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Microsoft: Celebrate Tax Day by avoiding the Apple Tax

Apr. 9, 2009 Paul Thurrott | Paul Thurrott's Supersite for Windows

They're getting pretty persistent about this. (Of course, they do have a point. Macs are absolutely more expensive than PCs.) Brandon over at the Windows team blog posts about the company's latest Apple Tax initiative:

With the ailing global economy, I am looking at ways I get better value for my money. One way I can do this if I need to replace a computer is by avoiding the “Apple Tax.”

Microsoft sponsored a new whitepaper (PDF) from Roger Kay of Endpoint Technologies Associates which takes a look at the tax from a tech analyst’s viewpoint. His paper shows the “Apple Tax” is the combination of what people pay up front when purchasing a Mac and what people pay over the life of their computer – the hidden tax.

Roger looked into both aspects in his whitepaper, and has discovered some interesting findings around the “hidden tax” of owning a Mac – using the scenario of a hypothetical family of 4 and their costs over a five year period. Knowing that Tax Day is just around the corner here in the US (April 15), I decided to have a little fun with his findings by building a mock up tax form using Roger’s numbers that show the whopping difference this family would get purchasing Windows PCs over Macs: $3,367.

What would you do with a $3,367 “Apple Tax Return”?

I suppose you could buy a Mac. One Mac. :)

Discuss this Article 83

Dipsh t Admin
on Apr 10, 2009
lotsa, LOL at myself for not taking the 10 seconds of research. What I actually meant to say now that I look back at it is that a common retort is that MS (or their ad agency) doesn't mention Vista. What I should have said is that the Mac ads don't mention Tiger or Leopard. You're selling the entire brand and ecosystem, not a version. Anyway, shark, you are right and Foley said this very recently too. The ads are working, insofar as to get the Mac camp up in arms, examining every frame of the ads looking for *something*, anything to latch on to. The normals just see it as a commercial. My feeling about the white paper? It's like any other white paper, pure garbage. Being in IT I see the ROI white papers all the time and see the manure that emanates from my PDF reader when reading them. However, I'm sure many Mac fans on here have tried to make the argument about Macs being cheaper in the long run. Coincidentally, you guys try to promote the value proposition, which these ads try to promote as well. However, you'll beat up MS about it, at the same time using the same arguments for your own team. That's fine. Like I have also said recently, MS could give every Mac fan a 5 hour long commercial extolling every advantage, with information checked by Gruber himself, give these same Mac fans $5,000 for their time and allow them to pick from a bevy of beautiful women for some "quality" time, and they would still have something bad to say about MS. They can't win, which is fine and expected. Luckily, MS is not marketing to you guys and wasting their time.
johnpapola
on Apr 10, 2009
All this back and forth about pricing in this forum is pretty silly. There's some pretty disingenuous argument happening on both sides, from denials of a real price premium by mac defenders, to misrepresentations about the availability of software and peripherals for the Mac on by Windows defenders. The reality is clear. The Mac has a rich enough ecosystem to support most users, which in many cases is simply shared with the PC from memory and drives, to monitors and printers, to Windows itself via bootcamp or Fusion. Trying to paint the mac as being starved for third party choices, especially for consumers, is simply delusional. Denying that the PC world offers more choice at lower prices is equally so. Let's step back and think about the idea that's being put forward. What does an "Apple Tax" mean? What does it infer? What makes something a "tax"? For starters, it's a coercive charge applied to an income, good or service by government. Clearly, Apple has no coercive power over the consumer. People are free to choose what computing products they want. If they choose the Mac, they do so with full knowledge of the cost/benefit, since it is a voluntary use of their own money. But, as is the case with nerdy Apple bashers, this "Apple Tax" approach essentially treats Mac buyers as if they're being forced or tricked into buying a mac. It's a subtle thing, but that's what advertising is about. They chose this language for a reason, and it began long before the tax season. What Apple offers is a "premium". That's the more accurate term with the right connotation. The car metaphor is appropriate. A Honda Pilot and Acura MDX are functionally the same car. You can configure them to provide the same features and they both obviously do the same job. But the MDX is a "premium" version of the Pilot and you pay a "premium" to drive it. There are "premium" components that contribute to a fit and finish that is different than the Pilot. Mac's are premium. You may choose not to pay the premium for them. That's fine. But it's not a "tax". I realize that I'm, you know, actually thinking about the campaign language here. But that's sorta the point, right? To think about the campaign. I understand what they're trying to do. Using "tax" is an effort to put a negative spin on Apple's premium position. I just am skeptical that it will stick. People understand premium brands. They don't, for the most part, consider it a problem that Acura or Lexus is priced above Honda or Toyota. Premium brands maintain their brand power when they earn consumer trust and loyalty. That's how they can charge the premium price. When Apple feels the need to lower their prices, that will be the sign that the consumer is changing their mind. Meanwhile, many PC bland, I mean, brands are working very hard to climb up the premium ladder. Dell is a perfect example. Microsoft, with this campaign, is undermining their brand value as a premium provider. They are also reinforcing, sometime literally, that Apple IS a premium brand. I don't think that's smart advertising.
meason
on Apr 10, 2009
still don't think I have seen the "But you get iLife with a mac" excuse yet.... But 9/10 mac users (including myself) never use any part of iLife other then iPhoto...... which is easily replaced on the windows side.
johnpapola
on Apr 10, 2009
"The ads are working, insofar as to get the Mac camp up in arms, examining every frame of the ads looking for *something*, anything to latch on to." If that is the gauge of these ads "working", then something is terribly wrong. If consumer perceptions or preferences change in a meaningful way as a result of the campaign, THAT means the campaign is working. Internet nerds getting hot and bothered is no gauge of marketing success.
shark47
on Apr 10, 2009
Good points dipsh. And there's no doubt the white paper is garbage. That's the impression I got the first time I saw those mock tax documents.
Master3
on Apr 10, 2009
"Internet nerds getting hot and bothered is no gauge of marketing success. " No but the decline of Mac sales, and the rise of PC ones are. And these ads will further push that drive. The message resonates in this economy. A convenient little fact that you iTrolls keep overlooking through all of your meltdows, off-topic link posts, attacks on Paul, and on Microsoft over these ads. As far as effectiveness goes, MS has archived in 3 ads a complete collapse in sanity of Apple's crackpot user base. I even heard that some Apple kook fans are trying to bribe Laurn from the first ad, with free Mac stuff if she goes on camera to accept it. How flipping pathetic is that?
Lindy
on Apr 10, 2009
@sebuzero "Independent analysis" sponsored by Microsoft. Bottom of page 1.
Lindy
on Apr 10, 2009
"However, I'm sure many Mac fans on here have tried to make the argument about Macs being cheaper in the long run" Never would I say that. In most cases THEY ARE more expensive, but when comparing apples to apples it is close enough (most of the time) that is comes down to things like iLife being important or not, or malware issues not being an issue with a Mac or not. If you dont care for OS X, iLife of less headaches from malware than you can save money choosing a equally configured PC. I also know with out a doubt they use the same internal hardware in most cases. I think the only time they are cheaper is when you compare the Mac Pro workstation to a equally configured Dell Workstation as in dual quad core CPU's, 6+gigs of ram, etc.
subzerohitman721
on Apr 10, 2009
john, A few questions. If Mac's are "premium" brands, then why does the U.S. government entrust only Windows PC's to the highest levels of national security? If it's the best brand, then why isn't Mac servers and desktops used to protect the vital secrets of national defense computers by many of the world's top goverments? I'll give you that answer. Because OS-X and the Macs are the easiest to hack. But don't take my word for it. The same hacker who hacked OS-X twice through Safari for the last two years, has release a hacker's guild for the Mac. http://www.amazon.com/Mac-Hackers-Handbook-Charles-Miller/dp/0470395362/... Don't believe me? Then read it for yourself. A former NSA officer would have no reason to lie. If your "premium" brand was so good, why are some European Governments and branches prefering to switch to Linux than embrace Apple technology? Because this idea of "premium" is also a myth. Let me tell you a true story. It happened a little over 3 years ago. I remember one time a Spanyard brought his Lamborghini Gallardo on vacation from Spain to the United States. Dallas to be specific. In the garage of the Westin Galleria Hotel, in the same complex as the Galleria Mall. Right of 635 and the Tollway. Where Europeans get great service and some of the finest luxuries Dallas can offer. The young Spanyard was screaming into his cell phone? Do you know why John? Because his $200,000 just bought recently Gallardo had broken down. Brand new out of the gate and yet it was reduced to the same fate as Ford, GM, or any other car. This idea that spending more gets you quality isn't true. I've seen Toyota's that lasted longer and had greater durability than that Gallardo. The young Spanyard confided in me that this was the second time his top of the line Gallardo had broken down. Never the less, that car was broken and useless. It had to be towed away just like the non premium cars. How embarassing. And on vacation to boot in a foreign country. That day, I learned a lesson that my father had tried to teach me. You can rap yourself in luxury items all you want. It doesn't make for a better computer or a better person. You may have paid a "premium" for that piece of technology, but it doesn't make it a better machine. When 1.1 billion users have chosen the other brand and just recently took away the netbook market away from Linux, thats the only voice that matters. You can rant and rave all day about how much better the premium brand is, in the end 16 years of the choice of the other brand by people both well informed and not so well informed is the verdict of recent history. 16 years and Apple is no closer to the number one spot than it was in 1993. Now add this economic recession and a computer over a thousand dollars is out of reach of billions. Which brings me back to my point I made several blogs back. If you can't afford it, if you can't save up for it in the long run, when the urgency of your needs is now, then what value does a Mac have? If you can't buy it, it has no value. Well, now that we've debunked that myth, for the love of all things.... Can we please move on?
Dipsh t Admin
on Apr 10, 2009
"If that is the gauge of these ads "working", then something is terribly wrong. If consumer perceptions or preferences change in a meaningful way as a result of the campaign, THAT means the campaign is working." I never said that was the gauge. It was a byproduct of these ads. Finding out the results of this campaign working will take a long time to determine. However, since they have struck such a nerve among the Mac community, they must be at least somewhat worried about their platforms position. If the ads are so laughably lame, why the outrage? In the end, crafting a *single" brand out of something that is complex as an OS, as varied as the Windows ecosystem, and is used by 1 billion people is not going to happen. That's why a series of ads are created that are, yes, a response to the Apple ads. All too long they stood around and did nothing, and the Apple fans bashed MS for not doing anything. They would tell you that "proves" Windows is inferior. Now they finally give them what they said MS should do, and it is still the same reaction. And once again, given the economic environment, showing lower price and value is important. Hey, Apple gets that too. I saw a full page ad in the back of the Wall Street Journal espousing the economic benefits of an iPhone, since you can download apps, some of them paid, to help you find cheaper deals, keep track of finances, etc. Even though it is supposedly the coolest, hippest, best phone on the planet, they still have to convince people in this climate about value. Who woulda thunk?
DRWAM
on Apr 10, 2009
I bought a G4 tower for $2500 in 1999, upgraded the CPU between 2003 and 2005 for $300, and RAM for $100, then vid card for $100, and it runs Leopard well for $100. I replaced the DVD burner for $40. That's it, for a ten year run and more to go. My $849 eMachine mobo died in under 15 months. My buddy's $4000 Dell died in under 18 months [mobo also]. Most of my friends do not upgrade apps or OS, some still use Tiger the shipped OS on their laptops. My 4 yr old home built $1500 XP PC is still running fine, although I did need to reinstall XP twice and had a nasty Virtumonde Trojan [that I installed myself!]. But the Apple laptops are overpriced, and heaven forbid that you want to upgrade the base model Mac, because it will empty your wallet. I think that there is a significant Apple tax on upgrades. Fortunately, most base models don't need any upgrades these days. But still, talk about sticker shock!
ivymike
on Apr 10, 2009
Holy crap is this author a disingenuous hack! He compares a Mac with Office against a Dell without Office in a multi-year cost comparison. He then ignores any comparable software that the Dell would need to meet iLife, etc... ugh, what a waste of internet bandwidth.
Master3
on Apr 10, 2009
"If the ads are so laughably lame, why the outrage?" Because MS doesnt have the right to advertise itself unless it in the parameters that Apple fans set. Which is simply "M$" sucks, Apple is perfect, and PCs are crap. Their currency is rage, and judging from all of the talking points they are tossing around, they dont have a coherent message as to why these ads are supposedly "stupid" and "ineffective", so they are just tossing everything out there and hoping something sticks. Most of the time they just come across as arrogant, mean, and petty. They are even trying to get to the people in the ads, which is a bit scary. I hope someone gets some protection for that kid in the latest ad. Some of these guys are crazy enough to try to go after him.
DRWAM
on Apr 10, 2009
I must agree with the talk about today's economic environment and need to sell more affordable wares. MS could easily win big when after Win 7 ship and is found to be very secure. If they started that campaign, and the economy stays the same, there may be fewer switchers from Win to Mac, and more in the reverse direction. As Ken stated Windows does everything that a Mac can do and more, but as money gets tight, consumer choices will narrow to low end hardware. Heck, even I knew that all I needed in a laptop was a $399 ACER, and I'm very happy with it. It makes me fear for Apple a little.
johnpapola
on Apr 10, 2009
Subzero, That's a nice strawman you've constructed. If it had the ability to respond to your post's points, I'm sure it would enjoy the exchange. Meanwhile, in this actual conversation about branding, I never made any claims at all about the relative merits of the Mac over the PC. I made no effort to say that the Mac was the "best" or "better". There are premium PC models and brands. Apple is one of them. They have a longstanding record now on reliability. Their build quality is broadly excellent (though by no means perfect). I certainly made no references to its use by our incompetent government or the security of the Mac platform, which is a complete non sequitur and totally irrelevant to the conversation. European socialists deploying linux is equally so. Honestly, I wouldn't expect a government to go with a system that locks them into a single hardware vendor. But again, all irrelevant. You're even misrepresenting my auto analogy. The mac isn't a Lamborghini and doesn't carry that kind of price differential with it's alternatives. My Honda v. Acura or perhaps Toyota vs. GM is a very proportional comparison. And, again, the PC world has comparably premium models and brands that are priced comparably. The Dell Adamo is just one example. Sony is another. As for being in the "#1 spot". Not sure what that means. I certainly don't remember that being a stated or implied goal on Apple's part. They have, in fact, said the opposite. Jobs and company have repeatedly stated that there are types of machines that don't fit into their brand vision (stripped down machines). Still, they are in the #1 spot in the Customer Satisfaction surveys by a wide margin and have been for years. They are doing gang-busters business with huge profits, no debt and over 20 billion in cash reserves. The goal of a company is to make money, though I can understand how that idea is getting lost these days. They're ranked along side Dell for top supply chain efficiency. The only "myths" you've "debunked" is a story you seem to have constructed in your own mind. I must admire that you end a post that's so off-topic and so strawman-driven with "can we please move on?". That's a nice touch.
DigDug
on Apr 10, 2009
I wasn't to off put by the Mobile Me stuff or the iLife charges in there. I bought my Mac last year and was pretty put off when iLife 09 came around. It gave iPhoto (the only iLife app I really use) some nice features that Windows Live Photo Gallery already had, and then wanted to charge me $90 to get them. MS (and everyone else competing for that market) gives away the same features for free. And in a 5 year life span, there's probably going to be a point where I'll cave and buy those extra features. So adding in an upgrade seems pretty reasonable. MobileMe is a bit of a different story. Its a complete and utter failure on Apple's part to compete with Google and up-and-comer MS Live services. I wouldn't agree with it being put on there... EXCEPT that OSX shoves it down your throat every time you turn a corner. It seems like a least once a week I'll see me or my wife accidentally click on something in the OS (A preference in an application. An option in the Apple menu) that brings it up. For someone who doesn't know much about the service (or the alternatives) I could see a whole lot of users signing up who just don't know better and over a 5 year span wasting a boatload of money on it. And I think these ads are made to focus on price of hardware, not on software. There are ads out there (the one with the little kids doing things that Apple claims are hard on PCs) that are all about the software. I don't think MS is ignoring that argument. They're just not trying to take on their entire Mac Vs. PC ad campaign in one 30 second block.
DRWAM
on Apr 10, 2009
Subman, aren't you from Texas? Didn't they just try to ban Vista from the government? http://consumerist.com/5194331/texas-bans-vista-for-state-gov http://www.google.com/search?q=texas+bans+vista&ie=utf-8&oe=utf-8&aq=t&r...
beaker
on Apr 10, 2009
ah, another post to get the traffic up on the site. anyone who really believes these commercials can't be very technical. I also don't understand why MS isn't pushing their superior OS and other various software flavors?
Master3
on Apr 10, 2009
"ah, another post to get the traffic up on the site." No one is forcing you to be here. "anyone who really believes these commercials can't be very technical." Anyone that believe you can be very competent. NO ONE IS QUESTIONING THE BASIC PREMISE THAT PCS OFFER MORE AT A LOWER PRICE. No matter how many lame attempts you clowns try to change the subject, the basic premise still stands. "I also don't understand why MS isn't pushing their superior OS and other various software flavors?" Why doesnt Apple ever talk about OSX? I mean, it soooooooo superior to all that is out there, you would think it would have its own ads. Nope just basing PCs and Windows. Apple must be real confident in their OS, right? Why are they hiding it?
Lindy
on Apr 10, 2009
@subzero http://www.forbes.com/2007/12/20/apple-army-hackers-tech-security-cx_ag_... Why did the military ban USB devices? Malware on Windows. The power grid in the US has been hacked are they running Macs or Windows? On April 1st were Mac or Windows users in a panic over a possible virus? Is Windows market share growing or shrinking? Is Mac market share growing or shrinking? Is IE market share growing or shrinking? Is Vista a success? In the corporate world? How is the Zune doing? Xbox 360 make any money yet? Its all how you spin it brother.
Lindy
on Apr 10, 2009
"I wouldn't agree with it being put on there... EXCEPT that OSX shoves it down your throat every time you turn a corner. It seems like a least once a week I'll see me or my wife accidentally click on something in the OS (A preference in an application. An option in the Apple menu) that brings it up. For someone who doesn't know much about the service (or the alternatives) I could see a whole lot of users signing up who just don't know better and over a 5 year span wasting a boatload of money on it." Total utter BS. I have never been bugged to buy or use MobileMe on my Mac. Here is a clue, when it asks for a credit card, click cancel. Your argument if valid, which its NOT, would go for Windows as well. PC's come loaded with shAt, the is trial ware garbage, including Office that want money at the end of 30 or 90 days. Maybe you are right and that is how Microsoft has made so much money, everyone just whips out the credit card and purchases whatever comes up on the screen. Including MobileMe for Macs, and not including AV software for PC's is pure BS and screams BS when you read that paper. In fact including the iLife upgrade is BS as well. Why dont that include the cost of photoshop elements which is more inline with iPhoto than any live app, and the upgrade cost for the PC users.
Master3
on Apr 10, 2009
Why did the military ban USB devices? Malware on Windows. " Yet the thing is they are still using Windows. "The power grid in the US has been hacked are they running Macs or Windows?" Be more concerned that nations are trying to hack the US powergrid. "On April 1st were Mac or Windows users in a panic over a possible virus?" Most of us weren't. And nothing happened. Damn you Windows for not stopping the media hype! "Is Windows market share growing or shrinking?" According to the last quarter...Growing. "Is Mac market share growing or shrinking? " According to the last quarter...Shrinking. " Is IE market share growing or shrinking?" New version just released, anyone's guess. How is Safari doing? "Is Vista a success?" Used more than OSX and Linux combined. So that would be a yes. Microsoft will also now have Win7 released soon. So when all is said and done OSX will be 4th behind a Windows OS, a Windows OS.....and an almost 10 year old Windows OS. Ouch. " How is the Zune doing?" As well as AppleTV, MobileME, Macbook Air, Mac computers, OSX, and almost everything Apple makes. I'll let you decide. Careful, you will lose your Apple fan street cred either way you decide. " Xbox 360 make any money yet?" Yeah. Games are doing very well in this economy. "Its all how you spin it brother." Cant argue with that. :^/
stevejobs
on Apr 10, 2009
Please, people! Remain calm! Can't we all get along? No one should be surprised by this post or angered by its content- it follows to the letter the Laws of Thurrott. Let's review them, shall we? 1) Paul may mildly criticize MS or one of its products, but only so that a week later he can turn around and award the same product five Paul heads and proclaim it a surprise turnaround success. 2) Paul may speak admirably of Apple or one of its products, until such time as it becomes a threat to Microsoft, at which point it will be officially reviewed and receive two Paul heads or less. Paul will then proceed to mock owners/subscribers of/to this Apple product, while continuing to own and make use of it himself. 3) You always heard it here first on the SuperSite. 4) If any other blogger claims to have revealed something first, or has disagreed with Paul and/or the MS Marketing Department's opinion, refer to Law 3. Also, said blogger is a hypocrite and lackey for the iCabal. 5) Quotations from MS-sponsored publications shall be repeated verbatim without question or analysis. Quotations from any blogger who differs in opinion, or any Apple-sponsored publication, shall be converted to straw men and attacked. There! Now that we've had a refresher, let's all sit back and anticipate what comes next.
DRWAM
on Apr 10, 2009
Lindy, many businesses like mine did not upgrade to Vista since legacy software replacement would be an enormous cost to maintain compatibility, otherwise we would have upgraded. Gosh, I was just told [and cannot verify the validity] that GE Centricy, which we need on almost all computers, does not work with IE 7 in Vista 64 bit. If true, that's not the fault of MS, but the fault of GE. The life of thse PC's is definitely shorter than my Macs, but we would definitely buy Vista replacements of our old vital legacy was compatible. Heck, Our transcription app, Medical Manager, stopped selling a decade ago! However, it would cost us 1 to 2 million dollars to replace it, a luxery that we just cannot afford in this economy.
Lindy
on Apr 10, 2009
"You always heard it here first on the SuperSite" Fraking hilarious!!!! Every time Paul reminds us through his writing that he was first, I always think how 4th grader. He must have callouses on his hands from patting himself on the back:)
Waethorn
on Apr 10, 2009
@"stevejobs": aren't you dead yet?
Waethorn
on Apr 10, 2009
@Master: WIN! btw: about the US power grid, I'd be more afraid if it WAS on Mac's considering how well (or is it "how badly") the last couple of PWN2OWN contests and MoAB r@ped OS X. Hackers know that OS X is easy to hack. You can say it doesn't get attacked because of market share, but the way I see it, it's like nobody considers it a challenge to do so - like credibility for hacking it has no value.
robertsjoe
on Apr 10, 2009
The hypocrisy of this blog is getting to extraordinary proportions. If this had been Apple, you'd be going on about how it was something that Apple paid for. But of course not. The whole thing is a joke. As if something Microsoft paid for isn't going to come back with results that are in their favour. How naive are you people?
robertsjoe
on Apr 10, 2009
Price is the only thing Microsoft can play with in this game. The truth is that in all other areas Macs (and OS X) are superior. If you want a much les biased analysis, check out all the Get A Mac ads. They are truthful and don't hide behind people's economic hardship in the global economic crisis.
robertsjoe
on Apr 10, 2009
It's amusing to see all these price comparisons. Do Windows users have no taste? Do they not see when something is better than what they have? I guess it's difficult admitting you were wrong. And yes, you are all wrong.
robertsjoe
on Apr 10, 2009
@yert: "Paul Thurrott does own a Mac laptop (for the hardware), but not even the foaming at the mouth Mac fans remember that here." And what does that mean? It means nothing. It does not take away that he is a rabid Microsoft fanboy. They pay his bills (indirectly) afterall. It would not put food on his table if he was to be unbiased in his "analysis"
robertsjoe
on Apr 10, 2009
You have to remember that he Microsoft tax is always with you when you purchase a PC and run Windows on it. You pay for it for the rest of your life.
anonymous
on Jun 19, 2009
The latest routers are just so much more powerful than the old ones.

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