Apple's back-to-school promo clobbering Microsoft's efforts
In spite of initial skepticism from industry watchers, Apple's annual Back to School promotion is off to a strong start, according to one analyst. — Global Equities Research analyst Trip Chowdhry issued a note to investors earlier …
Context & Ripple Effects
Apple's education promotion has been building for years: Fortune documented 'Big Macs on campus' in August 2010, and this year's edition was previewed in May when BGR reported Apple would pair a Mac purchase with $200 off an iPad or a free iPod touch at WWDC season. Global Equities Research analyst Trip Chowdhry now says the promotion is off to a strong start despite initial industry skepticism, with his note framing it as outperforming Microsoft's competing efforts.
The timing is helped by supply: Apple has confirmed iPad 2 availability has improved dramatically since March, with online orders shipping within a week — meaning the promo can actually fulfill demand rather than stalling on backorders.
First-order effects
- Chowdhry's note tells investors the promo is beating expectations right now in the education buying window, where Apple bundles an iPad credit or iPod touch with Mac purchases against whatever Microsoft and its PC OEMs are running.
- Microsoft's counter-position is weakened on two fronts simultaneously: its Windows Mobile base got no official Windows Phone 7 upgrade path, leaving it tacitly accepting hacker sideloads of Mango onto unsupported hardware rather than offering customers anything.
Second-order effects
- PC makers heading into their highest-volume selling season face Apple competing on bundled device value instead of price alone — the same dynamic behind Apple's earlier gains in premium notebooks, where FORTUNE's Apple 2.0 blog reported a 29% dollar share of notebooks over $1,000 back in October 2007.
- A rumored Zune-branded streaming subscription for Xbox LIVE, alongside confirmed TV partnerships like AT&T's U-Verse deal and Netflix integration, suggests Microsoft is leaning on entertainment services to hold consumers that its aging mobile platform cannot.
Third-order effects
- If the pattern holds, Apple's annual education promotion hardens into a structural moat: each cohort of students buying into Mac-and-iOS hardware extends ecosystem lock-in well past graduation, compounding the consumer-preference shifts Forbes flagged in 2007.
- For Microsoft, the split between a struggling phone franchise and an entertainment-led Xbox strategy points toward a company increasingly defending the living room while ceding ground in the bag and the pocket.
The trend: The back-to-school window is consolidating into a recurring Apple-versus-Wintel battleground where bundled iOS devices, not laptop specs alone, decide student spending.