The author doesn't understand Apple. Apple doesn't view software and hardware separately. Coincidentally, I just wrote about this, but I'll copy and paste here because it seems relevant.<p>A friend of mine recently asked me how Apple expected to continue making any money while giving away software that Microsoft charges $200 for. Understanding how Apple can give away their software and still make money comes in understanding Apple's business. Apple pundits frequently circle back to the point that Apple is a “hardware” company. As it turns out, they are wrong. Apple is a “devices” company. What is unique about Apple is their view that a device is made up of hardware & software, and that these two are inseparable. Apple believes this is the best view if you want to deliver a superior experience to the users of your products.<p>If you look at Apple as a hardware company — which I believe is a mistake — they make better margins than any of their competitors. Following that flawed line of thinking, what they're doing now is using that extra profit to subsidize the software side. This viewpoint only holds if you view the hardware and software sides of the business as separate entities though.<p>Apple has combined the two. You're not buying hardware or software, you're buying a device. What good is a microwave without the software that connects the buttons to the timer, microwave generator, etc? Thats how Apple views their devices. By making Mavericks and iWork free, theyre expanding their notion of the "post PC world". They're not just talking about iOS devices, theyre talking about their entire line up.<p>If youre wondering why Apples “PC” sales continue to grow while everyone else is sinking, I think youve found your answer.<p><a href="http://www.bradlanders.com/2013/10/23/apples-greater-vision-of-the-post-pc-world/" rel="nofollow">http://www.bradlanders.com/2013/10/23/apples-greater-vision-...</a>
I think this guy completely misses the most important point. Apple sees how much fragmentation hurts Windows and Android and they want to avoid it.<p>Imagine if as a developer you only have to worry about a single platform? Imagine if as a distributor you only have to worry about releasing a single package? It makes things much easier for everyone and allows efforts to be on quality rather than compatibility.
> By going free, Apple has acknowledged something that’s been true in the industry for years: Software is a means to sell hardware.<p>What? How has this <i>"been true in the industry for years"</i>? Maybe its true for smart phones & tablets, that too for just the OS, but how does he go from there to all software and all hardware?
Disagree. It's about selling apps, not hardware.<p>What holds Apple back is user OS adoption. With iOS updates being free, users can get the latest apps, and Apple doesn't need to worry too much about backwards compatibility.
OS X didn't have that luxury until today. With the free play, Apple is giving their customers zero reason to stay on older versions. They want to see 90 percent adoption rates in 6 months.
Why?
The App Store ecosystem. The more users on the App Store, the more developers will build apps, the more revenue it will generate for both.
The fragmentation issue in Mac OS X [1] is the hurdle that has been holding me off from writing apps for Macs. According to [1] (published about half a year ago), the Mac OS X market share breakdown:<p>26.8% Mountain Lion 10.8<p>28.0% Lion 10.7<p>35.1% Snow Leopard 10.6<p>10.0% Leopard 10.5 and Tiger 10.4<p>If we assume that half of the macs running Snow Leopard (10.6) are pre-2007 and ineligible for 10.9, we have about 72.3% macs that can upgrade to the free Mavericks, which is great news for Mac App developers.<p>[1] <a href="http://www.zdnet.com/ad-network-os-x-is-becoming-fragmented-7000013426/" rel="nofollow">http://www.zdnet.com/ad-network-os-x-is-becoming-fragmented-...</a>
The real reason is the fear of fragmentation- This becomes more and more critical for mobile and personal devices.
Utility Software updates in future will be seamless(transaction free)
I think with Apple, you kind of need to consider their aesthetic. I don't think they like selling anything cheaply. The last few OS upgrades were cheap. iWork is cheaper than MS Office (because it is often an optional extra with office being mandatory) and (ironically) being in the iOS market means that they have an €8.99 version of iWork anchoring he price. Overall software sales are not big money makers for Apple.<p>OTOH, you they can simplify a bunch of things by making OSX upgrades cheaper. Users no longer need to worry about OS updates (eg time their purchase). They can sell macs as "ready to go with all the software you need" for creative or office workers. A new mac will be easier to get used to. Developers can target a single OS version, this includes Apple. Apple can release features relying on new OS features.<p>It's just simpler. Apple have an aesthetic preference for simpler. For the cost of whatever revenue these software sales were bringing in they get to improve and simplify the mac ownership experience. They get to differentiate themselves from PCs in one more difficult to quantify way. This is another thing they like. You don't have to buy antivirus & Office or worry about Windows upgrades.<p>Financially it's probably a wash. Slightly better mac sales or increased pricing power will more or less make up for lost revenue.
It's also a response to google docs. Introducing collaboration on iWork is a good first step to address to the shift towards shared docs. I imagine we'll see that expand significantly in the future.
From the title, it almost sounds as if their software is going to be free software. Just giving out proprietary software without charge doesn't make them free (free as in freedom for users).
Apple hasn't been charging for iOS or the software that ran the first iPod. It's included in the cost of the device, just like the cost of the embedded code in your Keurig is factored into the overall cost of the device.<p>Software isn't where Apple makes their money. It never was. They NEED software to make their hardware do anything but that's all they ever should have considered. The many years of rivalry with other OS makers was stupid and costly. They weren't really in competition.<p>You get a free copy of OSX with every Apple computer but charging for OSX upgrades only makes the job of keeping all that hardware running smoothly more difficult. It generates avoidable support calls and support is a huge cost.<p>If the software (they have to write anyway) is free and hundreds (or thousands) of bug fixes are always just a free download away then everyone benefits. Apple can stop focusing on feature parity with other operating systems and focus on what makes their devices better for their users.
At today's Apple, both software and hardware are means to sell 3rd party software. They earn so much on their ecosystem that it's more profitable to give OS updates for free and provide more unified and less fragmented ecosystem to both users and 3rd party developers.<p>Lowering prices for next generations of their hardware is also a sign that they really want to put their foot in as many users' doors as possible. I think they rarely lowered hardware prices just couple years ago, before they had this massive revenue stream called App Store.
Man, this brings back memories of MacOS 7.x, the last versions that could be downloaded free of charge. Only 20 years later, it again costs nothing. Nice.
Apple doesn't want all software to be free. They want all the devices on the same platform to then have ALL the apps available to them. That 30% cut is a much bigger piece of pie than selling a $30 OS