Microsoft'sin late May has made PC protection cheaper, according to data from The NPD Group. At the same time, security products are becoming more comprehensive, analysts said.
"Microsoft is really shaking up this whole market in terms of pricing," said NPD analyst Chris Swenson. Moreover, with Windows Live OneCare Microsoft has also challenged the bundling strategy of its competitors, forcing them to add features instead of selling them separately, he said.
Average retail prices for security suites and PC care packages hit a two-year low in July at $54.57, and the pricing trend continues downward, according to NPD data compiled late last week. With Microsoft's entry, stalwarts Symantec and McAfee have to beef up their products and will have a tougher time selling them at a premium, analysts said.
The introduction of OneCare heightened the battle for consumers' security dollars. There's a lot at stake. Last year, the worldwide market for consumer antivirus software reached $1.95 billion, up 17 percent year-over-year, according to research from Gartner. Symantec dominated the space, taking 70 percent of the pie.
So far,. The product held the No. 2 spot in sales of security suites at U.S. stores in June and July, the first two full months that it was available, according NPD data. OneCare is by far the cheapest option, with an average retail price of $34.02 in July, versus $60.93 for Symantec's security suite and $63.24 for McAfee's suite software.
"Microsoft is entering the market with a bang. They are significantly cheaper than their competitors and will gain market share," said Natalie Lambert, an analyst with Forrester Research. "It will bring down pricing, no doubt, and Microsoft has also caused companies such as McAfee to offer multiple tiers of protection."
Microsoft is not always successful when it enters new markets. Intuit, for example, still leads in small-business accounting, a market Microsoft entered last September with its Small Business Accounting Software 2006. However, Microsoft should be taken seriously in security, Swenson said. "I think they got the mix right," he said.
|List retail price|
|Windows Live OneCare||$49.95 for up to three PCs per year|
|Symantec Norton Internet Security Suite||$69.99 (single PC)/$119.99 (three PCs)*|
|McAfee Internet Security Suite||$69.99 (single PC)/ $89.99 (three PCs)*|
*McAfee updated its products in August; it previously charged $139.99 for three PCs.
Sources: Company Web sites
Microsoft's security focus
Often chided for the lack of security in its products, Microsoft has been working for nearly five years . The company has made several and with OneCare is now selling a product to secure Windows PCs, an area it .
OneCarein late May . The product combines antivirus, anti-spyware and firewall software with backup features and several tune-up tools for Windows PCs.
In the wake of OneCare's announcement, Symantec and McAfee are both bundling more functionality than ever into their products to make them more appealing.
McAfee earlier this monthand for the first time included a safe Web search feature, a firewall, and PC maintenance tools in VirusScan Plus, its most basic variant, with a list price of $39.99.