PC to make the argument versus Apple, through and through.

Which brings me to my last point: by the end of this year, we should expect to see next-generation operating systems from both Microsoft, in the form of Windows 7, and Apple, in the form of OS X 10.6 Snow Leopard. Both versions are "updates," and not radical reinterpretations of, their predecessor OSes.

If Microsoft wants to make up some ground, it should attack Mac OS X, and leave HP and Dell to assault Apple hardware.

The problem, of course, is this: when you're on top, the only place to go is down. Microsoft has everything to lose. The biggest argument it can make is by simply maintaining the quality of Windows and insisting on the quality of the systems it ships on.

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