Apple Not Likely to Tolerate Orbitz Price Prejudice

Online travel site Orbitz has admitted to pushing pricier hotel rooms at Mac users, a profit-seeking tactic that factors a user's underlying hardware into Web choices. Apple risks a backlash from customers who feel unprotected, says one industry analyst. Will Apple speak out?

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Tue, June 26, 2012

CIO — While Apple customers are willing to pay more for a great product and stellar customer service, they—like everyone else—don't like to be duped. Yet that's exactly what Orbitz Worldwide, an online travel agency that lost $37 million last year, is doing to Apple Mac owners.

Orbitz tracks many factors to come up with a user's spending profile and then serves up hotel deals. Some factors include the previous site a user was on before coming to Orbitz.com, a user's booking history, and whether or not the user is on a PC or Mac.

It turns out you'll probably want to be on a PC if you're an Orbitz user. Why? Because Orbitz is pushing more expensive hotels on Mac users, reports The Wall Street Journal.

"It creates the impression that Apple users are being taken advantage of or are stupid," says veteran tech analyst Rob Enderle. "This impression could eventually drive people away from Apple."

Blowback can hit Apple pretty hard. Truth is, iPhone and iPad owners are already reeling from the notion that app vendors may be secretly recording their whereabouts, contact lists and other personal data. If Apple gadget owners can't trust that they are getting a fair shake, they might go elsewhere.

Is Orbitz alone in doing this? Unlikely. Revelations like this one can shatter the fa├žade of public opinion about the Web. That is, the Web is supposed to be neutral and a Web site should be serving up the same search results and information regardless of platform or browser.

Of course, we know this isn't true. Google searches are based on user profiles, too. But the idea that the underlying hardware—in this case, the Mac—makes a difference takes profiling to a new level.

There's no question Orbitz is serving up more expensive hotels to Mac users to squeeze out more money. "The technology can do it, and the result is higher profits suggesting this outcome is intended," Enderle says.

The Apple Macbook customer demographic is a lucrative, albeit small, one: Average household income for adult owners of Macs is $98,560, compared to $74,452 for PC owners, according to research firm Forrester. But Macs make up only a slice, 9.8 percent, according to Gartner, of the overall PC market.

Orbitz did its own research and found similar results: Mac users spend up to $30 more a night on hotels than their PC counterparts and are 40 percent more likely to book a room at a four or five-star hotel. "We had the intuition, and we were able to confirm it based on the data," Orbitz CTO Roger Liew told The Wall Street Journal.

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