Consumers perceive less differentiation among Windows hardware, thus they are more likely to select whichever brand offers the best price for the desired configuration. Consumers are not necessarily shifting to cheaper PCs solely based on price. Consumers trade down because there isn’t sufficient value-added to justify paying a higher price.
Conversely, there is a stark difference between spending less for a Windows PC (or any amount) as opposed to buying the higher-priced Mac. Mac OS X and the associated user experience are significantly different from Windows. Hardware isn’t the differentiating factor; it’s the OS.
PCs are not substitutes for Macs. People who desire Macs have to spend more, but those who don’t care for Macs don’t have to pay the high prices due to the availability of less expensive Windows machines. Consumers desiring Windows OS don’t purchase Macs to exclusively run Windows since it would be a waste of money. Consumers purchase Macs for the value-added benefits supplied.
The robust growth in Mac sales demonstrates that consumers are willing to pay more for Macs. Mac’s 70% share of the premium segment suggests that Macs are essentially the only computers for which consumers are willing to pay up. Windows PCs can’t compete in the premium segment against Apple. Premium Windows PCs can’t even compete against lower-priced Windows PCs.
There's an important point I need to make here aside from my own personal preference for Mac computers, and it's this: Apple is succeeding where the rest of the industry is not, because of a relentless devotion to their product and their user's experience.
You can think of the business relationship as a triangle with three points - the business, the customer and the product. Some businesses (for example, GM) put themselves at the top. Others make customer relationships - or just the acquisition of more customers (Microsoft) the top priority. But Apple serves their products. The product, its design, and its relationship to the customer are the primary focus of their activity. That's the point at the top of their triangle
Apple is smart enough to understand that an excellent product will please the customer (and attract more) and bring success to the business. They've created a market where people WANT to pay more to get their products, even when money is tight. They've also proven that you don't need or want EVERYONE as your customer, just the ones who will appreciate what you do.
That is not to say that marketing and customer relationship management does not play a part. Again, from the article:
Apple believes its Macintosh provides a superior computing experience. There is evidence supporting that claim as Apple earns the highest satisfaction ratings and gets the best reviews from industry pundits. So, it’s more about informing consumers that its product is the best than it is making its product the best.
True, although I think the author has missed the obvious point here - you have to have the best product before you try to convince people that it is, or you're going to look very stupid when they discover the truth. But he's got a point that once you achieve the excellent product, you then have to educate your customers, and that can be a involved a process as product creation in the first place.
There's a lesson in here for those who can hear it. Focus on the product. Do less, but do it extremely well. Sell it for what its worth, without apology. Protect the brand at all costs. Never push bad product out the door with your name on it. Educate potential customers as to why they should buy your product - making darned sure your customer will agree 110% with you after they spend the money to get it.
Apple gets it. As a result, they've got a golden brand, no debt and billions in the bank. Few others get it. This economy will reveal just how few.
PS: here's how NOT to do it...
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