Microsoft's new TV ad whacks Apple over prices

It 'picked Apple's weakest point,' says analyst

Microsoft Corp. last night took a direct shot at its rival, Apple Inc., in a new television ad that pitched Windows PCs as lower-priced than Macs.

The ad, the first in a new campaign dubbed "Laptop Hunters," was created by Microsoft's ad agency, Crispin Porter + Bogusky. It follows a woman identified only as Lauren as she shops for a laptop. Lauren, who wants a notebook with "speed, a comfortable keyboard and a 17-inch screen" for under $1,000, is given the money and told that she can keep whatever she doesn't spend on the laptop.

After a quick trip to a Los Angeles Apple retail store, Lauren walks out, disappointed because the only system for under $1,000 sported just a 13-in. screen. Apple's only MacBook for less than $1,000 is the white-case MacBook, a holdover from the previous generation, which was largely superseded by the new unibody notebooks introduced in October 2008.

"I would have to double my budget, which isn't feasible," Lauren later says as she drives to a Best Buy to look at Windows laptops. "I'm just not cool enough to be a Mac person."

"This is effective advertisement, and I haven't seen many effective advertisements from Microsoft," said Ezra Gottheil, an analyst at Technology Business Inc. who covers Apple.

Crispin Porter + Bogusky, which also created the unusual ads -- described by some as "baffling" -- starring comedian Jerry Seinfeld and former CEO Bill Gates, recruited Lauren and another prospective computer shopper who will be featured in coming ads, through Craigslist.

At the Best Buy, Lauren browses the notebook aisles and finally settles on a Hewlett-Packard Co. system, a Pavilion DV7-1245DX, for $699.

"This one has all my qualifications. I'm gonna buy this one," Lauren says as she points to the Pavilion. At the checkout, she crows: "I got everything for under $1,000!"

The ad debuted Thursday night on CBS during the network's broadcast of the NCAA basketball tournament, but clips can be found on the Internet, including YouTube.

"People are looking at price," said Stephen Baker, a retail analyst at The NPD Group Inc., when asked what he thought of the new ad. "Consumers today, unlike a year ago perhaps, don't care about value if value comes at an additional cost. And this ad highlights Microsoft's competitive advantage today. They highlighted the value proposition of Windows versus Mac."

But Baker cautioned against equating value and price. "The woman's wasn't looking at the different value propositions, she was looking at the price," he said. "Some people are confusing the two."

"I think it's very effective, but not necessarily fair," added Gottheil. "If you demand a 17-inch screen and only have $1,000, you're absolutely going to end up with a Windows machine."

Gottheil pointed out that in years past, such a pitch would not have meant much, because the entry-level price gap between Windows PCs and Macs was much smaller than it is now. "The entry point has separated over the years," he noted.

Apple, however, stresses value -- and, in a way, deferred value -- when it touts its systems at the prices it charges, Gottheil added. "The 'It just works' kind of idea is a perfect example," he said. "Apple's saying that over the long haul, you'll spend less time hassling with a Mac. But with the economy like it is, price has to be part of the equation.

"For sure, Apple has erected a number of barriers at the lowest prices," Gottheil continued. "Microsoft's picked Apple's weakest point to attack."

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Microsoft's latest TV ad takes Apple to task over the prices of its computers.

Copyright © 2009 IDG Communications, Inc.

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