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Microsoft is stepping up the Mac versus PC battles by fighting Apple on its own turf.

The two companies have been running competing Mac Vs. PC ads. And this winter, Microsoft announced that the company would open retail stores similar to Apple's. Now, the software giant is saying those stores will be right next door to its competitor.

Speaking at the Worldwide Partner Conference this week, Microsoft COO Kevin Turner dropped the news:

"And stay tuned, because we're going to have some retail stores opened up that are right next door to Apple stores this fall. Stay tuned, just stay tuned."

While a side by side comparison of Apple and Microsoft store design is likely a losing battle for Microsoft, the company is hoping that it can outperform Apple on price. And that strategy has been working well so far.

The company took the bait from Apple after years of being pummelled by the company's popular Mac vs. PC ads starring Justin Long and John Hodgman which paint Microsoft products as stodgy, buggy and inept. But starting last year, Microsoft started testing out that comparison with its own ads. They hired their own Hodgman look alike, embraced a populist image and launched a series of "PC Hunters" ads. In the ads, Microsoft gives consumers $1000 or $1500 and lets them loose to purchase their own laptops. After oogling Apple's design, the shoppers go to the Microsoft computer when it comes time to make a purchasing decision.

That's clearly the reaction that Microsoft is hoping to inspire by placing its stores so close to Apple's.

Since starting its comparison campaign, Microsoft has grown its PC sales. Meanwhile, Apple has lost marketshare in the first quarter of 2009. Especially in a recession, Microsoft is likely to benefit from a side by side retail comparison.

The ads are working so well that Apple has asked Microsoft to stop running them.

Speaking at the Worldwide Partner Conference, Turner continued:

"And you know why I know they're working? Because two weeks ago we got a call from the Apple legal department saying, hey -- this is a true story -- saying, "Hey, you need to stop running those ads, we lowered our prices." They took like $100 off or something. It was the greatest single phone call in the history that I've ever taken in business."

This effort is clearly not a comprehensive strategy for Microsoft. But it could be helpful part of the puzzle. And while Macs may have more exciting features and packaging, Microsoft has a lot to gain if customers burned by sticker shock come next door to see them.

Image: TechRadar

Meghan Keane

Published 16 July, 2009 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

721 more posts from this author

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Mike Pulsifer

Yeah, with 90% US market share, strengthening this anti-competitive monopoly is a "good thing," right?

about 7 years ago

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Shawn C

Couple of items...

Our mall already has an Apple store and a PC store. Granted, it's a SonyStyle store with it's own pricing scheme problems, but at least some shoppers can compare.

Even with that option, people are actually waiting in line to try an Apple PC (yes, they are PC's) while no one is tinkering with Sony PC's - even as nice as they are. Go to any Best Buy, and you'll see more people at the Apple display than the regular PC display.

And don't forget, MS makes only the OS and software - not the hardware - and the hardware makers have to license the software from MS to put on their machines so MS has already made their money off every PC - sold or unsold.

...and a final point, all the people in the PC ads have been ratted-out as actors, not actual shoppers. Fault Apple for their obnoxious ads, at least there is a different grain of truth in each one - not just a single, repeated point.

Ultimately, the consumer will tell you how successful your product is - not advertising or pricing.

about 7 years ago

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ksantani

Finally, Microsoft figured out how to get an effective ad campaign and learned the art of attacking its rivals..!!

about 7 years ago

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Tech

Those ads are great. Apple did the same thing to them and now they're whinging about it.

about 7 years ago

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Thomas Brunkard, Account Executive at Bvisible Communications

Microsoft would be better served by watching Google.  A free operating system of a high quality and compatibility with their marketing push behind it combined with falling net book prices could mean that the developing world will end up Android users. 

This will ultimately remove the hegemony that Microsoft enjoy.  Mac's will still be for the rich, the power users, magpies and the creatives.  Google Android could be the one for everyone else...

about 7 years ago

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Velit Dundar

Good news for Microsoft but not great. The only way to compete in such tough times is by differentiate yourself from the competitors. Copying competitiors will not be your competitive advantage, However this action is first in its way for Microsoft to reaching consumer and give them the opportunity to compare both PC and Mac, still the strategy not clear to me. Probabaly the most obvious difference will be the price advantege for Microsoft. But not sure if price competiton is the best option in the long term from branding point of view.

about 7 years ago

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Travis

Hilarious! It's like walmart running attack ad's against, well, I can't think of anything else because walmart has out all the small scale competition out of business, lol. Good work microsoft, attacking a small company in a different industry than you ( apple makes hardware and software, ms makes software). Really shows who the bigger man is, huh?

about 7 years ago

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