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Microsoft's 'Apple tax' claims are 'stupid,' counters analyst

Macs 'far less taxing' to use day in, day out, argues analyst who covers Apple

April 10, 2009 12:00 PM ET

Computerworld - Microsoft Corp.'s claim that customers pay a $3,400 "Apple tax" when they buy Macs rather than Windows-based PCs is "silly" and "stupid," an analyst who follows Apple Inc. said today.

"You can make a reasonable case that Apple PCs are somewhat more expensive in a hardware-for-hardware comparison," said Ezra Gottheil, an analyst at Technology Business Research Inc. "But the comparisons Microsoft makes were just silly."

In a repeat from a late 2008 public relations campaign, Microsoft yesterday said that Macs cost more than PCs, again dubbing the difference an "Apple tax." In a post to a company blog, Microsoft spokesman Brandon LeBlanc talked up the idea of a "'hidden tax' of owning a Mac."

Citing a Microsoft-sponsored paper written by analyst Roger Kay of Endpoint Technologies Associates Inc., LeBlanc claimed that over a five-year span, a family of four -- who currently run a pair of Windows XP-equipped machine -- would pay an additional $3,367 if they switched to Macs rather than continue to buy within the Windows PC ecosystem.

LeBlanc also argued that buyers get a better value when they choose PCs. "It is human nature to focus on the upfront price," he said, and referred to the Apple-bashing television ads that Microsoft has been running. "The harder thing to capture is the overall cost and the value. Cost is getting something cheaper. Value is a function of getting more of what you want, regardless of what you spend. And you're a lot more likely to find that with a Windows PC."

Gottheil strongly disagreed with Microsoft's conclusion. "Why do they think this is an effective comparison?" Gottheil asked. "They add MobileMe to the Mac, but that's a pure added-value service, and not necessary for the Apple experience in any way. Nor do they mention that there are plenty of free alternatives for the Mac [to MobileMe], just as there are for Windows." Kay's PC-to-Mac comparison listed an annual Family Pack subscription to Apple's sync and storage service; at $149 per year, the five-year total added $745 to the Macs' total cost, or about 22% of the "tax."

"And taking a Mac Pro as the desktop? That is just stupid. It's not a reasonable kind of comparison with what consumers buy," Gottheil said.

Kay used the most expensive Apple desktop system, the Mac Pro -- which starts at $2,499 and is targeted at professionals, such as video editors and graphics artists -- rather than the lower-priced iMac in his comparison. Kay's paper didn't explain why the Mac Pro was selected, although he did note that the $1,199 iMac, a 20-in. model that now sports 2GB of memory and a 320GB hard drive, was a choice in what he called "midrange" desktops.



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