Apple Gets Suckered by Microsoft

(MoneyWatch)  Recently, Tom Krazit at CNET pointed out that Microsoft had played into Apple's hands with the company's latest advertising campaign. The approach effectively conceded that Macs offer a better computing experience and that all that PCs have to offer is a price advantage -- at least one on initial purchase. But rather than maintain its market position, Apple has decided to fight back, undercutting its brand and historically effective competitive strategies.

The first salvo from Cupertino appeared by way of a comment by Apple to BusinessWeek on the Microsoft ads -- an action in itself so rare as to command attention. The context was an article in which Arik Hesseldahl goes to lengths in an attempt to show that a PC requires additional spending to get equivalent virus protection, a suite of multimedia tools, and so on. Apple's comment was as follows:

"A PC is no bargain when it doesn't do what you want," Apple spokesman Bill Evans says. "The one thing that both Apple and Microsoft can agree on is that everyone thinks the Mac is cool. With its great designs and advanced software, nothing matches it at any price." Microsoft declined to comment.

Little wonder why Microsoft refused to comment. It had finally lured Apple into its home field in a long-standing marketing battle.

Perhaps Apple is trying to be sensitive to economic reality, or perhaps this is a reaction to seeing its U.S. computer market share drop from 8 percent to 7.4 percent during the fourth quarter of 2008, a significant reverse after it had been taking market share from PCs. Whatever the reason, the company now has a problem because to undertake the view that a PC is a lesser machine because it costs additional money to add the same features.

Not all the analysis is correct. For example, the notion that an Apple is safe without running an antivirus package is simply incorrect. And the vast majority of consumer and business buyers probably don't care about advanced multimedia tools, as simpler ones do all that they require.

More importantly, though, these types of counter-arguments don't matter in marketing, because they assume that people buy rationally and not emotionally -- something that Apple, of all companies, should know. There is a reason that politicians focus on sound bites and that effective advertising is often driven by visual imagery. You win when you get the customer in the right emotional state, not in the right intellectual one. Anyone who has worked in marketing can tell you that the "Oh, yeah?" tone emotionally conveys defensiveness and an attempt at verbal sleight of hand.

In addressing the issue of price in the least way, Apple has unintentionally accomplished a few things:

• It has told Microsoft that the ad campaign is stinging. That's like asking a tease splashing water in your face in a pool to stop because it bothers you.
• It has said that price is a significant factor, which runs counter to its usual marketing position as a vendor of premium products. This is an argument that Apple cannot win without rhetorical contortions, which means it cannot win.
• Apple's reasoning is questionable at best. Should people other than current Mac fans take the time to consider the validity of the arguments, which they probably won't, they might conclude that Apple doesn't offer the value it tries to stress.
• In acknowledging the validity of pricing arguments, Apple has opened the door to people asking why the net sale per average Mac unit was $1,469 last year. In economic bad times, that's a whole lot of money for a vendor to pocket after the cost of the product.

And before the wave of Mac clones come by, I'm not arguing relative worthiness, but marketing tactics. Just as much as Microsoft had played into Apple's hands before, Apple couldn't do as it usually does, remembering the power of quiet, and walked right into Microsoft's grasp. As I've suggested before, playing the pricing game isn't necessarily good for Microsoft. But it will be a disaster for Apple. Expect more piggy bank ads in the near future.

Punch image via stock.xchng user jzlomek, standard site license.