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Half a decade ago, the war between Apple's (NASDAQ: AAPL ) Mac and PCs running Microsoft's (NASDAQ: MSFT ) Windows was all the rage. Apple's commercials poked fun at Microsoft's operating system, while discussion boards across the Internet were filled with endless topics dissecting the merits of the two competing PCs.
That era seems to have come to a close. With the market for traditional PCs shrinking, and mobile devices growing ever more popular, the debate has shifted -- now its Apple's iOS against Google's (NASDAQ: GOOGL ) Android. Windows against Mac is a thing of the past.
Or is it? Although the traditional PC is fading, it is unlikely to ever truly die. Now, Apple appears to be taking the PC market more seriously than ever before, and in the end, perhaps the Mac will ultimately prevail over Microsoft's Windows.
Apple's iPad event wasn't really about the iPad
The press largely characterized Apple's event on Tuesday as its "iPad event." To some extent, that's fair -- Apple announced two new iPads. Yet, it would've been far more accurate to call it Apple's "Mac event" -- Apple spent almost twice as much time discussing the Mac as it did the iPad. In fact, for an event that lasted only 90 minutes, the iPad received decisively little attention. Apple might've saved the best for last, but it didn't discuss the iPad until the final 30 minutes.
Apple spent the entire first hour on the Mac -- the Mac Pro, the MacBook Pro, and its new operating system, OS X Mavericks. The new version of OS X includes a number of improvements and additions, but most notable may have been the price -- Apple is giving Mavericks away for free. That's not that significant (the last update only cost $20), but it does lessen the cost of owning a Mac over time.
Updates to Microsoft's Windows are notably more expensive, usually costing $100-200. No one is forced to upgrade to the new version of Microsoft's operating system, but a user could easily spend several hundred dollars on Windows updates over the life of their PC.
Apple cutting Mac prices
Free OS X makes a Mac less expensive over time, but Apple could cut the upfront cost of Mac ownership as well. On Tuesday, it lowered the price of the MacBook Pro by $200, and more price cuts could be coming.
According to Ming-Chi Kuo, an analyst at KGI Securities with a solid track-record, Apple is preparing to cut the price of the iMac next year. Kuo also expects Apple to unveil a new member of the MacBook family -- a 12-inch laptop -- that could be cheaper than Apple's current laptops.
Apple has also decided to include iWork -- its competitor to Microsoft's Office -- for free on all new Macs. In addition to buying Microsoft's Windows, many PC users also buy Office. By including its own Office competitor for free, Apple is further driving down the cost of Mac ownership.
Microsoft is confused
Of course, even if Apple cuts the price of its Macs, they'll still be relatively expensive. The average PC generally sells for around $400-600, and PCs running Microsoft's Windows that retail for less than $300 are still popular. Yet, Windows may be in danger -- Microsoft seems to be alienating both its users and its hardware partners.
Apple's CEO Tim Cook took a shot at Microsoft on Tuesday, saying that its competitors were "confused." By that, Cook meant Microsoft's strategic decision to create a hybrid operating system. Windows 8 is made for both traditional PCs and tablets, and with its two separate interfaces, works well on either type of device.
Yet, Microsoft's Metro interface, optimized for touch-screens, seems out of place on a traditional PC. It can still be controlled with a mouse and keyboard, but it isn't ideal. Some users have been upset with the revisions, and Microsoft's customer satisfaction rating has fallen to its lowest levels since 2007.
Microsoft's hardware partners, too, are upset with Microsoft's decisions. Hewlett-Packard's CEO Meg Whitman called Microsoft a "competitor." Microsoft's flagship Windows 8 devices -- the Surface and Surface Pro -- compete directly with Windows devices sold by HP.
Google's Chrome OS is slowly growing
HP isn't abandoning Microsoft's Windows entirely, but it is focusing more on Google's competing operating system, Chrome OS. By the end of the year, HP will have released three Chromebooks, and more could be on the way.
Google's Chrome OS isn't much of an operating system -- it's mostly just Google's Chrome browser, a gateway to the web. Still, as cloud-based web applications become ever more powerful, Chromebooks are becoming more capable, and in time, they could capture a sizable chunk of the PC market -- in fact, Google's Chromebooks are the fastest growing segment of the PC market.
Also, partly because Google gives Chrome OS away for free, and Chromebooks don't run any local software, Chromebooks are incredibly cheap -- HP's new Chromebook 11 is just $279, and Google sells Chromebooks on Google Play for as little as $199. They also include deep integration with Google's Apps, Google's free alternative to Microsoft Office.
The PC market is Microsoft's to lose
Although its iDevices may continue to grab the headlines, Apple is slowly positioning its Macs to capture a larger segment of the PC market. Now cheaper, and with free software, Apple's Macs could appeal to a segment of PC buyers turned off by Microsoft's revisions to its operating system. Meanwhile, Google is going after the bottom -- cheap Chromebooks are becoming ever more potent alternatives for buyers on a budget.
The PC market isn't the behemoth it once was, but it remains crucial to Microsoft's Windows. Unfortunately for Microsoft, it appears to be a market it's in danger of losing.
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