Another "Laptop Hunter" Ad From Microsoft

Posted by: Peter Burrows on April 09, 2009

Microsoft just posted the third of its “Laptop Hunter” ads, in which the cameras follow consumers as they shop for a free laptop. Here it is:

<br/><a href="http://video.msn.com/video.aspx?vid=20e31edd-189b-4057-ba74-e936a90ef0a2" target="_new" title="Laptop Hunters $1500 – Lisa and Jackson get a Sony VAIO">Video: Laptop Hunters $1500 – Lisa and Jackson get a Sony VAIO</a>

Clearly, after years of taking a total beating on the advertising front from Apple, Microsoft has hit on a winning campaign. First, Lauren uttered the now-famous line—“I’m not cool enough to be a Mac person”—giving price-conscious shoppers permission to buy a plain old PC and retain their pride. Giampaulo maintained the theme. Fab Euro-nerds like him usually use Macs, but he came off as more pragmatic and less self-consumed. And the Jackson’s also seem like they could well be Mac people. My point: while Microsoft could have done anti-Apple ads that celebrate PC buyers at the expense of Apple owners, it didn’t take this easy, populist path. Rather, it’s making its best case in years that while Macs are cool, a PC is a perfectly viable—and smart—choice.

No doubt, this is still marketing. There’s no mention of Vista anywhere in these ads, and there’s plenty of people (including Arik) who suggest Lauren, Gianpaulo and the Jackson’s won’t be happy once they start using their chosen PCs.

Still, you’ve got to give Microsoft credit. This is actually Phase III of a three-year campaign to re-introduce consumers to Windows, says Windows product marketing chief Brad Brooks. They came up with the “story line” a year ago, when Vista awfulness was still a main tech story and Windows 7 was more than a year off.

The plan was to start with an ice-breaker, meant to humanize Microsoft and get consumers curious in the company once again. Those were the Jerry Seinfeld ads. Then came "I'm a PC" ads, designed to show the vast diversity of PC users, and "Rookie" ads in which cute kids showed off features of Vista that most people don't even know exist.

This round of ads is designed to show off the breadth of the Windows ecosystem, and emphasize the greater variety of choices available. "There is an 'i-Way', and there’s 'your way'," says Brooks. "That’s a big part of our story." As the campaign continues, Microsoft will try to emphasize that low price isn't the only advantage. In one spot, the volunteer will be get a price limit of $2000.

There will be six ads in all, which should remain on the air for around three months. All of them were shot in the LA area in mid-January. Current events helped inform the spots. With the economy tanking, Microsoft decided to play the price card more strongly. “Obviously, the emphasis on price gets stepped up in an economy like this one," says David Webster, Microsoft's GM of brand marketing. He adds that it was a good day when Apple failed to introduce a cheaper laptop at MacWorld, but instead came out with a top-of-the-line MacBook Pro with a hefty $2,700 sticker price. That's the one that Lauren briefly considered. “The fact that it’s one quarter of the price [of the PC she chose] doesn't hurt.”

[By the way, he says Apple's snarky "I'm a Mac" ads that centered on Microsoft's big ad campaign was a mistake. “That was not a particularly good move for them--which is why they didn’t run those ads very long," offers Webster. "Their ads work better when they are about their products. They're less effective when they are about our ads. That may work with the fanboys, but it could turn other people off." Indeed, rather than make believe shoppers hadn't been watching John Hodgeman make fun of it for years, Microsoft decided to try to use those "I'm a Mac" ads to its advantage. "Apple has spent $400 million or so over the past two years, in an effort to cement people’s ideas about PCs and Macs. We felt we could run with that."]

Why do the Laptop Hunter ads work so well? For me, they feel genuine--precisely the quality so many Microsoft ads lack, and so many Apple ads have. But I wanted to see how deep that genuineness ran. I asked Webster about the controversy that flared when it became known that Lauren was a part-time actress--the idea being that she'd been hired and scripted. Webster insists it's not so. He says she didn't know Microsoft was behind the giveaway, and that Microsoft didn't know she was a part-time actress until after the fact.

I also asked Webster whether any of these volunteers (they were approached by what they thought was a market research firm) ended up actually picking a Mac. “Nope--and we did take that risk,” he says. “We asked them what budget they had. And we picked budgets where they could have bought a Mac.”

Lastly, I asked whether the shoppers were geniunely free to choose any machine--or whether Microsoft was determined to have them choose models from particular PC makers. He insists that wasn't the case. "If we steered the consumer towards a particular manufacturer, it would cut against the idea of people going on an authentic journey," says Webster. While hurt feelings may emerge in future, at this point he says the OEMs are all thrilled at just having Microsoft do something to spur demand--a nice change from the Vista debacle, no doubt.

There will be three more phases of the campaign after the Laptop Hunters spots. While Microsoft give details, there will surely be ones that highlight Windows 7, and some that focus on how PCs work with other Microsoft products such as cell-phones, game consoles and TVs.

And Webster says the company will move faster and be more ready to change course than it has been in the past. "One of the lessons we learned is that going dark [and having extended periods with no ads] is tricky. This is a muscle you have to use to develop." In many ways, the change is akin to Microsoft's effort to focus less on introducing massive OS releases every few years, and more on Web-style development processes in which its code is continually updated. "You can't wait months to see if something is working." Instead, he says the company is using technology that checks the blogosphere to pick up "tone sentiment." So far, so good, he insists. He says tone sentiment has risen from 50% positive to 70% positive since the campaign began.

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Reader Comments

PXLated

April 10, 2009 12:39 AM

Wonder if they'll follow up in 3-6 months to see if those machines are still operable or report how much was spent keeping them operable :-)
And now we wait for the next Apple campaign.

pk de cville

April 10, 2009 09:44 AM

Hah!

"Why do the Laptop Hunter ads work so well? For me, they feel genuine--precisely the quality so many Microsoft ads lack, and so many Apple ads have. But I wanted to see how deep that genuineness ran. I asked Webster about the controversy that flared when it became known that Lauren was a part-time actress--the idea being that she'd been hired and scripted. Webster insists it's not so. He says she didn't know Microsoft was behind the giveaway, and that Microsoft didn't know she was a part-time actress until after the fact."

Explain this:

http://www.youtube.com/watch?v=cc5PBzb1dJc&feature=player_embedded

Jay

April 10, 2009 02:31 PM

This does not make me want to buy a "PC" - meaning something with Windows already on it. I need (any) company to sell me themselves not tell me how their competitor sucks.

Rg-Easton

April 10, 2009 02:39 PM

These ads show two people shopping by themselves for a computer-no help in the stores.

Apple should respond with a film showing the crowds in Apple store with people standing right by the prospects helping them with their purchases.


Also, with something showing comparative experiences seeking direct support, including the $35 charge MS eventually puts on you for questions.

joe dauz

April 10, 2009 02:45 PM

Sure even i would take a free pc .. then when i get home ill put Linux on it.

Mieke de Su

April 10, 2009 02:46 PM

What's your evidence that these ads "work well"? It seems like this is just your feeling.

Jay

April 10, 2009 02:47 PM

Sony Vaios are very nice.
Again, same argument as the last few commercials: Not showing the OS, instead selling PCs.

Guess what? Selling PCs = Selling Windows. They're generally attacking Apple price, which a consumer would see for himself /anyway/ if he was comparing computers. The entire ad campaign seems to be a little useless, but at least it gets the Windows brand out there and is trying to break some stereotypes Mac ads laid down (geeky PC user, Pie charts, etc.).

Chuck Darwin

April 10, 2009 02:59 PM

It's a good ad campaign, but people who choose Macs already understand that other PC's have a "Windows Discount." They have to discount Windows machines to get people to buy them, since the most important thing, the OS, is so inferior.

Johnathan I

April 10, 2009 03:02 PM

I would rather pay money for a mac than waiting for months to get a pc fixed.

Harvey Dent

April 10, 2009 03:07 PM

I have a PC and never had problem...better yet i can play all the video games i want...unlike mac..

lappa

April 10, 2009 03:08 PM

MAC FANBOYS ARE SCARED

sumitk

April 10, 2009 03:08 PM

what they do now I don't believe PC
I am a PC user from ever but it is not good at all. Mac charges money for a purpose because they are awesome :)
I am shifting to Mac now because PC kills my time solving its problems and vista is poorest operating system in history of computers.

Please never buy a PC .... from a 10 year PC user ... not just a user a power user who programs for windows as well :(

Jabberwolf

April 10, 2009 03:20 PM

Nice.
Blue ray,
SLI/crossfire,
Can play more games,
Can run autodesk and CS4 in 64 bit mode on Vista64,
Cheaper.

MS doesnt even have to mention their name only mention CHOICE. That is something that apple lacks.. as well as some above stated ability!

This is why MS is 90% of the market and the point of this ad - CHOICE!

sam

April 10, 2009 03:25 PM

if i was asked to choose between buying the mac i wanted or a new PC for free i suppose my decision would be biased towards free computer.

Kokuryu Tenchi

April 10, 2009 03:29 PM

I agree that the new ads works. It is not focusing on the actual OS, it shows people shopping for laptops - not desktops, and it emphasizes the ONE complaint everyone has about the MACs - the prices for them. In every ad, people go over to the MACs, they are attracted to them, but they cannot afford them. The MACs are really their number one choice, but price makes them run away. Then they go to the PC side and make a choice. The ads are a two-edged sword for Microsoft. BUT the ads are not attacking Apple directly, and reflect what many people feel - the general frustration of being unable to afford an Apple product, and having to settle for a Windows product. This bodes well for BOTH companies. And Microsoft will reap many rewards from this more positive type of ad campaign than from anything else they have done in a long time.

(This comment was written on my MacBook Pro - it took me a LONG time to get a new MAC - the last time I got one was when the MAC first came out - thats how bad I think Apple's prices are)

rayf

April 10, 2009 03:37 PM

Apple has got to get real, and come out with a nice laptop, with a large enough screen, at a budget price. My wife wanted a Mac, but when she saw the prices, she purchased an HP. When Apple quits being so aloof and standoffish, like they're some kind of special company, I'll start liking Apple.

sm

April 10, 2009 03:37 PM

Poor MAC lovers, just can't take criticism, perhaps feeling a little used at spending all that money for such a controlled product. I have 2 pc's running XP and 1 laptop running Vista, with thousands of software and hardware choices for changes or upgrades - wouldn't have it any other way.

CrashPad

April 10, 2009 03:52 PM

Whats to explain? It is afterall a commercial. Entrance shot exit shot. Different lighting reflects time change. You apple fanbois sure get testy when the religion is questioned. Good luck.

juggerNOT

April 10, 2009 03:55 PM

"While hurt feelings may emerge in future, at this point he says the OEMs are all thrilled at just having Microsoft do something to spur demand--a nice change from the Vista debacle, no doubt.."

Micrsoft is just trying to retain their clients, the PC manufacturers", by participating in the marketing of laptops that run their OS. They don't care about the consumers feelings, as long as they can move those antiquated laptops seating on the shelves. I think I get it now.

It's all about the Benjamin's.

ester

April 10, 2009 04:01 PM

you mactards have too much free time.

killa

April 10, 2009 04:07 PM

Well Corp. america runs on windows so sorry for all tha mac users... dont get me wrong ... macs are nice but for your networking and compatibility issues with coprorate software your little macbook is a toy .... may have good video and processing power but anyone who knows anything about corporate networking knows this is a pc world and will be

Dale DeWitt

April 10, 2009 04:11 PM

"assive OS releases every few years, and more on Web-style development processes in which its code is continually updated. "You can't wait months to see"
Kinda sorta like FLOSS without the vulture effect. Only so much you can do with a price up front approach though.

brady

April 10, 2009 04:17 PM

These ads are great!

After buying the laptop they should continue filming the users spending that savings at Ross 'dress for less' and then finally at home enjoying a can of generic beer while they try and uninstall Vista or 7.

Meh.

April 10, 2009 04:24 PM

Walk into a Mercedes dealership and ask for a sub $10,000 car.

These ads reinforce the Apple message of an exclusive and cool brand.

Now ask how much margin your average windows PC maker gets, then ask how much Apple makes on their high quality products.

Why would Apple want to race Microsoft to the bottom? A free OS on a netbook is at the bottom with no room for the Windows tax.

asianThinking

April 10, 2009 04:37 PM

"Well Corp. america runs on windows so sorry for all tha mac users...but anyone who knows anything about corporate networking knows this is a pc world and will be"

Thanks for the words of wisdom. I feel more confident that once you compromise one Windows PC, you pretty much have access to them all.

rayf

April 10, 2009 04:42 PM

One more thing - bought a ipod, and also an iphone. They came with a wire so you can charge it ... but to do so you need a PC or a MAC to plug them into.

Want to charge it from a standard power outlet? You have to purchase a charge kit for $30.

Why screw over your customers?

juggerNot

April 10, 2009 04:59 PM

Yes, the US runs on Microsoft. That is why we're so vulnerable when cyber-attacks occur. If you can compromise one, you can compromise them all.

This does not mean that other OS's are not prone, it's just Windows is in greater population...more visibility when attacks do occur.

Brie

April 10, 2009 05:47 PM

I absolutely LOVE Microsoft's "Laptop Hunters" ads.

I feel that they're incredibly tasteful in handling the whole Mac vs. PC thing. I happen to think that they're spot-on with everything.

All in all, very tasteful, effective, smart, and accurate.

I love them.

DotNetRock

April 10, 2009 08:07 PM

Years and Years of "I'm a Mac" ad by Apple and no strong reaction from the PC users. 3 little Microsoft ad and look at Mac fanboy crying and moaning. LOL. what a bunch tards. Play right into Microsoft hand. MSFT just put Apple fanboy on defend end and look at the reaction.

blinkdt

April 10, 2009 09:11 PM

I can hardly wait to see the Apple numbers begin to FALL when Windows 7 arrives. Yes, fanbois, your share is going to drop . . . I can hear your shrill protestations already, and I delight in your anguish. Die, you gravy-suckin' pig-dogs!

Warren

April 10, 2009 10:43 PM

these commercials do not entice me to run out and get a pc. i used to use them but ever since my macbook pro there is no going back. i wouldnt care how much more expensive they are, the quality is indefinitely better

Keith

April 11, 2009 12:05 AM

I'm waiting to see an ad where the prospective buyer jumps up and down excitedly and yells, "Oh, LOOK!!! It has WINDOWS!!!!! Yippee!!!"

Mikiev

April 11, 2009 01:08 AM

Interesting that those people in the ads all think they would prefer a Mac, until they discover how much one costs.

Why do they all want to buy a Mac, as their initial/first choice?

What's the next ad? People going to buy an iPhone, and after discovering how much it costs... they buy a cheaper Windows Mobile-based phone?

Zubair Rehman

April 11, 2009 02:46 AM

Anybody seen that how much time this Laptop was taking while loading Vista. I think that this Laptop is just a shiny piece of Junk.

SkateNY

April 11, 2009 03:44 AM

Read it and weep. Or reap.
I don’t care about how much you love your ugly, unmanageable and clunky Zune.
I don’t care about the lies you write about how the Windows OS is bug- and virus- free. I’ve been in this business for some time now, so I used to it, and I’ve tired of you and people like you.
I don’t care that you’ve been brainwashed to believe that the total cost of ownership between an Apple machine and a Microsoft robot saves you so much money. Like it or not, it doesn’t work that way. Facts are facts. If you don’t like the taste of the medicine, that’s your problem, not mine.

I don’t care that you ignore the fact that Microsoft’s management is, at best, in disarray and, at worst, inconceivably incompetent.

I don’t care about your ludicrous belief that Macs don’t suffer from bugs, germs, worms, trojan horses or trojan condems just because there are fewer Macs around than there are Windows robots.
You can be as stupid as you want to be, and you can be in as much denial as you want to be. That’s none of my business.

I also don’t care that you believe that having a moron as your CEO is the best way to go. Great job on the Seinfeld ad campaign, and on the “I’m a PC” campaign. More money well lost. “We’ve got millions to spend, why not just throw it away? Who cares about stock-holders?” Oh-by-the-way…The “I’m a PC” campaign did wonders for both the company and the investors. (Great trading price for the past five years or so, by the way. Sorry you lost your house because of Microsoft. Even sorrier that you could have retired early in Costa Rica had you had any faith in a company that delivers what it promises. Your stupidity and stubbornness is not my problem.)

If I’m attempting to make any point at all, then it’s this: The stupidity and abject stubbornness of Microsoft investors and consumers has only served to place Microsoft in untenable the position in which they now find themselves. They, and you, are left with nothing else but to attack competitors in ways that only make them look foolish and weak. They and you did it to yourselves.

As an Apple user and investor, all I can say is, “Thank you very much. I no longer need to work for a living at a relatively young age, my children will be well taken care of, and I can live the rest of my years knowing that I chose the right side of the ledger.”

Here we go:

This 33-year-old company dominates the consumer market spaces it competes in… has no debt… and is sitting on a cash pile of over $25 billion. In the face of the current recession it continues to do well - unlike many of its competitors.

Back in 1982, you could have purchased 100 shares of this company’s stock for $160. Those same 100 shares would be worth roughly $92,000 dollars at today’s split-adjusted share prices.

That’s a 57,400% return, something most people won’t ever see in a lifetime of investing.

Fortunately for us, this company’s prospects are only looking brighter. In fact, it has plenty of space to grow and do it all over again. And it won’t matter whether you’ve been there from the beginning or jumping into the bandwagon today - the ride looks to be profitable nonetheless.

Let me show you a few reasons why this stock belongs in everyone’s portfolio…

Ignoring Competitors and Analysts

Today, its bewildered competitors plod along, introducing ho-hum, cheap, “me-too” products in a vain attempt to undercut its expensive prices and its ever-increasing market share.

Most of these attempts are pitifully ineffective. Regardless, this company just ignores them. Always executing from a tower of strength, it defines and controls the markets it operates in, rewriting the rules for the other players.

In addition, it creates new markets where none existed before… paradigm-shifting consumers’ lives and thought processes.

The company’s uniquely distinctive advertising and its incredibly thoughtful, aesthetic product designs give it a unique position in the consumer electronics industry. One that it’s not likely to give up anytime soon, if ever.

Numerous analysts have predicted the company’s demise over the years, saying its products are too expensive and won’t sell well in recessionary environments, that it’s a “one man show.”

The company’s response? It ignores the analysts, too. Because they just don’t get it.

You see, it has something that most analysts don’t possess and never seem to be able to put a proper value on:
· Long-term creative vision
· The will and confidence to ignore all the pundits and nay-sayers
· A first-class management team to drive the execution of its secretive plans

Apple: The Foremost Consumer Electronics Leader

If you haven’t already guessed, I’m talking about Apple, Inc. (Nasdaq: AAPL), the foremost consumer electronics company in the world. And its stock belongs in everyone’s portfolio.

Granted, I’m a little biased. I’ve owned its products since the 1980s and just can’t imagine living without them.

Its customer base is made up of students, educators, businesses, government agencies and consumers of every sort. The company’s business strategy centers on its ability to design and develop not only its products, but the software operating systems they run on.

Its Mac computers are first class, easy to use and run all the popular software found on Windows machines. And they run those programs better and without all the viruses, spyware, malware and hacker attacks that constantly plague Windows users.

I’ve converted several long-time Windows users to Macs, and once they saw how easy they were to use - and how few problems they had. Afterwards, they wondered why they hadn’t switched over long before.

The company single-handedly redefined the entire music business with its iPod and its iTunes music store. And it did it in a relatively short span of four to five years, generating billions in annual revenues in the process. Its share of the mp3-player market remains well above 75%.

Now it’s doing it again with the iPhone, the slickest smartphone on the market. Sales of the device grew 245% in 2008, according to a Gartner research report. That compares to 96% for Research in Motion and a paltry 0.8% for Nokia.

While the iPhone is number three in terms of overall marketshare (8.2%), it’s clearly growing the fastest, and could easily overtake Nokia and RIM in a couple of years.

In the simplest of terms, Apple has figured out how to create products that most people would design if they could give their two cents to the Apple product development teams. They’re simple and easy to use, just like everyone wants them to be.

Apple’s Cash Cow Just Keeps Getting Bigger…

Apple’s second-quarter financials will be released April 22, in what is always a highly anticipated conference call. The company constantly downplays future expectations when talking to analysts, and then routinely beats them by a wide margin.

This quarter’s results will be particularly interesting, as it will give investors a better idea as to the effect the recession is having on the company. So far, Apple has appeared to be somewhat resistant to its effects, helped in no small way by a constant stream of new product innovations and introductions.

However, one of the major sources of future revenue is constantly overlooked by analysts. Whenever the company sells an iPhone, it only books about 10% of the money it receives as revenue, and defers the rest.

It then books this annually over a period of 10 years. This is a constantly increasing future revenue stream that’s like cash in the bank. Great for when times get a little tough.

And then there’s the “Apple effect.” This is logic that goes along the lines of: “If Apple’s (iPhone or iPod) is this good, its computers must be great, too.”

That phenomenon has analysts betting the company will sell 2 to 2.2 million Mac computers for the January-March time period. The company has plenty of room to grow here, too, as it currently has under 10% of the overall PC market.

Given how well the company has been performing so far during this recession, it appears that shares are still cheap. Investors interested in owning a few shares might want to wait until after this quarter’s results are announced on April 22, as there is generally a pullback in the stock after earnings results.

Apple is certainly on top of its game, and I believe it will continue to stay there as long as it continues to make the rules that all its competitors have to follow.

Good investing,

David Fessler
www.investmentu.com

SkateNY

April 11, 2009 03:44 AM

Read it and weep. Or reap.
I don’t care about how much you love your ugly, unmanageable and clunky Zune.
I don’t care about the lies you write about how the Windows OS is bug- and virus- free. I’ve been in this business for some time now, so I used to it, and I’ve tired of you and people like you.
I don’t care that you’ve been brainwashed to believe that the total cost of ownership between an Apple machine and a Microsoft robot saves you so much money. Like it or not, it doesn’t work that way. Facts are facts. If you don’t like the taste of the medicine, that’s your problem, not mine.

I don’t care that you ignore the fact that Microsoft’s management is, at best, in disarray and, at worst, inconceivably incompetent.

I don’t care about your ludicrous belief that Macs don’t suffer from bugs, germs, worms, trojan horses or trojan condems just because there are fewer Macs around than there are Windows robots.
You can be as stupid as you want to be, and you can be in as much denial as you want to be. That’s none of my business.

I also don’t care that you believe that having a moron as your CEO is the best way to go. Great job on the Seinfeld ad campaign, and on the “I’m a PC” campaign. More money well lost. “We’ve got millions to spend, why not just throw it away? Who cares about stock-holders?” Oh-by-the-way…The “I’m a PC” campaign did wonders for both the company and the investors. (Great trading price for the past five years or so, by the way. Sorry you lost your house because of Microsoft. Even sorrier that you could have retired early in Costa Rica had you had any faith in a company that delivers what it promises. Your stupidity and stubbornness is not my problem.)

If I’m attempting to make any point at all, then it’s this: The stupidity and abject stubbornness of Microsoft investors and consumers has only served to place Microsoft in untenable the position in which they now find themselves. They, and you, are left with nothing else but to attack competitors in ways that only make them look foolish and weak. They and you did it to yourselves.

As an Apple user and investor, all I can say is, “Thank you very much. I no longer need to work for a living at a relatively young age, my children will be well taken care of, and I can live the rest of my years knowing that I chose the right side of the ledger.”

Here we go:

This 33-year-old company dominates the consumer market spaces it competes in… has no debt… and is sitting on a cash pile of over $25 billion. In the face of the current recession it continues to do well - unlike many of its competitors.

Back in 1982, you could have purchased 100 shares of this company’s stock for $160. Those same 100 shares would be worth roughly $92,000 dollars at today’s split-adjusted share prices.

That’s a 57,400% return, something most people won’t ever see in a lifetime of investing.

Fortunately for us, this company’s prospects are only looking brighter. In fact, it has plenty of space to grow and do it all over again. And it won’t matter whether you’ve been there from the beginning or jumping into the bandwagon today - the ride looks to be profitable nonetheless.

Let me show you a few reasons why this stock belongs in everyone’s portfolio…

Ignoring Competitors and Analysts

Today, its bewildered competitors plod along, introducing ho-hum, cheap, “me-too” products in a vain attempt to undercut its expensive prices and its ever-increasing market share.

Most of these attempts are pitifully ineffective. Regardless, this company just ignores them. Always executing from a tower of strength, it defines and controls the markets it operates in, rewriting the rules for the other players.

In addition, it creates new markets where none existed before… paradigm-shifting consumers’ lives and thought processes.

The company’s uniquely distinctive advertising and its incredibly thoughtful, aesthetic product designs give it a unique position in the consumer electronics industry. One that it’s not likely to give up anytime soon, if ever.

Numerous analysts have predicted the company’s demise over the years, saying its products are too expensive and won’t sell well in recessionary environments, that it’s a “one man show.”

The company’s response? It ignores the analysts, too. Because they just don’t get it.

You see, it has something that most analysts don’t possess and never seem to be able to put a proper value on:
· Long-term creative vision
· The will and confidence to ignore all the pundits and nay-sayers
· A first-class management team to drive the execution of its secretive plans

Apple: The Foremost Consumer Electronics Leader

If you haven’t already guessed, I’m talking about Apple, Inc. (Nasdaq: AAPL), the foremost consumer electronics company in the world. And its stock belongs in everyone’s portfolio.

Granted, I’m a little biased. I’ve owned its products since the 1980s and just can’t imagine living without them.

Its customer base is made up of students, educators, businesses, government agencies and consumers of every sort. The company’s business strategy centers on its ability to design and develop not only its products, but the software operating systems they run on.

Its Mac computers are first class, easy to use and run all the popular software found on Windows machines. And they run those programs better and without all the viruses, spyware, malware and hacker attacks that constantly plague Windows users.

I’ve converted several long-time Windows users to Macs, and once they saw how easy they were to use - and how few problems they had. Afterwards, they wondered why they hadn’t switched over long before.

The company single-handedly redefined the entire music business with its iPod and its iTunes music store. And it did it in a relatively short span of four to five years, generating billions in annual revenues in the process. Its share of the mp3-player market remains well above 75%.

Now it’s doing it again with the iPhone, the slickest smartphone on the market. Sales of the device grew 245% in 2008, according to a Gartner research report. That compares to 96% for Research in Motion and a paltry 0.8% for Nokia.

While the iPhone is number three in terms of overall marketshare (8.2%), it’s clearly growing the fastest, and could easily overtake Nokia and RIM in a couple of years.

In the simplest of terms, Apple has figured out how to create products that most people would design if they could give their two cents to the Apple product development teams. They’re simple and easy to use, just like everyone wants them to be.

Apple’s Cash Cow Just Keeps Getting Bigger…

Apple’s second-quarter financials will be released April 22, in what is always a highly anticipated conference call. The company constantly downplays future expectations when talking to analysts, and then routinely beats them by a wide margin.

This quarter’s results will be particularly interesting, as it will give investors a better idea as to the effect the recession is having on the company. So far, Apple has appeared to be somewhat resistant to its effects, helped in no small way by a constant stream of new product innovations and introductions.

However, one of the major sources of future revenue is constantly overlooked by analysts. Whenever the company sells an iPhone, it only books about 10% of the money it receives as revenue, and defers the rest.

It then books this annually over a period of 10 years. This is a constantly increasing future revenue stream that’s like cash in the bank. Great for when times get a little tough.

And then there’s the “Apple effect.” This is logic that goes along the lines of: “If Apple’s (iPhone or iPod) is this good, its computers must be great, too.”

That phenomenon has analysts betting the company will sell 2 to 2.2 million Mac computers for the January-March time period. The company has plenty of room to grow here, too, as it currently has under 10% of the overall PC market.

Given how well the company has been performing so far during this recession, it appears that shares are still cheap. Investors interested in owning a few shares might want to wait until after this quarter’s results are announced on April 22, as there is generally a pullback in the stock after earnings results.

Apple is certainly on top of its game, and I believe it will continue to stay there as long as it continues to make the rules that all its competitors have to follow.

Good investing,

David Fessler
www.investmentu.com

ME

April 11, 2009 08:18 AM

Ha! Mercedes doesn't make cars with Ford parts :P Apple makes computers with same parts other manufacturers use :P The "engine" is the same in both windows and macs :P Video cards are also the same and the screens are also made in china :P Last time I had any issue with Vista (not that I love windows) was after I installed my monitor, but the solution took 4 clicks. I remember when I got my wife's Sony laptop for less than $1000 when Blue Rays were still $200 :D My wife doesn't know much about computers but she never has any issues with vista, so my conclusion is that you must be really dumb to have issues with vista. Yes, I hate when morons at the store are tying to sell me pc's or mac, because
I know more than them and/or they are bias. Btw, all those Mac fanboys fell into MS trap and now they're tying to justify to the rest of us (windows & linux users) why they paid so much more for the same hardware. No, virus don't get to you because your Mac is immune, they don't get to you because crooks know that there's not many of you and it's not worth it.

Me

P.S. Classic Mac user at school is the one who never knows how to connect the projector to his/her Mac and we have to wait forever for the "cool" mac user to begin LOL

Switched2Mac

April 11, 2009 09:04 AM

I'm 60 years old and I'm a Mac. After nearly 20 years of PC hell I now have no more crashes, no infections, no GPFs. You get what you pay for. Macs rule!

CJ

April 11, 2009 01:14 PM

"Its the software, stupid.". Someday Microsoft (Ballmer) will understand this. Gates understood it. Anyone who has used Windows 7 will agree that it's Vista SP2 which translates to a less annoying version of Vista. I support Windows on a daily basis (very large software company) and here is what I see:
1) XP is still the preferred choice. Vista is offered but the ones that use it and prefer it over XP are few and in between.
2) Vista is only offered because XP support is waning for some apps. This is usually the main reason Vista is deployed.
3) Vista runs poorly on laptop hardware which runs XP just fine. (t61s mostly)
4) hard times are pushing projects to free options. This usually means Linux or open source. 2 years it was mostly commercial solutions for projects. Now days open source is first and only option most of the time. Yes this includes oo.org and Linux sever distros along with open source software.
5) the number of employees buying Macs for home use is still climbing. These are people who 2 years ago would have never gone this path.
6) even though they aren't supported, iPhones are inflitrating the Corp environment. It's a trickle now put there is no sign of slowly down. To say the blackberry users would prefer to swith would be an understatement.

So Microsodt fans boys need to wake up and demand a better product and Mac fans need keep in mind that Apple isn't the know all answer and better solution just because it has the apple logo on it.

VistaFan

April 11, 2009 01:29 PM

I bought the first Mac 128K machine. Bad move. I called Apple twice asking when the 256K chip would be available. Answer: 12 months at the earliest, so I bought a Mac and printer for $3400 which was big money in those days. You guessed it. The 256K machines were in stores two months later - for $900 less than what I paid for the 128K machine. Iphone buyers - does this sound familiar. Jobs is the Madoff of computer sales. Take your money and make you think you are special.

I built my own PC, loaded it with Vista and the OS has been solid and dependable now for a year. I just bought a laptop, installed Vista and the laptop runs with not so much as a hiccup.

You can join the Apple club if you want, but you will pay more.

daniel

April 11, 2009 02:30 PM

Hi i am pc and i am 22 yo( i had been a pc since 1995.and honestly my pc has crashed many times.but still i am not stupid enough to pay some one to fix it(bestbuy's geeksquad), i learned how to and if i needed to replace any device i just had to go to a PC store.. something that with mac i wouldn't be able to do ... i had to use mac while in school and i hated it ! i bought a sony Vaio 1y 1/2 ago still runs and even better it play games and still i can upgrade the hardware. ..there! thats something i call Priceless!

Escribe

April 11, 2009 03:01 PM

Okay, you're a PC. And what operating system are you running? Linux, FreeBSD, OpenSolaris, FreeDOS, etc. ... I think I've made my point. I always wondered if icrosoft ever considered running ads that would have said, "I'm Windows." Perhaps they decided it wasn't a good idea.

Not Important

April 11, 2009 04:02 PM

@Followers of the Mac:

Please stop preaching like you're part of some huge religious movement. Please stop acting like Apple is the savior of all things computer related, and that Steve Jobs is the Messiah. Grow up and open your eyes: Apple is all about making money. They are all about the profit margin. Read Meh's post, and then reference SkateNY's post... he happily talks about how well off he is due to their overpriced products and their huge margins. Yes, money that Apple is stealing from you by pricing their products so ridiculously high when they're not really worth that much.

Speaking of..

@SkateNY:

Thanks for showing off how bad of a computer user you are with your double post. Proves to me that the real "cream of the crop" uses Macs. Apple is all about image and this so-called "Elite" status... I'm sorry, but there is really nothing "elite" about a Mac, save for its price tag. And your rant about total cost of ownership? Well, for one, you have to take into consideration the inflated price of all the units, the cost of retraining your entire staff to use Mac OS-X, the cost of purchasing software (if you think any of the software that COMES with the OS is appropriate for large businesses, you'd be sorely mistaken), the cost of finding and hiring an IT team who can properly support Mac OS-X in a business environment, the cost of UPGRADING the OS to an incremental version every year or two (at what, $179 per upgrade? I spent $199 on my upgrade to Windows XP from Windows ME... and haven't had to pay for updates since)... oh, and when the Mac breaks, you have to likely take it to an Apple store to get it fixed, and they'll happily charge you inflated fees for their "Elite" service!

I'm tired of this argument. I am one of the first to openly state that Macs are good computers and that Mac OS-X is a great OS. Macheads need to get their heads out of their rears though and come down off of their high horses. You are not elite. You are not better than the rest simply because you own a Mac. You simply fell into the Apple trap of 'Mark it up so that we make 50% or more profit off of each unit sold' and now have to justify your wasted money when you could just as easily bought a PC with the exact same hardware for less than half the price you paid... then bought OS-X and installed it on that hardware.

Oh wait, I'm sorry, Apple won't let you do that... because they're too 'Elite' to admit that their hardware is the same as what's in a PC.

@Switched2Mac and others:

I'm glad you don't have any crashes, infections, or GPFs. I haven't seen a GPF in, wow, over 10 years? I also haven't crashed in about that long, unless it was my own actions that led to a crash. Oh, and with a little training, guess what? Anyone can be free of infections. I haven't had a virus on my computer in more than 5 years. And in the entire time I've used Windows, I've only had 4 viruses TOTAL.

Anyway, the ads are very good and I believe they will be very successful in the long run. It's what Microsoft and PCs need, and it will ultimately lead to the PC market regaining market share.

To close.. Mr. Fessler, I may just purchase Apple stock so I can make money off of the ignorant sheep who believe the Gospel of Apple and buy their overpriced 'Elite' goods. I wouldn't mind being rich off of mistakes that all these people make.

Brad

April 11, 2009 04:09 PM

Mac in the computer world is a luxury computer. The electric car is like a Mac. Too expensive with not enough options.

PCsRok

April 11, 2009 04:10 PM

I'm more than 60, and I'm not a Mac. PC's have always been cool for me - they don't crash often, and they don't get infections. I guess it depends a lot on the user.

Oh, I've used Macs - they look better, the OS is better designed, sure. But the software and parts are less available, more expensive - and not necessarily more durable. As for Macs being "easier" to use - I had to help a Mac friend find her CD eject button.

ManyManyMacs

April 11, 2009 04:49 PM

Conficker trashes the whole idea of 'windows is cheaper.' Macs aren't affected. This is the 'backfiring' other columnists were talking about. People get that Macs are more expensive, but they're more secure. It's more difficult...though hardly impossible...to create a damaging or system controlling worm or virus because it's easier to disable entry points. Windows makes itself a sitting duck by insisting on allowing easy network and outsider control. This type of outside control on Macs is also exceptionally more secure. You may have heard about a woman who retrieved her stolen laptop by having it take a picture of the online thief? You may also recall hearing about how it behaved when the picture was taken. The thief knew he was caught because the computer told him what was happening. In Windows, the user may never know who's looking in.

gooseguy

April 11, 2009 04:55 PM

These threads often erupt into old "Mac vs. PC" turf wars, which are stagnantly boring. Of more interest is the campaign itself, and whether it is or is not working.

This story, and many like it, seem to accept as fact the Microsoft story that the Seinfeld ads were "planned" and "just meant to get attention." That argument ignores the fact that they dropped that "section" of the campaign cold, paying Seinfeld but not running half the ads they prepared. Do journalists not question the Microsoft line? I'm more inclined to believe they stopped the train wreck and went back to the drawing board, and THESE ads are the result.

For the screaming about Mac's price points, the fact is Mac's market share has been steadily growing for years, including in this economy; people are increasingly ready to pay lthe premium. At the same time, Windows market share is shrinking; people are buying Macs or going to Linux in droves.

You can bet that the Windows 7 development *and* marketing teams are working very hard to try to counter that trend.

Time will tell.

PC user

April 12, 2009 04:21 AM

I had an Apple II in not so long ago. Mac is nice but I don't see the need to pay more to do similar computer work. I stay with PC since that Apple II. There wasn't any merit in a Mac to justify the higher price and limited choices in hardware and software. With PC you can load Windows or Linux, choice of XP, Vista or 7. Run Virtual Machine on it or ESX server. The PC hardware just have more choices. Ease of use on a Mac is over rated. How hard is to use Windows or Linux OS on a PC! None. It is myth Apple create to justified the high price.

Benjaymin

April 12, 2009 05:44 AM

I find this entire string of comments amusing. The bantering back and forth is priceless. Yet I am compelled to throw my two cents in.

I happen to be a Mac and a PC user. ZOMG some might say, how could you? I can tell you right now. Hands down Apple has THE best tech support. They are still biased int the states so I can at least talk to someone who understands me well, and when I have problems they are there to help. The Mac is my laptop which sadly I can't build so I rely on a product that has some quality. No I am not talking about the hardware, I am talking about HOW it was put together. I purchase laptops for my dad's company, and myself, and sadly people in the company want PCs because well they run windows and Real Estate companies need Windows, and most people just don't want to Boot Camp a computer because they could get confused. In the short run the PCs are quite alright, in the longer run I end up having to get almost every one of the bastards repaired or replace (both pains in the butt). Now there are a few brave people who get Macs and I've never really had to have anything repaired on them. My own experience was I got a doozy of a dud MacBook Pro and Apple replaced the damn thing after needing to be repaired all too much.

The Desktop is a computer I built. Yes I built the Linux/Windows box because well I didn't want to buy a Mac Pro because of price and an iMac and Mac Mini use mobile graphic cards which is fine if you aren't a power user. I also don't like any PC manufacture black boxes because they are notorious for not being the best systems when it comes to cooling. Apple at least does an awesome job with Mac Pro cooling. I how ever can control all the parts that go into the computer and do preventative maintenance.

Over all both computers are awesomely fine, and really Vista works once you get past the new stuff and OS X still is awesomely slick and easy to use and never gives me problems.

Oh and these adds really don't change much. People always want what they can't have and Microsoft is saying "take us because you can't afford a Mac" well for many people they will definitely want the Mac specially if it is said they can't get it.

Over all these adds will always be one sided, and try to skew the truth in their favor against the competitor. In reality while Mac sales may cut into windows sells for microsoft, all they have to do is start trying to market to Mac Users that they all need to boot camp their computers for windows... hell release a special Mac Windows thing and BAM you gain more market again. Sounds stupid but it would work.

Kenny

April 12, 2009 09:17 AM

i hope virus writers will look into Macs so Mac users won't say "I'm virus free".
I got 8 Winxp PCs in my house and have had not problems with hardware in 2 years. I'm admitting that some of them are infected with viruses and malwares. Why?? My "users" download all kind of software (even they don't know where software coming from). Go figure!!!

How many IT Networking techs are using Macs on their jobs? how many real gamers are using Macs to play high-end 3D games?

ls

April 12, 2009 10:26 AM

Typing this on a rock solid secure platform-Ubuntu Linux. We would not even consider paying the "Microsoft tax" on another pc.

bangengeboy

April 12, 2009 10:44 AM

im a pc user, i play games, watch movies and download music.. etc. it's cheap. works for me.

i think mac users have too much free time admiring their glossy toys and letting the world know how inferior pc is lol. here's my reply..

ok.. u just wasted thousand bucks more for typing the same comment am doin now.

adel

April 12, 2009 11:59 AM

i'm a mac user, but a friend of mine introduced me to a dell xps laptop

since then i'm in heaven

screw the mac arrogance

artzy65

April 12, 2009 06:44 PM

There's been a lot of viruses written for macs over the years but I've never come across one.

Re costs of macs... cheapskates are cheapskates so why argue with them my discerning mac friends.... we know that Apple makes great products.

I've bought 10 macs since 1996 and not one of them was brand new. My first Power Mac was (CDN)$35.00, and was a VAST improvement over my first mac. The point is a savvy user will never buy brand new... in fact THAT'S the biggest scam out there, people being sucked into getting the latest and greatest. A little knowledge goes a long way; for example my 7-year-old G4 (Tiger) will run CS4 suite quite nicely although adobe claims you need an Intel mac. And my 4-year-old G4 titanium powerbook runs Leopard 10.5.6.

The best of anything in life is by its very nature in the minority.

PC User

April 13, 2009 01:25 AM

Mac's are the "Hey everyone... look at me! I spent twice as much for a laptop that does half as much! Yay!" computers.

Sort of like folks driving a really nice car. It's just an image thing but in reality it says they're clueless computer owners who don't know enough to pay less for the same hardware.

anagama

April 13, 2009 12:57 PM

In this ad series, Microsoft seems to be ignoring the fact that "PC" does not equal "Windows", and as such, the series may not be money well spent. The focus on mere price may be self-defeating as Linux becomes ever more fool-proof simple, costs less than Windows, and doesn't suffer from the pervasive security issues of Windows.

Five years ago, nobody but tech savvy people heard of Linux. Two weeks ago, I hired a new receptionist who was already familiar with Ubuntu from using it at home, which is nice, because that is what I have running on her desktop in my office.

Because Microsoft's new ads tout nothing but purchase price, it may well be reeling out its own rope. Microsoft should focus on why Windows is so awesome, because ultimately, it can't compete on price.

For me, I favor a mix Apple laptops, the build quality is simply excellent, and Linux based desktops. Nothing in these ads suggests any reason why I should take another look at Windows -- and MS should be targeting me. I've been responsible for at least five other people getting Macs in the last five years.

dcfyi

April 17, 2009 08:27 PM

Macs are not more expensive. If you take the time to compare a MAC to a comparably equipped PC you will find that the price is about the same and sometimes cheaper. Add in Apple's build quality and far better warranty and all the included software you get with the Apple, I think you will find that macs are cheaper. And the argument that buying a pc gives you more choice...I guess if you factor in the 6 different versions of Vista, you might be right.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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