MacBook Announcement Proves Microsoft Is Right About 'Apple Tax'

On a day in which Apple released a long-overdue update to its notebook computer line but refused to lower prices on its expensive new hardware, Microsoft shared its thoughts about it calls "the Apple Tax." The idea, basically, is that Windows still offers better value for consumers because Apple includes hidden extra costs in its solutions. This is true both in the up-front cost of Macs--which are generally significantly more expensive than Windows PCs--and after purchase.

"You can get a PC laptop with a bigger hard drive, more RAM, a media-card reader, more USB ports, and a bigger screen, for much less than a Mac," a Microsoft representative told me. "\[And while\] you can upgrade just about any Windows desktop PC, the only significantly upgradeable Mac is the Mac Pro, \[which has a base price of\] $2799.00." And that's sans display.

Macs aren't just more expensive than PCs. They also do less out of the box than PCs. You can get modern features like HDMI, Blu-Ray, eSATA, MediaCard Readers, built-in 3G, Fingerprint readers, and TV Tuners built-into PCs, but none of these features ship with any Mac models, meaning you'll have to add them externally and pay extra, over and above the more expensive base price of that Mac.

This fact is especially noticeable on the just-released new MacBook machines. In typical Apple-knows-best fashion, there are no media card options, no integrated 3G wireless networking, no fingerprint readers, and no docking solutions offered. And the machines are expensive, all the more so after you factor in the additional cost of buying the needed external peripherals that aren't even offered.

This release comes amid an historic financial crisis. But rather than address the needs of a changing market, Apple actually raised the base price on its new notebooks by $200: An entry-level MacBook now costs $1299, compared to $1099 for the previous version. (the next model up is $100 more than its predecessor.) To silence critics, Apple is also selling a stripped down version of the previous MacBook model for $999. But this is a previous generation machine that first went on sale in early 2006. It is also Apple's first and only-sub $1000 notebook, and it is competing with a huge number of new PC notebooks that cost as little as $500.

Microsoft notes that the Apple Tax extends far past the initial purchase, however. If you need to do things like add a wireless router, add more storage, or perform other tasks, the relevant Apple solutions are often several hundreds of dollars more than the PC-based solutions. And if you're switching to the Mac, the cost of repurchasing necessary software can be hugely expensive.

To be fair, Microsoft's Apple Tax concept, while very real, is also self-serving: The company is trying to stem the flow of Windows users to the Apple platform. But you don't have to spend too much time in an Apple Store to notice the differences between the Apple and PC worlds. That surprised look you see on customer's faces in Apple retail locations has as much to do with the price of Apple's solutions as their industrial design.

Critics of the software giant--by which I mean fans of Apple--will complain about Microsoft's Apple Tax theme, but I think it's accurate. That's especially true when you consider the rumors that were floating around last week about Apple's supposed plans to ship a $799 MacBook model. Apple miss that target by a whopping $500--the price of dozens of PC laptops at your local Best Buy, by the way, And the company only artificially made it into the sub-$1000 price category by continuing to sell a dated, previous-generation machine. As Stanley Morgan commented in a recent research note, "The remaining source of growth \[in the PC market\] is increasingly the sub-$1,000 market where Apple does not play."

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