The new Microsoft ads are an interesting tact – finally admitting that they are the $.99 Store of technology – nothing really wrong with that but they are basically preaching to the choir.

We know from NPD data that WIN/MS marketshare with retail buyers of personal computers is down to 34% marketshare (Apple has the remaining 66% marketshare). Clearly most computers buyers don’t really need to be told that if your only criteria is rock bottom pricing, those Sunday circular ads scream that every weekend.

Of course, isn’t this campaign going to tick off all their partners – basically telling people who are buying PC’s there is no reason to pick and choose from Sony, Hp, Dell, Asus or whatever – just go for the rock bottom pricing computer – why pay a penny more as long as it’s got MS Windows in it?

A solid selling point for MS & Windows – but how do PC makers who spend millions/hundreds of million on branding feel about this?

There are only two choices (according to MS) – Apple and Microsoft and the messaging -damn, those OTHER guys are expensive, our actress just window shops to know that – while you know us, we’re cheap! We’re Microsoft and Windows!

So, goodbye margins to PC makers (except Apple).

Microsoft is specifically telling customers NOT to expect to pay more than $699 for a computer with Windows on it.

Interesting strategy.

It’s not exactly breaking news – again, as consumers who are willing to spend more $1k on a computer choose Macs 2 to 1 over MS & Windows machines at retail so how would this new strategy move the bar by very much other than confirming that people unwilling to spend more than the minimum choose a PC?

The more subtle issue that is brought up in this spot is does it re-enforce or create the perception that MS/Windows and the computers it’s included with is not worth any merit other than price? So, what messaging is it telling to tech savvy consumers? Will they feel they want to be grouped with the likes of this “reality actress?” Does this ad merely serve to reinforce that if you are tech savvy (ie: having a longer list of requirements for a computer other than screen size & cost?), maybe you are NOT part of this group after all?

The bottom line is the ad says we’re cheap – that message might be fine for a retailer but is that an effective strategy for a technology company – ANY technology company?

It’s fine for MS as it really reaffirms the message that they are the choice of budget shoppers but there are two other problems it might create – a) Do PC vendors resent MS telling consumers anything above $699 is too much to pay for a computer? – that brands are pointless or more than one feature requirement is an exercise in futility? and b) What happens when WIN7 is released – will it be a repeat of Vista where hardly anyone will buy the retail version because why pay $199 or $299 for an OS upgrade when for another $400 you can get an entire computer with it?

So, while the new MS ads are a different strategy, are they actually a better strategy?