OSNews

Yes, this is the basic marketing question here! It is a case of what Michael Porter calls difference without differentiation. That is, being different in a way which your customers do not value. An example might be, for instance, hand polishing the case of every power supply. Its different all right, but it delivers no extra value to buyers.

The clone episode suggests there are two forces at work in the Apple buying decision. One is a desire to get Mac OS. That is a respect in which Apple is different in a way that does deliver customer value. The second is a desire to get the best value hardware available to run it on. This is a respect in which Apple is different in a way that subtracts value.

For the last 20 years, the desire to get Mac OS has mostly outweighed the desire for best value hardware. There has been a period in the late nineties when it did not, so the attractions of Mac OS have limits.

It was clear when the clones were available that the attractions of having hardware and software from the same source were very limited in their appeal. This too was a difference without differentiation. Apple customers say, after the fact, that its uniquely valuable. Its probably best understood as the result of cognitive dissonance. When offered the choice of whether to pay a premium for it or not, with their own real money, they choose in large numbers not to. Large enough numbers to threaten the viability of the company. This is a fundamental and very important fact about the Apple market.

If you add all this together, the Apple marketing strategy can be characterized as follows: to force the customer to buy something very many of them do not much want (the hardware) to get something he does very much want (the software). And to keep the undesirability of the hardware within acceptable limits for the strategy to work without leading to a customer revolt.

The very interesting marketing question is whether this is the best way to extract value from the software. I doubt it. You could probably sell the same numbers of OSX copies if you bundled it with dog collars. You would make a profit on the dog collars. But you would almost certainly make more money by marking up the software a little, and not incurring all the costs of making, packing and distributing those silly dog collars.

If it were clear that customers really valued getting their hardware from Apple, there would be no question, the existing strategy would be correct. But given the evidence is that many of them would run elsewhere if they could, it must be very doubtful that forcing them so as to extract hardware margins can be economically rational, compared to a strategy of marking up and extracting the OSX value directly.