RSSAnalyst Roger Kay takes a cue from the NAB, with the 'Mac Tax'
By Scott M. Fulton, III | Published April 10, 2009, 5:42 PM
It should be no surprise, especially to long-time Mac users, that noted analyst Roger L. Kay, currently with Endpoint Technologies, is a supporter of the Windows "ecosystem." His opinions with regard to Windows are very much on the record, and he and I have often joined together with our colleagues, in brisk, lively, but fair discussions about the relative value of software and hardware on different platforms.
So frankly, Kay's latest white paper (PDF available here) which is a cost examination for home users planning complete at-home networks on Windows vs. Mac platforms (which Microsoft admits to having sponsored), comes to conclusions which should be no surprise to anyone on two fronts: First, Kay illustrates how much more individuals are likely to pay for Apple versus brand-name equipment from suppliers such as Dell and HP. Second, Kay takes Apple to task for charging a premium, and that he's done so isn't news either.
Not even Kay's key metaphor is particularly new for Kay; those of us who've carried on conversations with him have heard it before. But this week, Microsoft has been pushing Kay's white paper by attaching itself to that metaphor -- one that has the strange ring of a similar political approach being taken by the National Association of Broadcasters, on a completely separate issue. Kay -- and Microsoft -- are calling the extra money some customers are willing to pay for Mac equipment an "Apple tax."
"For the past several years, Apple has been gaining share based on improved product offerings and an aggressive advertising campaign as well as Microsoft's stumble on Vista," Kay writes, shocking no one. "The combination of Apple's great execution and Microsoft's missteps has led a lot of converts to the Apple world. Mac is in flood tide. Cool is in... Or was in. Until the economic landscaped changed. Now, formerly carefree spenders are taking a sharper look at how much that cool really costs. And, oh, by the way, is it really so cool, while we're at it?"
Kay's current message plays very well to Microsoft's current marketing message for Windows-based PCs...eerily well. In the last several days prior to the release of Kay's white paper, we've heard and read a lot about the Mac tax, whose symbology is apparently designed to convey the impression that Apple users are paying more for essentially the same equipment and performance. Kay himself has been part of the buildup, writing in BusinessWeek last month that Apple has been a victim of its own success in recent months, as evidenced by the rising number of malicious attacks against the Mac platform.
One can't help but notice how well-produced Microsoft's own presentation of this message is being handled, including the IRS tax form mockup featured in Brandon LeBlanc's blog post yesterday.
There's a certain political ring to Microsoft's metaphor of choice, an unavoidable resemblance to the NAB's campaign against the removal of performance royalties exemptions from terrestrial radio stations, a subject of heated deliberations in Congress for the last three years. The NAB's campaign this week was given the name "No Performance Tax," and paints the recording industry as a cartel conspiring against the entire music promotion business, to collect from broadcast radio what it collects from Internet radio.
It's not a real tax, of course, but the way it's portrayed has made some believe that Congress is truly deliberating a real tax, a surcharge. Kay's language in his white paper isn't that sneaky, but the metaphor can be construed to present a picture that Apple is the principal recipient of a windfall surcharge -- in his hypothetical case, nearly $3,400 more being spent for a complete Apple-based home network, over comparable Windows-based products selling for under $2,700.
But there's a few key facts that Kay left out. First of all, nothing at all about his hypothetical family's PC system of choice -- comprised of Dell and HP PCs, and accessories from notables such as Linksys, LiteOn, and Iomega -- is as hard-wired to Windows as the Apple-based system's parts are to Mac OS. To be fair, Kay's comparison is one between an x86-based platform where Windows is pre-installed, and one where Mac OS is installed -- and in the former case, a home user could choose Linux.
If Linux entered this discussion, then Microsoft's typical argument against Linux could kick in. I've heard it before, even recently: Users will willingly pay something extra for reliability, for performance, for having real companies backing them up when problems arise, for having the better software. If there's a premium, then at least it's worth something. Now, if that argument sounds familiar, it's because it's the same argument Apple has used since the early 1990s to back up the "Mac premium;" and if Microsoft's avoiding echoing that argument, it's probably playing it smart.
Secondly, the tax metaphor gives the impression that Apple is reaping a huge surplus for essentially the same equipment. It's not. Gross margins for Apple aren't terrible, but they haven't been great in recent months. At about 33% overall and flat, Apple does make more for its equipment than competitors such as Dell (18%), but it's not 74% -- which is a conclusion one could draw from Kay's numbers if he were to do the math the wrong way.
Perhaps more importantly, though, it seems a little sad that after all these years of allowing others to make its case for it, Microsoft's first serious charge at Apple is based around something as plainly obvious to everyone who's ever purchased a Mac as its relative expense. By avoiding the qualitative side of the argument -- and I actually believe there is one -- Microsoft is leaving itself open to a counter-attack. And my fear is that Apple, clever as it may be, will create a professorial, number-crunching, metaphor-generating character to represent Microsoft's case...a character who, to some of us, at least, might look a little familiar.
Yawn...
And 'someone' paid for this information?!?! LOL!
There is NOTHING unusual in paying extra for that which is unique, different, trendy, stylish, or which offers additional option.
It ranges from tennis shoes to clothing to automobiles, to you name it.
Does the price always correlate directly to value? No. No news there. Does the price correlate to percieved value. Usually. Is the value of the higher priced product always spurious. Sometimes yes, sometimes no. Sometimes the price is purely a function of what the market will bear, other times it is mitigated by economies of scale, especially if it is a niche product.
Is BluRay a superior quality product? Sure. Is it worth the price differential? Many say no. Is an Accura or Lambirghini necessarily worth 5 times+ the price of a Toyota or Honda? Not necessarily. But one could argue that they provide additional functionality. But then it is the user who must judge if said differences are worth the price differential. Some say yes, some no.
The Mac offers design style - is this worth a substantial price difference? For most, perhaps not. Does the Mac offer a differential in value added performance in its ability to run both Windows, Linux and OSX and to posess the ability to talk to the Windows and UNIX platforms natively? For many the answer is an unmitigated yes. For others who believe the ability does not and who can't figure out how such an additional choice would benefit them - no.
But what is really funny is to listen to those who find no value in the additional functionality worrying about others who have such a use.
It is akin to listening to someone who finds value in a bare bones Toyota, who only drive to the store, whining about others' preference for a large vehicle which affords them the ability to pull a trailer or a boat.
And one wonders why those for whom a Toyota will suffice worry about those who would like to have the additional functionality. THAT is the real nonsense here. If the purchase serves ones purposes, it is appropriate. THAT is the real measure of its value. Not someone's emotional reaction to what they feel is only appearances.
But the 'study' is not only trite, but it pretends to offer new insight into the subject of market dynamics that is ALREADY well understood.
And as such, it adds nothing to the discussion except its own emotional baggage. But its funny that the Windows crowd is so worried about a platform whose advantage is that it is capable of running not only Windows, but OSX.
And poor MS, the LARGEST Mac developer would be wise to instead address the significant customer dissent against Windows rather than to worry about a platform for which they make significant profit as well.
But then it is humorous to watch as so many here worry about what others are using instead of simply using what suits their own purposes.
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|True words.
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|Apple users can say what you want, but they've been gouging you on their products for years, while at the same time whining about Microsoft for years, and their "monopoly". Using the Pinto exanple is perfect, except i wouldn't have paid 10 grand for a 6 grand car. if apple wants to go mainstream, they should open up their OS to PC boxes without having to do an enema to get what should be available to everyone. Maybe Microsoft should make it so their OS wont let any Apple products play nice with theirs. I'd start with I-Tunes. BTW, Microsoft sucks too, At least Jobs knows he's an elitist .
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|I think the whole reason Apple has continued to offer a better and more reliable experience is simply because they've locked down the OS to their own, particular hardware. Without having to deal with literally millions of hardware combinations, they're able to offer far superior reliability testing. And it shows.
But personally I'm not interesting in buying a Mac either. I can see the value in the OS, but I can't justify the price difference. Maybe when I'm a little more flush I'll consider it. :P
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|*Yawn* Get the real facts people: http://www.computerworld...c&articleId=9131444
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|The old adage "You get what you pay for" is especially true in the case of Apple/OSX vs WinMachine/MSWindows. Windows is a continuous headache for myself and I am definitely a "power user". I pity even more the average user who falls for the "Microsoft is cheaper" baloney. Cheaper, ya, so was the Pinto.
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|I'm not sure what part is more entertaining. Your post, or that you actually believe it.
A Mac is just another computer, and has plenty of headaches in store for a average user, no different than a Windows-based PC.
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|I'm not sure what is more entertaining, your post or that fact that you believe that utter stupidity you just posted? You're right, a Mac is another computer... a Faaarrr better one with a significant less amount of headaches day to day than what you'd experience on a PC.
If on that rare occasion you do experience a problem on a Mac you can visit your local Apple store and get free technical support and get it fixed by the same company that designed the hardware and software with or without a warranty.
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|Sorry.
But while you may not see the value, nor recognize the differences, they do exist.
And judging from the customer sat numbers for 20+ years, still far more disagree.
Use whatever you like, but there are differences in the elegance and maintenance of the 2 systems. And while one may suffice for your needs, they are not the same, and Winodws does suffer from more basic functional issues than does OSX - issues that result in one having to reinstall a system.
Your assertion that a Mac is "no different than a Windows-based PC" is simply nonsense - except when it is running Windows, and then it will experience the same issues that plague Windows.
But it always nice that a Windows user finds it necessary to worry about the Mac - a platform that they maintain is of no interest to them - instead of simply ignoring it. But then, psychologists have names for that.
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|I don't recall ever saying that Apple or Macintosh is of no interest to me, I would actually be very interested were it not for the lack of customizability paired with the outrageous price tag. Furthermore I did not say there was no difference between a Mac and a Windows-based PC, I said a Mac has issues, just like a Windows-based PC does. I've dealt with plenty of headaches caused by both Microsoft and Apple products.
I'm not entirely sure where Apple fanboys get this idea that Apple software isn't written by humans like every other program out there, but perhaps they are the ones who need some other form of "help".
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|A Mac is just another computer, and has plenty of headaches in store for a average user, no different than a Windows-based PC
What is amazing is that you think everyone is responding SOLELY to YOU?
"I don't recall ever saying that Apple or Macintosh is of no interest to me, I would actually be very interested were it not for the lack of customizability paired with the outrageous price tag."
LOL!
So you would be interested if blah blah blah, as opposed to your not currently being interested... as was properly stated. Try to curb your enthusiasm.
And I am sick of the anti-Apple fanboys showing up to b!itch about Apple at every mention of the word as they claim not to care about Apple.
Aren't there enough articles extolling the pristine Windows environment free of trials and tribulations? Oh, but wait, Windows has "plenty of headaches instore for the ...user" So you muct have a few free moments before the next list of critical exploit patches are downloaded or before you must reinstall your OS.
The irony is that if someone disagrees with a patently political phoney 'study' against Macs, it makes one an Apple fanboy in your asinine POV. But then, you are the one who has INDEED said that the Mac is "NO different" in its user experience. "NO DIFFERENT".
Go back and read YOUR words, nitwit.
Regardless of what platfornm suits your needs or preferences, your statement is complete and utter nonsense. And the customer sat figures for more than 20 years have consistently said the same thing. You are wrong. And that is avaible for anyone to peruse, regardless of what platform one might like.
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|TLDR
Blah blah blah
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|Check your facts on warranty and maintenance.
You can NOT get FREE support on a MAC that out of warranty (12 months usualy). and You will pay higher premium to get Apple Store to work on it than taking any PC to a reputable repair shop. With a lack of shops thatwork on apple, you dont have any choice but to pay the premiums for support.
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|Supply and demand. If people demand something enough, you can get them to supply more money for it.
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|"Kay's current message plays very well to Microsoft's current marketing message for Windows-based PCs...eerily well."
Since Microsoft *PAID* him to write this piece of Marketing fluff, it should be no surprise that it plays very well to Microsoft's marketing message. "Sponsored by Microsoft" means it's a paid writing assignment. This is NOT a "white paper;" it's a "green paper," putting green into Kay's wallet, and containing some beautiful examples of Samuel Clemen's comment that, "figures don't lie, but liars sure can figure." Kay has not compared equivalent systems at all, nor has he calculated the hidden costs of paying for the "trial version" of software that are bundled into Windows OEM PCs, necessary to get the same functions that come bundled for free with a Mac.
I get paid $120/hr with a 2 hr minimum for outcall service on Windows PCs; I know what they're about. If I were buying a new computer, it would be a Mac, because I don't need to spend my valuable time keeping my own system limping along, as Windows is wont to do.
Microsoft may not realize what they're telling the public, but the message is clear: Windows PCs are cheap crap. And Kay is telling me he's a cheap wh***; he'll sell his integrity to Microsoft, and in fact, he has.
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|You guys hiring?
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