The Physics of Aikido and Why Apple Should Start an OS Price War

The Japanese martial art of Aikido is a fascinating discipline. Instead of trying to overwhelm your opponent with direct superior force, the student of Aikido waits for an opportunity to re-direct the energy of an opponent back upon its source. By accepting, channeling and releasing that energy back in an unexpected direction, you use your opponent’s own attack to form the basis of yours.  The physics of Aikido are based on the ability to sense the flow of energy and to temporarily yield to its direction before ultimately pivoting and sending that energy combined with your own back upon itself.

This week various sources including The Register are reporting that Windows 7 pricing is set to be unveiled in the next month and word from the OEM market says that it will be more expensive than the current pricing for Windows Vista. With Microsoft’s own ad campaigns trumpeting the lower cost and greater value of Windows, the time is right for Apple to pull a classic Aikido move. As Microsoft announces higher pricing for Windows 7, Apple should pivot and announce dramatically lower pricing on their next operating system Snow Leopard. By doing this, Apple can redirect the force of Microsoft’s ad attack and use the very buzz generated by those ads to undermine the idea that Windows offers superior value.  It’s time for Apple to start an OS price war.

Instead of the expected $119 price tag that has graced the last few iterations of OSX, I think Apple should price it’s newest OS at $69 with a multi-pack of up to 5 licenses available for just $99. Not only would this stimulate demand among current users of Tiger and Leopard, but it would create added interest in the small business market where products like the iPhone are already making headway. Best of all, it would put Microsoft in a very awkward position. Millions of ad dollars have been spent to spread the notion that Windows is the better value. At the same time, lackluster sales of Windows Vista and the booming market in lower-profit OEM installs of Windows on smaller netbook devices have created a pressing need to show additional profitability. By pricing OS X below Windows 7, Apple would force Microsoft to choose between two equally unpalatable choices. Either they follow suit and reduce the prices of Windows 7 to compete with OS X and in so doing give up millions of dollars in much needed revenue, or they hold prices firm and face a maelstrom of negative press and user outrage, both of which undermine their carefully cultivated message of value and helps to once again give Apple a weakness to exploit.

The inevitable “Mac vs. PC” ad almost writes itself….

“FREE TOASTER!!!!!”

“Whatcha’ doin’ PC?” (Mac walks over to a table loaded with boxes of toasters)

“GET YOUR FREE TOASTER!”

“PC?”

“Okay, okay… so I had to do something to help move these copies of Windows 7. Your new operating system is not only virus free, but it’s cheaper too. I have to do something to compete!

“Well, you could always try lowering your prices…..”

(PC looks at mac like he’s crazy)

“Then what would I do with all these toasters? Didn’t think of THAT ONE, did you?

“Well, I guess you got me there.”

(PC looks pleased with himself) HA! TOASTER! GET YOUR FREE TOASTER!’

scene ends. “get a mac”

It’s time for Apple to apply the lessons of Aikido. The energy of Microsoft’s message is there waiting to be re-channeled. All it takes is the right twist at the right time and Microsoft will either be forced to compete or victimized by its own message. Either way, it’s a victory not only for Apple, but potentially for consumers as well.

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