Microsoft vs Apple—Two Types of People, Or Two Types of Sales Channels?

A blog about business and economics.
Oct. 29 2012 10:46 AM

Microsoft vs Apple—Two Types of People, Or Two Types of Sales Channels?

Joshua Gans has a piece about the introduction of the Surface tablet positing that there really are two types of people just like in those old "I'm a Mac and you're a PC ads."

And maybe so. But I'm pretty skeptical. There clearly are two different customer types out there, but I think it's less about two different kids of people than two categories of sales. Microsoft has dominated the computer industry for years because most computers are bought by enterprises and show up in the business investment category of the National Income and Product Accounts. Apple has done very well selling music players and mobile phones because these are overwhelmingly bought by individuals and show up in the personal consumption NIPA category. Even Macs' longstanding association with "creative" types is, I think, parasitic on this broader divergence in distribution channels. Apple is very good at selling computers to people who need a computer for work, but who aren't issued a computer by their boss.

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Note that this basic divergence shows up all the time. Not everyone has a desk in their home, but the kind of desks that people do have in their homes look totally different from desks that are installed in offices.

And I think the iPad vs Surface issue is already reflecting that same divide. Before you ask which tablet is "better" you have to ask who's paying for it. Your boss is not interested in paying extra so you can enjoy a "retina" screen. The Surface's display is fine. By the same token, your boss is not interesting in paying extra so you can enjoy Letterpress, Instapaper, and Tweetbot. From a certain viewpoint, the rich iOS app ecosystem is actually a bug in the enterprise purchasing market. By contrast, your boss is interested in paying extra so you can use Office and type out memos on a proper keyboard without draining your battery. The fact that you, personally, might really want that better screen while your boss doesn't want to shell out for it isn't about two kinds of people it's just two different social roles that you might occupy.

Who "wins" in the tablet space will, I think, largely be driven by what the market looks like. If business purchases dominate then Office is a huge advantage for Microsoft and Apple's counteroffer doesn't seem that compelling. But if individual purchases continue to dominate then we're talking about a space where Apple's had success after success. The XBox shows that Microsoft can sell to consumers, but it doesn't play to any of their corporate strengths.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.