Robert McLaws: Windows Edition

Blogging about Windows since before Vista became a bad word

Apple Should Count Its Own Beans First

Apple’s latest ad, “Bean Counter”, attempts to claim that Microsoft should have spent the $300M it used on its latest marketing campaign on fixing Vista’s issues. Let’s set aside the fact that Windows 7 sticks it to Apple (hard core), or that Apple can’t ship anything without a v0.1 release 4 days later, and focus on just the Bean Counting, as Apple suggests.

Steve Sinchak from WinGeek did an exhaustive breakdown of Apple’s spending vs Microsoft’s spending, and if you’ve ever spent any time looking at Microsoft’s quarterly reports, the following won’t surprise you (I’ve broken it down into table form for easy reading):

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Besides what Steve pointed out, a couple things jump out at me:

  1. Microsoft has twice the sales income as Apple.
  2. Microsoft spent the equivalent of 64% of Apple’s entire yearly advertising spending on a single campaign.
  3. Microsoft spends 10x as much on R&D as Apple. On a % of sales basis, Microsoft spends 4.2x more per dollar earned than Apple.
  4. Apple spends 1.7x as much per dollar on R&D than it does on advertising. Microsoft spends 5.2x per dollar on R&D than it does on advertising.
  5. Put another way, Microsoft spends nearly as much in R&D per year than two years of Apple net profits.

The old saying goes, “If you point a finger at someone,there will be three pointing back at you.” I guess in Apple’s case, there are 4.2 fingers pointing back at them. Apple would do well to get over its penis envy and heed its own advice than to point fingers on this one.

[Hat tip to Steve for doing more investigation on the matter than any of the mainstream tech press did.]

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Comments

  • Joel Thomas said:

    Well said!!! I am starting to hate Apple....they are trying to get famous by being infamous...I have never seen an Apples ad or Steve Jobs opening statement which tells whats the best in their product before telling whats not there in others product.

    October 29, 2008 2:24 PM
  • Mark Polino said:

    My CPA certification agrees with your premise, not to mention that a greater % of Microsofts $ fall to the bottom line (roughly 27% for MS vs. 16% for Apple).

    However, the MBA in me says that you've missed the point. Apple's ads are more effective by what ever measure you choose to use. I'm far from an Apple fan boy and it requires restraint not to throw things at the plasma TV when Apple commercial is on but there is no denying that they work.

    Mark

    October 29, 2008 2:32 PM
  • bernard said:

    Y'know, I was waiting for somebody to go look at the numbers with this one. I cussed out the TV when I first saw those ads, it got me boiled up how there's no end to Apple's misleading advertising. Good job to Steve for investigating, and to Robert for reporting!

    October 29, 2008 2:55 PM
  • John Doe said:

    assuming your figures are correct, I think this article backfires on your point. Let's analyze your own conclusions:

      1.  Microsoft has twice the sales income as Apple.

    Apple has less than a tenth (1/10) of Microsoft's market share, doesn't this imply they have a much better Business model than MS? or at the very least, that they are much more competitive?

      2. Microsoft spent the equivalent of 64% of Apple’s entire yearly advertising spending on a single campaign.

    How is this a good thing when the only reason people talk about that campaign is how pointless it was? Spending more is good, spending it better is great.

      3. Microsoft spends 10x as much on R&D as Apple. On a % of sales basis, Microsoft spends 4.2x more per dollar earned than Apple.

    Indeed, MS spends huge amounts on R&D... and yet apple performs better (1/10 the size, half the size). Not to mention leopard's reputation is probably an order of magnitude better than vista's.

      4. Apple spends 1.7x as much per dollar on R&D than it does on advertising. Microsoft spends 5.2x per dollar on R&D than it does on advertising.

    Once again, however spends more money doesn't win. It's who comes up with better products. If MS's R&D ROI where anywhere near as good as Apple's, they would be coming up with far superior products (Windows 7 is a step in that direction)

      5. Put another way, Microsoft spends nearly as much in R&D per year than two years of Apple net profits.

    Once again, more isn't always better. I would argue that this figure shows the awful ROI of MS, If I were an investor on that company I would deman to know why they are squandering the money like that, when apple can do the same or more on a much smaller budget.

    October 29, 2008 4:24 PM
  • Bob said:

    @John Doe

    "Apple has less than a tenth (1/10) of Microsoft's market share, doesn't this imply they have a much better Business model than MS? or at the very least, that they are much more competitive?"

    On its own it implies nothing beyond the obvious: one is a software company and one isn't.

    "How is this a good thing when the only reason people talk about that campaign is how pointless it was? Spending more is good, spending it better is great."

    Inaccurate. The campaign has many parts and isn't over. So its impact both short and long term is still TBD.

    "Indeed, MS spends huge amounts on R&D... and yet apple performs better (1/10 the size, half the size). Not to mention leopard's reputation is probably an order of magnitude better than vista's."

    See above on the first. On the second, that depends on who you're sampling. Also, Vista was a major change akin to early OS X. If you review early OS X reviews, they weren't favorable.

    "Once again, however spends more money doesn't win. It's who comes up with better products. If MS's R&D ROI where anywhere near as good as Apple's, they would be coming up with far superior products (Windows 7 is a step in that direction)"

    Valid point on the former. Nonsensical on the latter. Microsoft is involved in far more businesses than Apple.  But it's reasonable to question the return MS has been getting from its huge R&D investment overall, and what it got for Vista specifically.

    "Once again, more isn't always better. I would argue that this figure shows the awful ROI of MS, If I were an investor on that company I would deman to know why they are squandering the money like that, when apple can do the same or more on a much smaller budget."

    Again, valid on the former and nonsensical on the latter. Even if you compared just desktop OS spending, MS clearly has to integrate more platforms and devices. So you would expect their R&D spend to be more. Also, this is what, the 6 or 7th version of OS X since 2000? It didn't get there overnight.

    October 29, 2008 6:32 PM
  • NickelGreen said:

    I like a lot your calculous, Robert.

    Btw, did you notice that you are topping at pdc site header? :-) check it out.

    October 29, 2008 7:55 PM
  • Terry said:

    If you "hate Apple" or any company it is so all about you and your personal issues not about them.  it is always amusing to see Windows/Microsoft apologists.  Firstly because it's surprising that there are any.  i mean who could be a Microsoft fanboy?  Someone who likes mediocre products?  You respect a company like Microsoft that has lied, cheated, and stole it's way to where it is?  Allrighty then.  Good luck with that.  So all they are left with are rants like this or jumping up and down about minor issues with Apple products that get fixed anyway.  If you don't like Macs at least use Linux so you can have some shred of self respect and then you won't have to be so obsessively defensive about using Windows.

    November 23, 2008 5:38 PM
  • Seawolf said:

    So obviously you don't like Microsoft, and some of us do.  I would love to just be flippant and tell you to go...ahem.  But realistically, if you have some disagreement with what he actually said, you should explain it.  Instead, you're just attacking Windows fans and at least 99.999% of humanity will completely ignore you.

    November 27, 2008 12:56 AM