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JUNE 19, 2002 BYTE OF THE APPLE By Charles Haddad Converting the PC Sinners Apple knows its best hope for growth is to win over Windows users, and its new ad campaign is aimed right at 'em
Yes, Apple's new ad campaign has all the trappings of an old-time, bible-thumping revival. It would bring a knowing smile to the sly lips of Elmer Gantry, the revivalist huckster in Sinclair Lewis' classic novel of the same name. And like Gantry, Apple has trotted out the most embarrassing of sinners. These aren't your usual cast of Mac converts: spiky-haired artists and tweedy professors. No, this list includes a young Windows network administrator who confesses: "I deal with Windows all day. When I tire of that, I come home to a Macintosh." Talk about thumbing your nose at the devil. AN UNHOLY ALLIANCE. The devil here, of course, is Bill Gates and his Windows operating system. But I doubt Gates is losing any sleep over these ads. If anything, the campaign is as much a testament to the hegemony of Windows as revivalism is to the enduring allure of the devil. Besides, Gates also wins if the Mac platform grows. Lets face it: At best, Apple is going to steal away only a smidgen of market share from Windows. And the first purchase of any new Mac user is likely to be the Mac version of Office. As Apple CEO Steve Jobs puts it so aptly: "What's a few percentage points in market share among friends?" Certainly not enough to disrupt the unholy alliance between Apple and Microsoft, in which Microsoft needs Apple's presence to affirm that it's not a monopolist, and Apple needs the Microsoft version of Office to affirm that the Mac is a serious computer. BEYOND ACCOLADES. While good fun, this so-called switcher ad campaign is no laughing matter to Apple. It sorely needs to convert more PC users. Since its near-death experience in the mid-1990s, Apple has been unable to regain its previously long-held 5% market share. A continual parade of innovative products in the past two years has won the company accolades but failed to boost its share out of the 3% range. Indeed, on June 18 Apple announced that its earnings for the quarter ending in June wouldn't meet its earlier estimates. This disappointing news comes after Apple managed to increase its U.S. market share during the first quarter to 3.7%, from 3.4% a year earlier, according to industry consultant IDC. That was no accident: In the past year, Apple has been targeting PC users like never before. The campaign began with the rollout of Apple's own retail stores, placed in the path of wealthy young shoppers in big cities. Apple now has 30 stores, and they're starting to tempt PC sinners. Half of all new computer sales are to people new to the Mac, says Jobs. Most of those sales are to PC converts, who are either adding a Mac as a second home computer or jumping platforms altogether. WELCOMING THE BORED. Converting PC users is the key to gaining market share because there just aren't that many remaining newbies. Nearly every household that wants a computer has one these days. The PC market is mature, with growth having plateaued. This stagnant market, ironically, represents opportunity for Apple. Bored or unhappy with Windows, PC users might turn to the Mac in search of something new and exciting. That's the strategic thinking driving Apple's switcher campaign. The new ads represent the second thrust of the campaign. They're designed as the carrot to lure PC users into the stores. Then, the real sell begins. Airy and inviting, the outlets are digital playgrounds of working iBooks, cameras, flat-screen monitors, and iPods. Not even the most ardent PC geek can resist fiddling around. Apple understands that the only difference between men and boys (and women and girls) is the price of their toys. IBooks, cameras, and iPods lure unsuspecting nonbelievers into the tent. Apple makes this offer to keep them there: It will transfer all of any convert's PC files to a Mac without charge -- an offer that could tempt even the most hardened PC sinner.  Haddad, Atlanta-based correspondent for BusinessWeek, is a long-time Apple Computer buff. Follow his weekly Byte of the Apple column, only on BusinessWeek Online Edited by B. Kite Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | JUNE |
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