I read the following quote today, said by Microsoft’s CEO Steve Ballmer (courtesy of All Things D):
“Frankly, the economy is good for us, because people do understand that Macintoshes are quite a bit more expensive for essentially the same computer.”
So he’s expecting to have strong sales, thanks to the bad economy. I disagree.
First, let’s just point out that Apple has not used the word “Macintosh” for ages. Get with it, Steve! It’s “Mac” now. So right there I feel like Microsoft isn’t really in touch with what Apple is doing.
And on to my main point. I don’t think it’s true that people automatically buy more inexpensive products when the economy is bad. Yes, of course things like lipstick sell strongly at those times, because people want an inexpensive treat. But a computer isn’t an impulse purchase. It’s something carefully considered. And in this market, people want something that will last. Something that they think has real value.
And in terms of value, I argue that up-front cost has little to do with actual value. It’s the value over the life span of the computer that is meaningful.
Let’s take the life of the PC. The view is that PCs don’t work that well and need more support. Partially that’s because of viruses, which can cause so many headaches (as can the anti-virus software, which can slow your computer down and cause real issues in terms of productivity). Partially it’s because the hardware and software are not made by the same company. Partially it’s because PCs seem to slow down more and more the older they get. And partially it’s because many PC problems require a real IT expert to solve them. So the costs over time can really add up.
Let’s now look at the Mac. Yes, a Mac may cost more up front. But there are virtually no viruses. The hardware and software are made by the same company so they work extremely well together. The Genius Bar can help you with so many Mac problems and answer a ton of questions, all for free. They routinely last for 4 or 5 years without needing much maintenance. Thus many users find it much more productive and they have less frustration and less down time. And okay, I guess we need to add in a little something for “coolness factor” which has some kind of worth, to some people.
All of the above added together is worth a lot. So Steve, a Mac is not the “same computer” as your PC. Cost is not the same as value.
And Steve, have you seen Apple’s fiscal Q4 earnings? Net income $1.7 billion, well above estimates. Record sales of 3.1 million Macs (up 17% from a year ago). A growth in market share to a 15-year high. (All numbers courtesy of CNN’s article.) So obviously people are buying Macs in this economy. Again, cost is not the same as value.