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Apple Not Likely to Tolerate Orbitz Price Prejudice

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 facade 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.

In the story, Orbitz is quick to point out that it isn't serving up higher rates for a hotel room to Mac users. The rates for the hotel remain the same for both PC and Mac users. However, Orbitz search results may show the higher priced hotel higher up in the search string to Mac users.

While this might sound okay, it's not. Apple Mac users shouldn't be led to higher priced products simply because they own a Mac. If that's the case, how can an Apple Mac user (or an iPhone and iPad user, for that matter) trust what Web sites are telling them?

It's doubtful that Apple will stand for this. Apple will have to expose Web sites such as Orbitz, as well as third-party iOS apps, and shut down this behavior strongly and visibly in order to protect its customers.

Tom Kaneshige covers Apple and Consumerization of IT for CIO.com. Follow Tom on Twitter @kaneshige. Follow everything from CIO.com on Twitter @CIOonline and on Facebook. Email Tom at [email protected]

Read more about consumer in CIO's Consumer Drilldown.


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