Microsoft bangs 'Apple tax' drum once again

IDG News Service — Wed, 07 Jan 2009 09:31:10 -0500

Microsoft Monday again pushed its claim that consumers pay an "Apple tax" when they buy Mac hardware rather than PCs running the Windows operating system.

In an e-mail to reporters Monday, Microsoft repeated the argument it first made last October, a day before rival Apple Inc. was slated to make a major product announcement. The next day, Apple unveiled new MacBook and MacBook Pro notebooks.

Microsoft again pitted Mac prices against similarly-configured Windows PCs from the likes of Dell Inc. and Hewlett-Packard Co. Not surprisingly, Microsoft's comparisons put Apple's hardware at a disadvantage, with the "tax" ranging from 16%, or $100, for the entry-level Mac mini to 25%, or $300, for the lowest-priced iMac desktop.

Microsoft also played the recession card as it knocked Apple's prices. "We're in the midst of difficult economic times -- declining retail sales and lower consumer confidence," a Microsoft spokeswoman said. "People are...demanding more substance with their style in a computer. They simply do not have the luxury of spending more for less.

"Windows PCs are offering the best value on the market," she argued, "while Apple continues to impose high price premiums on their Mac designs, offering only modest discounts of 5 to 10 percent."

Prior to the holidays, some retailers did cut Mac prices , including the newest MacBook and MacBook Pro laptops, by up to 10%.

Microsoft's tax-talk timing was not coincidental: Apple will likely make several product announcements later Tuesday when Philip Schiller, the company's head marketing executive, gives the keynote to open this year's Macworld Conference & Expo.

CEO Steve Jobs , who has traditionally handled the duty, bowed out last month. Yesterday, Jobs announced that he is undergoing treatment for what he described as a hormone imbalance that has caused him to lose weight.

Ironically, Microsoft, whose Office 2008 suite is one of the best selling Mac programs, also hung the "Apple tax" label on software. "It's more expensive to replace your applications on a Mac and more difficult to find applications that work with a Mac," said the Microsoft spokeswoman.

According to the NPD Group, Apple's prices may be impacting sales . Retail Mac sales fell 1% in November compared to the year before, the research company said last month. "Apple's not immune to the economy," said NPD analyst Stephen Baker at the time.

Sales of Windows PCs during November, however, were up 7% over the same time the year before. "If December looks similar, if [Apple doesn't] crush the rest of the market [in growth], then that might convince me to say that they need to lower prices," Baker said two weeks ago.