Apple and Microsoft Corp.’s Macintosh Business Unit (MacBU) will announce on Tuesday that customers purchasing a Macintosh computer can also get Microsoft Office v. X at a greatly reduced price. While industry analysts see the combined efforts of the companies as a positive sign, one analyst also points to pricing pressures as a leading factor of the promotion.
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Dubbed “Office party,” the offer, valid from Oct. 1, 2002, through Jan. 7, 2003, allows North American customers that purchase any Mac system to also purchase Office for US$199 if purchased on the same day.
“We see this as a great example of how Apple and Microsoft are working together to bring new products and new offers to the Mac market,” Tim McDonough, director of marketing for the Macintosh Business Unit, told MacCentral.
Apple and Microsoft are running a similar offer in Japan that ends in December and the companies plan to bring the offer to Australia, Europe, Malaysia, New Zealand and Singapore in November.
“We’ve always said Microsoft Office is an important set of applications because of its use in so many markets whether it’s education, creative or in the business market,” Phil Schiller Apple’s senior vice president of Worldwide Product Marketing, told MacCentral. “We have done things in Jaguar to allow the Mac to fit into Windows networks really well and having an Office suite that is file compatible with the Windows version makes it seamless to have a Mac in a Windows environment.”
While the $199 price tag for Office v. X is a substantial discount from the regular price of $499, it still falls short of the price Microsoft offers Office to its Windows users. Continuing pressure from a sluggish economy and slow sales of Office may also be contributing to the new promotion, according to one industry analyst.
“This is similar to what they do on the Windows side, but a little more expensive — about $50 more expensive,” said Roger Kay, an analyst with International Data Corp. (IDC). “There’s a tremendous amount of pressure on pricing right now — this is an incentive to stimulate Office sales and that is an indicator that they need stimulating.”
In mid-July MacBU General Manager, Kevin Browne, said that Microsoft might re-evaluate its relationship with Apple unless they make a stronger effort to market the operating system. Frustrated with lackluster sales of Office v. X, Browne reported that they had sold 300,000 copies of Office v. X, less than half of the 750,000 copies they expected to sell since the software was released.
Analysts think today’s announcement could help smooth the perceived friction that developed between the companies and it could also help boost sales of Office and Mac systems.
“I do believe this joint announcement is aimed at quelling the public’s opinion of what could be termed a tumultuous relationship of late between Microsoft and Apple,” said Toni Duboise, senior analyst with ARS. “I don’t think it will quell all fears, but it certainly cannot hurt at this point.”
Heading into the busiest season of the year, the Mac/Office promotion will give both companies a sales push leading up to the holiday buying rush.
“The results will be two fold — First, it will give Apple something to hang their hat on throughout the entire holiday season,” said Duboise. “Second, I’m sure Apple hopes that this will stimulate new system sales — whether it be switchers or Mac loyalists just looking for an extra push into Jaguar.”
Apple has spent a lot of money on the launch of its recent switch campaign and having the cross-platform Microsoft Office in its stable of applications will be an important draw for consumers.
“Microsoft’s support is imperative for the future of the switcher campaign,” said Duboise.
Despite the problems earlier this summer, executives from Apple and Microsoft say the working relationship between the two companies is very strong and positive.
“We continue to work closely together. We worked hard to make Mac OS X Jaguar a huge release and they worked hard to make Office a great product for the Mac. Our relationship is really strong,” said Schiller.