Saturday, May 02, 2009

I'm just not cool enough to be a Mac Person

Several students have brought to my attention these commercials framing Apple Macintoshes as being overpriced and lacking in features that consumers want.  The Laptop Hunters series of ads is here {may need Silverlight plugin}.

Apple has always been at the higher end of pricing.  I'm dating myself by saying I bought an Apple //e in the early 80s for $1,976US, which is $4,153 is 2009 dollars.  Around that same time, the Apple Lisa was being targeted at business users, touting a graphical users interface {GUI}.  Here's a demo of  Lisa2/5, which went for about $5,500 {$11,561 in 2009 dollars}.  More on Lisa here.  The original Lisa was launched in 1983 with a sticker price more than an economy car: $10,000 {21,020 in 2009}.  Note in the video how slow it is and the huge hard drive.  The business targeted Lisa could have more than one program open at a time, something thae Mac couldn't handle back then.

The First Mac
The original target price for the first Mac in 1984 was $999 {$2,099 in 2009}.  Apple adjusted this upwards, as technology and competition shifted and had a target costing approach to price aimed at $2,499 {$5,253 in 2009}.  The original Mac was more powerful than NASA computers that landed a man on the moon, but were "128 KB computers with an 8 MHz 68000 CPU, a built-in 9" 512 x 342 black-and-white display, a 400 KB 3.5" floppy drive, a keyboard, and a mouse."  Memory was a limitation, as it was astronomical in price.  The Mac was able to ship a 512K Mac later in the year, but it retailed for $3,000 {$6,306 in  2009}.  In 1984, the Mac was underpowered for a computer with a GUI.  It brought many features to a "mass-market" computer, but the honeymoon period for Apple would be short.  Windows would be launched in late 1985 with compatibility with a vast majority of the PC market.

Competing on Price?
I'm not sure if competing on price is a good idea for Windows or PC assemblers {Dell, H-P, Acer, ASUS, LG, etc.}, even in a recession.  This is the age of the consumer experience.  Consumers want a good usability experience and a good brand experience, where the brand gives them meaning and they feel a kinship with the brand.  "Same features but lower price" isn't a compelling idea, no matter how likable Lauren et al. are.  It may even be a dangerous one, as it makes turns WIntel machines into generic commodities.  I think it's back to the drawing board, although Adweek disagrees with me.


linnyqat said...

Heh. I disagree with you too. I think it's a very effective ad. You're not the target audience because you're a Mac. I think people who don't know a lot about computers and just want something for e-mail, surfing and basic word processing don't care about the bells and whistles they get if they fork over an extra grand.

(I would like to know, where did you get the equivalent of 4 grand in the early 80s? Did you have a cocaine route instead of a paper route?)

Kenneth M. Kambara said...

First off, if there was an open-source or third party OS or hardware that was better than Apple, I'd be interested in it. I like the idea of competition. I think you know I almost bought an L-G Wintel laptop from Futureshop.

Even if it spurs short-term sales, the ad turns Wintel-based machines into an undifferentiated commodity. The ad can set the brand up for failure, in this case Microsoft & H-P, by wrongly framing expectations. The target for the ads will expect the laptop to be the equivalent of a Mac. They might go, "why is installation/removal of software more of a pain than on a mac?," "where is MY built-in facial recognition software?," & "why is my laptop giving me a hundred 'cancel or allows'"? If they're not aware of these differentiators, Apple will remind them.

The peeps who just want a basic machine to do wp, e-mail, & surfing the Internet will gravitate towards netbooks. So, who really wins here? The Chinese PC assemblers that are at the rock-bottom:: Asus, Acer, MSI, etc. The brand becomes secondary to price. Price-based competition is brutal. These ads now create an implicit "discount rate" for Wintel machines, compared to Apple.

In the early/mid-80s, I just may have been a disciple of Glen Frey.