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Microsoft Says Apple Wanted Ads Pulled

The competition between Apple and Microsoft has always been a bit strained. Now it seems it's getting personal.

Microsoft (NASDAQ: MSFT) COO Kevin Turner revealed just how much so during his keynote Wednesday at Microsoft's Worldwide Partner Conference in New Orleans. It's the annual conference for Microsoft's partner community and normally draws the company's top executives to help re-cement the bond with their reseller channels.

Other speakers on the bill included Bill Veghte, the head of Windows marketing, and CEO Steve Ballmer.

Turner's speech had a few digs in it for Microsoft's Cupertino, Calif.-based rival.

According to him, Apple had apparently gotten upset over Microsoft's so-called "Laptop Hunter" television ads in which consumers go shopping for a new laptop and -- surprise -- find that Windows-based PCs are a better, less expensive choice than a Mac.

In the ads, consumers are tasked with finding a notebook they like that's priced under a certain dollar amount. If they find one, they got it for free. In the ads, many of the buyers considered Macs but wound up picking PCs -- in large part, because they failed to find a suitable Mac within their budget.

That got Apple's (NASDAQ: AAPL) legal department worked up enough to call Turner personally, he said.

"Two weeks ago we got a call from the Apple legal department saying, hey -- this is a true story -- saying, 'Hey, you need to stop running those ads, we lowered our prices.' They took like $100 off or something," Turner told the crowd of Microsoft partners.

"It was the greatest single phone call in the history that I've ever taken in business," Turner added, to applause.

Instead of dropping the ads, Microsoft plans to "keep running them and running them and running them," he said.

Apple spokespeople did not return requests for comment by press time.

Turner and other company execs have been banging on the Mac's high-end pricing -- calling it the "Apple Tax" -- for months. That push to emphasize Windows PCs' "value" over the Macs is just getting started, however.

"And when we put Windows 7 in there, which we've got coming out in October, what an incredible opportunity for us to fight back," Turner said.

Although acknowledging that Apple may have some legal argument that Microsoft's ads are inaccurate because of recent Apple price cuts and new products, longtime industry observer Joe Wilcox sees the pitch as a smart move on Microsoft's part.

"Laptop Hunters commercials have proved to be a surprisingly effective response to Apple marketing. 'I'm a PC' ads were OK … [but] the Laptop Hunters series is the big home run. The commercials have improved perceptions about Microsoft and Windows PCs," Wilcox said in a blog post on Betanews.com Wednesday.

Stephen Baker, vice president for industry analysis at NPD Techworld, has a slightly different take.

"There's no question that over the past few months, consumers have been migrating to lower-cost options," Baker told InternetNews.com.

However, he doesn't view Apple legal's reaction as sour grapes.

"It's more likely that, given that they've recently upgraded their products and changed their prices somewhat, the ads weren't accurate," Baker said. Still, he too sees the advertising paying off for Microsoft.

"It's a confluence of prices, economics, and good advertising," Baker added.

At least one other analyst wondered aloud if there might have been a little exaggeration in Turner's story.

"Maybe [Turner] torqued it up a bit," Roger Kay, president of Endpoint Technologies, told InternetNews.com. Noting that a lawsuit would take too long to bring to trial, given Microsoft's launch of Windows 7 is set for an Oct. 22 launch, Kay wonders if the phone call, if there was one, wasn't a bluff.

"What does it mean?" Kay wondered.

One thing's for certain: Tweaking Apple won't stop with advertising, though. The company's upcoming Microsoft Stores are also an integral part of the plan to compete head-to-head with Apple.

"Stay tuned, because we're going to have some retail stores opened up that are opened up right next door to Apple stores this fall," Turner added.