“Microsoft has confirmed the broad strokes of a report that it is dropping the licensing cost for Windows. But it’s only doing so for PCs and devices that retail for less than $250. To be clear, there is currently no market for such devices,” Paul Thurrott writes for WindowsITPro (a domain name with a limited future if there ever was one – MDN Ed. 😉 ). “So Microsoft isn’t so much lowering the licensing cost of Windows as it is making it feasible for hardware makers to use Windows with a new category of super-cheap PCs and devices.”
“There’s an ugly side effect to this licensing change that hasn’t been highlighted enough. Those PCs and devices that do qualify for the cheaper licensing—$15 per unit compared with about $50 per unit on more expensive PCs—will be cheap in literally every way,” Thurrott writes. “Hardware makers won’t need to undergo a Windows logo certification process. This means that these cheap devices will often be very unreliable out of the box and can’t be made more reliable through automatic driver updates on Windows Update.”
“The problem for Microsoft is that lowering costs is the only strategy that makes sense, given how the market is changing. This decision was forced by competitors of the company: Unable to compete with Apple at the high end, Microsoft will now take on Android and Chrome OS for the masses instead,” Thurrott writes. “On the high end, all we see is Apple. This is the firm that makes the most expensive products in every conceivable category. A company that makes laptops that start at $1,000 and go up from there, even though the average selling price of a PC laptop is in the $400-$500 range. A company that makes high-res mini-tablets that start at $400 and go up from there, even though its competition is selling comparable devices that start at $230. A company that makes high-res full-sized tablets that start at $500 and go (dramatically) up from there, to as much as $930 for a fully equipped version, where its competition is playing in the $380 to $450 range, to start.”
“Apple is unique, for sure. Its margins dwarf any other player in technology. Apple’s customers are willing to pay more, and buy more frequently. They perceive a quality there, and it’s not entirely unwarranted,” Thurrott writes. “They see Apple as the BMW of the technology world, also not entirely unwarranted. Whatever the reason, Apple exists in a bubble and it’s a market no other player can touch. There is no Mercedes or Audi to Apple’s BMW. There’s just Apple.”
MacDailyNews Take: That’s right, bitch.
(Even a broken clock…)
Thurrott continues, “Windows Phone suffers from the same issue. Unable to create a single hit product at the high end… Windows Phone has only seen success in one place: The cheapest, third-worldiest part of the market. The Lumia 520 and its siblings dominate the sales and usage charts. Just not in America, where the Apple-crazed population, somewhat uniquely in the world, still thinks iPhones are something special.”
MacDailyNews Take: Bzzzt. Right back to the wrong answer parade we go!
Japan, the world’s second largest developed economy:
• Apple iPhones are the top 9 selling smartphones in Japan – December 8, 2013
• Not a typo: Apple’s iPhone 5s and 5c took 76% of new smartphone sales in Japan in October – November 27, 2013You see, wherever there’s money and quality customers with brains and money and the proven will to spend it, Apple dominates. Apple takes the lion’s share of the customers that matter and leaves the rest – the confused, the clueless, the cheapskates – to Android, Windows and whatever other consumer-grade, Apple knockoff crap is being peddled to the ignorati today.
Thurrott writes, “Am I worried about this trend? Obviously… Certainly, there’s a part of my personality that prefers any product that shoots for the masses and not the elite. That’s part of my knee-jerk reaction to everything Apple does: They’re so smug and condescending to normal people and their silly, average income levels. In addition, I’m a big fan of what I think of as ‘just enough’ computing, and I think it’s easy to overdo it with technology purchases. Somewhat alone among Americans, I’m always trying to downsize.”
MacDailyNews Take: People who buy Apple products certainly aren’t “normal.” In fact, they’re such crazy ones that they can see right past the sticker prices to the TCO. We Apple users generally spend a bit more upfront, far less over time, and gain far more enjoyment and productivity overall. That’s not overdoing anything. That’s simply the smart play. Because Apple product users are smarter than “normal.”
• Test proves Apple iPhone users are smarter than those who settle for other handsets – January 2, 2014
• Android users poorer, shorter, unhealthier, less educated, far less charitable than Apple iPhone users – November 13, 2013
• CIRP: Apple iPhone users are younger, richer, and better educated than those who settle for Samsung knockoff phones – August 19, 2013
• iPhone users smarter, richer than Android phone users – August 16, 2011
• Study: Apple iPhone users richer, younger, more productive than other so-called ‘smartphone’ users – June 12, 2009
• More evidence that Mac users are smarter than Windows users – July 16, 2004
• Those who surf the Web using a Mac tend to be better educated and make more money than their PC-using counterparts – July 12, 2002
I’m worried that this race for the bottom is exactly what it sounds like, a zero sum game in which Microsoft and its partners are shooting for big numbers (unit sales) but ultimately end up with little or nothing in the way of actual profits because the only big growth will be in a part of the market where profit is difficult. When PC prices steadily plummet, as they did with the netbook, there’s no rebound. You can’t convince customers to suddenly start spending more on these things… When you look at markets in which the products sell for next to nothing and keep going down, you have to worry for the future on the Microsoft side. You just have to.”
Read more in the full article here.
MacDailyNews Take: When even Paul Thurrott can read the writing on the wall, it’s all over but the shouting.
As we have always said, even as many short-sightedly waved (and continue to wave) the white flag, the war is not over. And, yes, we shall prevail… No company is invincible. Not even Microsoft. – MacDailyNews Take, January 10, 2005
Here’s to an avalanche of sad realizations for Paul. Hoist!
[Thanks to MacDailyNews Reader “Chuck” for the heads up.]
Related articles:
Paul Thurrott comes to a sad realization: ‘Windows 8 is a disaster. Period.’ – February 10, 2014
Milestone: Apple computers outsold Windows PCs in Q4 2013 – February 12, 2014
Chart shows Apple has beaten Microsoft’s Windows monopoly – January 8, 2014
Steve Jobs’ revenge: Latest PC market forecast projects historic 10% downturn – December 3, 2013
Dandy Don Meredith in the fourth quarter, Monday Night Football:
“Turn out the lights, the party’s over…”
By knifing the cash cow known as Windows and giving Office away for free with RT devices, MS is finally acknowledging that Windows + Office + Intel chips will never be their automatic ticket to mobile Nerdvanna.
BIG problem–MS has no other cash cows.
“Nerdvanna”. 😆 We have some great new-to-me words this week!
What some don’t understand is that [very] good quality products that work is normal. There’s no such thing as Apple produces “high end” products, it just happens that all others are very very poor quality or “low end”.
As Mr Cook said “we don’t know how to make a $500 PC that is not a piece of junk”.
Just give him a week. He will recover and find some Apple death issue and be happy again.
Sad but true. Lol
With the demise of Microsoft the livelihoods of the Thurrotts and Dvoraks of the world are in jeopardy. Or maybe they’ll just start leeching off the tit of Samsung instead.
What an interesting concept: A parasite leeching off a parasite leeching off a prime species. How’d you like to be the parasite that has to suck off a parasite to survive? That’s sicker than sick. I wonder if such a thing exists in nature. I’ve never heard of it.
A good example of a parasite having their own parasites is the time when Eric T Schmidt caught crabs.
Apple caught crabs when Eric T Schmidt joined the board
! ! ! 😆
“Enjoyment and productivity from his technology”, something Paul has never experienced.
You know, even in the early 90’s when I made just above minimum wage I saved up to buy a used Performa, rather than settle on a PC. With so many Apple customers buying the latest and newest there is a pretty good after market of quality high end mac, and iOS devices. I think it’s a WAY better deal to get a iPhone 4S cheap, or a 2008 MacBook Pro, then a similarly priced brand new Wintel machine.
I published a weekly newspaper entirely on a Performa in early nineties.
I’m typing this on a unibody 2008 Macbook that I bought as “Refurbished” for about $900. I recently maxed out the memory (8 GB) for an additional $100 or so. It’s running on Mavericks. It does everything I want it to do, and will do so for a few more years. Just this year, next month, Apple will finally vintage this model and no longer support it. So I probably will have gotten something like 8 years of use out of this laptop for about $1000. That’s about $125 per year. Does a $500 Windows laptop last 5 years ($125 per year) with basically no degradation in its function?
Oh, and did I mention that’s 8 years without a virus or other malware, a hardware failure, driver issues, networking issues, or any other response to my requests aside from cheerful compliance.
additionally Zeke you did not have to get soaked to “upgrade” software in order to actually get it to do something useful, and on the mac your not constantly plagued with security issues and protection renewals nor are you on the phone with tech supper trying to write custom ell’s for your particular hardware situation . windows is the equivalent of using the bathroom at the port of authority bus station in new york . wwwwwww!!!!!
oops auto correct changed support to supper sorry !
“Enjoyment and productivity from his technology”, something Paul has never experienced.
Paul is a compulsive bargain hunter. His enjoyment comes from finding a cheaper and albeit harder way to do something. He sees no value to his time, because he needs to buy something to realize enjoyment, not from using something, not from uncovering little hidden gems that make your life easier. He just doesn’t get it. Never will.
I miss my 17 incher. Sometimes bigger is better.
I have the same late ’08 Macbook…what a workhorse. Also upgraded the RAM to 8GB. By far the best upgrade was an OWC Data Doubler. You pull the optical drive (easy with video) and replace it with your hard drive using the data doubler bracket. Then put an SSD in the hard drive bay. I have the OS, applications and documents on the SSD and everything else on a hard drive. For an old computer, it’s amazingly snappy.
‘then a similarly priced brand new Wintel machine.’
Than!
Same for me! At present my income’s rather low, and I’m running a 4 year old Mac mini, an iPhone 3GS, and an iPad 1. With a 2nd hand copy of Adobe Creative Suite 3, I publish minority language books, ebooks, podcasts and other e-media.
It all works fine, touch wood, and I don’t plan on upgrading anytime soon. And, honestly, if someone offered to replace them with the latest Wintel PC, phone and tablet, I would refuse. I’ve never owned any hardware running MS WIndows, having spent many years supporting such crap at work.
At home? No thanks!
A Windows machine is the $300 car that gets 6 miles to the gallon.
Don’t you mean 6 gallons to the mile? Just asking.
“most expensive products in every conceivable category”
Obviously, this guy has never wear a Hugo Boss suit or drive a lexus, one thing is to be expensive and another very different to be VALUABLE.
Driving a Lexus won’t save me money, Apple on the other hand . . .
“The Lumia 520 and its siblings dominate the sales and usage charts.”
Lumia is dominating charts?
“Certainly, there’s a part of my personality that prefers any product that shoots for the masses and not the elite.”
So, he’s trying to paint himself as the People’s tech writer?
I wonder if he drives a Wartburg.
“Certainly, there’s a part of my personality that prefers any product that shoots for the masses and not the elite.”
Hey, Paul, did ya mean “…the huddled masses yearning to be free…”?
Yeah. Get a Mac.
That quote is like trying to make a distinction between hardcover and paperback books in relation to the ability to read. I didn’t understand why he put that out there.
Clearly he’s painting himself as an anti-elitist. That self-serving characterisation doesn’t play quite so well these days, when Apple products are popular with the masses and not just a hipster snob clique, as he could claim years ago.
Aren’t Apple owners known as “Smart Masses”? (Totally stole someones tag line)
Is someone going to come along and simply make Linux into a high end supported OS on their higher end PCs?
Given the continual problems of Windows with legacy code and constant bugs, some manufacturer has got to say enough is enough.
Apple already did it, but they used BSD Unix instead of Linux.
far more secure than linux, it has the best minds focused on security, including the amazing geeks at UC Berkeley, the namesake of the “B” part of the FREE BSD
Bottom line. The most cost effective computer/smartphone/tablet purchase is from Apple. It’s all about TCO. Long term thinkers know this.
Ah Paul Turdott, brings out the plethora of iCals with this guy, he’s badmouthed Apple for years, still takes a swipe a them.
“When you look at markets in which the products sell for next to nothing and keep going down, you have to worry for the future on the Microsoft side. You just have to.”
Sorry Paul, I don’t worry, it’s karma. Had to deal with you and Inyourear crap for years of badmouthing Mac. Just desserts Paul, you’ve made your bed, now it’s becoming a grave. Sleep well.
Great post Road Warrior!
Paul Thurrott lives with his head in the sand. Stop being so cheap Paul – you should also give 2-ply toilet paper a go!
Thanks, I take it you’ve had to endure the drivel that he’s posted over the years. Gosh what arrogance, don’t you just love this:
“Certainly, there’s a part of my personality that prefers any product that shoots for the masses and not the elite. That’s part of my knee-jerk reaction to everything Apple does: They’re so smug and condescending to normal people and their silly, average income levels.”
Apple’s products shoot for excellence, not mediocrity. The masses make up their own mind. If Paul wants to look at smug and condescending people he need look no further than the myriad of IT professionals who convinced so many of the masses to go for a product that required constant maintenance and security updates and were so smug, condescending and arrogant as they touted their mantras of “it’s just a toy” and piled on the FUD ad nauseum.
I’m not worried about the future of Microsoft, not in the least.
I like what I see, like it a lot.
Some see Microsoft’s future with sunny skies, I see it 180 degrees in the opposite direction & 6 feet under.
I see sunny skies for Microsoft, lots of companies flounder under sunny skies.
Makes it more comfortable for the spectators.
Microsoft stupidity on display. Windows 8 forces PC makers to produce more expensive PCs because they need to have a touch screen to be fully functional. And now, Microsoft is trying to encourage their “partners” to produce and sell more low-cost junk PCs that retail for under $250?
An alternative is for Microsoft to allow installation of Windows 7, but Windows 7 is already an OS that is more than four years old. Might as well keep XP going.
“Obviously… Certainly, there’s a part of my personality that prefers any product that shoots for the masses and not the elite”
There’s nothing ‘elite’ about getting a phone for free on contract (eg. iPhone 4S). Look around. Everyone in the Developed world has a Smartphone.
Obviously.
Paul had great fun beating up on Apple circa 1997, so it is sweet, sweet karma to see his meal ticket company on the ropes with a very uncertain future. He’s an asshat who deserves it.
This is the man who generated the term asshat. If the hat fits, wear it.
Not gonna wear it, ain’t my hat, he don’t fit my ass!
nice avatar, by the way…
After all these years of hating Microsoft and hoping and praying that Apple would win the computer war, I now find myself feeling sorry for Microsoft. What’s up with that!
In the 90s, Microsoft needed Apple to allow customers an alternative, albeit an alternative only used by 2-3% of the population. Apple kept the anti-trust forces off Microsoft’s back and Apple kept pushing the technology envelope which forced Microsoft to improve it’s products.
I worry that if Microsoft dies, Apple may become complacent. Apple may rest of its laurels and slow down its innovation. Even a company like Apple needs someone nipping at its heals to keep getting better. Maybe Google will be that mad little Chihuahua forcing Apple to keep improving, but I fear the demise of Microsoft.
I cannot believe I’m saying this stuff. I feel like I’m standing over the grave of the Godfather, wishing he were still alive.
No worries, other competitors like Google will keep Apple on their feet. There will be no shortage of motivation for Apple to continue to be “insanely great.” Still, at this wonderful juncture in changing tech history I sure wish Steve Jobs were here to enjoy it with us.
“After all these years of hating Microsoft and hoping and praying that Apple would win the computer war, I now find myself feeling sorry for Microsoft. What’s up with that!”
Go watch Pirates of Silicon Valley again. It’s alright. We’ll wait.
Microsoft isn’t going anywhere, they just won’t be in the put-others-out-of-business or push-everyone-arown position they use to be in.
I think Apple quit competing with Microsoft when SJ came back. He was really honest about that. SJ took Apple in an entirely different direction.
I think Apple most heated competition is Google and Samsung and I think they know it. It’s a two pronged approach of hardware and software.
I really really wish Apple would partner with Yahoo!. I think they would be a very good business partner and could build a search advertising Juggernaut to compete with Google / Samdung.
I am still a believer that all this was part of Steve Job’s strategy. He knew the countermoves Microsoft would make for every Apple move. And like a chess master was always thinking several moves ahead.
Now MS is stuck with:
1. A mobile OS that noone wants.
2. A PC-OS that is too expensive to be used in cheap PCs.
3. An MS Office product offering no compelling value over the last revision…and
4. A technical pundit that believe their product is a low cost commodity for the masses.
It’s too bad Steve didn’t live to see this.
It must really suck to be this guy.
Hard not to snort whilst agreeing with you
What concerns me is the state of American society when everyone is satiated by the absolute minimum in life.
The elite 1% have done a fantastic marketing campaign over the last 100 years convincing everyone “don’t worry… be happy” and that you need nothing, you shouldn’t want anything, function is all that matters… But buy this crap.
Heck, we have songs about and praise “the simple life”.
There have also been articles and posters on this site lambasting Apple for “form over function”.
I only hope that we finally exit this age of ugly gray square boxes. (Mac Pro is awesome.. And the entire Apple portfolio of products)
Agree with MDN, Apple buyers are not “normal”, thank God.
When Msft ran their famous “Lauren buys cheap crap” ads — thus further helping to destroy PC price points — I was shaking my head.
You remember? where ‘Laptop Hunter ‘ Lauren and her pals were out looking for the cheapest deals: “all this for under xx dollars in a PC” vs Apple.
Like training Donkeys not to spend more.
as an ex Ad pro i was laughing and posting “it’s stupid” in comments section of clueless tech writers who were lauding the “Lauren” campaign as the greatest attack on Apple….
—
Now today if only Apple would run a few Mac ads and cash in on consumers hatred for Win 8 turd I would be fully happy….
I asked the salesman at Staples why a really nice looking HP laptop was so inexpensive: how could HP make money on that, I asked. He said that the computer comes loaded with software (bloatware) that requires the consumer to buy if they want to use it, and HP gets a financial contribution from the software bloats. So the low retail price is not really the cost of the computer, compared to Apple, where the software is all in as are the updates thereto, including the operating system, which has been made free of charge on the Apple Store.
u get wut u pay 4, in the case of Mikkkrosloth, you pay and pay and pay….. and still what u get is crap!
What kind of low level editorial is this where a writer is throwing personal attacks on another one? Shows how desperate the writer is to settle the score.
Apple may be doing good but their market lead is not as good as it was in Steve’s era. So enjoy while it lasts as things will be changing soon. 🙂
And what changes will those be? Anything to the benefit of the customer? Not from your school of thought. You’re welcome to it.
Or are you trying to be sarcastic?
“When PC prices steadily plummet, as they did with the netbook, there’s no rebound. You can’t convince customers to suddenly start spending more on these things…”
I wish someone on Wall Street was bright enough to understand that this is why Apple will never offer a cheap product, and nobody should want them too if they are expected to increase earnings and profit margins
HAHA. I almost fell out of my chair after the first MDN take.
This ‘Apple-crazed population’ member ONLY buys quality at sane prices.
Not once has any Windows PC been found to be less expensive than a comparable Apple Mac when ALL costs are considered, not just the shelf price. The other factors: ROI (return on investment) and TCO (Total Cost of Ownership).
If you want cheap up front, expensive after you open the box, PLEASE go buy a Windows PC. You deserve it. I don’t. I deserve the best computer gear I can get my hands on. Apparently, that means I’m ‘Apple-crazed’.
And yes Paul Thurrott: You’re a dickhead. Thanks for the back-handed complements to Apple. Thanks for being a mean old curmudgeon, reluctant and bitter about letting go of low brow technology. Only you could comprehend your own point of view.
Was wholeheartedly agreeing until I came to read the horribly racist take by MacDailyNews that people in the third world don’t have the brains to buy an iPhone.
Just because so many call Apple fanboys elitist jerks doesn’t give you the right to become that…