OnDemand WTP Pricing Research

Pricey Macs and cheap Chromebooks squeeze Windows in the middle| betanews

Mac gains are the season’s big surprise, because Chromebooks outsold the pricer computers for about 18 months. NPD characterizes Mac laptops as the season’s “star performers”, with unit sales up 16 percent but surging 27 percent during the last three weeks before Labor Day (measurement starts July 4th).

But Chromebook inflicted greatest harm against Windows PCs, accounting for 18 percent of all laptops selling for less than $300 — the one growing segment of the U.S. retail PC market. Working with partners, Microsoft initiated co-marketing efforts that lowered prices to compete with Chromebook. The strategy succeeded and failed. Sub-$300 Windows notebook unit sales rose 37 percent year over year, but ASPs fell to $242 from $271.

“They were certainly successful with their pricing activities”, Stephen Baker, NPD’s vice president of industry analysis, tells me today. “In the crucial last 3 weeks of BTS they delivered a 4-percent unit increase on Windows, on the back of an overall 8-percent price decline, and you saw a lot of that decline in the under-$300 numbers we shared. That 4 percent was better then the negative 6 percent they showed the first 7 weeks of BTS”.

Microsoft sees two-in-one touch models, which take advantage of Windows 8.1’s Modern UI and offer alternatives to tablets, as a differentiator. Unit volumes rose six times per annum; two-in-ones share of Windows sales was 13 percent.

However, the aggressive pricing strategy to hold back Chromebook in the one growth segment hurts two-in-ones. “The entry-level price cuts damaged the Windows touch market as share of touch notebooks fell from 44 percent in June to 40 percent for all of BTS — and over the last 3 weeks just 39 percent of Windows notebooks were touch”, Baker says.

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Pricey Macs and cheap Chromebooks squeeze Windows in the middle.

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