January 5, 2013

Why Deep Discounts are the Death of Retail Sales

In a nut, computer manufacturers trained customers to expect dirt cheap prices for Windows-based laptops by selling cheap, under-powered and ultimately unsatisfying "netbooks."

Now that netbooks have thankfully gone the way of the dodo, customers aren't willing to spend the asking price for today's full-featured Windows 8 laptops and tablets.

Paul Thurrott, writing for his Supersite For Windows:

“It’s not pat to say that the Windows PC market went for volume over quality, because it did: Many of those 20 million Windows 7 licenses each month—too many, I think—went to machines that are basically throwaway, plastic crap. Netbooks didn’t just rejuvenate the market just as Windows 7 appeared, they also destroyed it from within: Now consumers expect to pay next to nothing for a Windows PC. Most of them simply refuse to pay for more expensive Windows PCs.”

Thurrott has the numbers to back up his assertions and, as a well-regarded Windows pundit isn't susceptible to the "Microsoft hater" label. Microsoft and Windows PC manufacturers have backed themselves into a retail corner.

This is why Apple never entered the netbook market. They've never made down-scale junk to pump up sales numbers, instead staking out the premium market to great success. Their nearest netbook competitor is the 11-inch MacBook Air, prices for which start at $999. While not as powerfully equipped as their mainline MacBook Pro these machines are fully capable mobile computers, sell very well and garner zero customer dissatisfaction.

Aiming high has its advantages.