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Thomas Claburn
Thomas Claburn
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Apple Embraces Free: 5 Reasons Why

Apple challenges Google and Microsoft with free software.

Better still, through the iTunes App Store and the Mac App Store, Apple managed to decouple software from devices by linking apps to Apple IDs. A few years ago, Apple urged Windows users to switch to the Mac. And back then, you really did have to switch, abandoning your PC to start afresh with a new Mac. Things are different now. You may be able to get rid of your Mac, but you remain an Apple customer through your Apple ID. All your software remains, waiting for you. The cloud runs on the "Hotel California" business model: You can check out any time you like. But you can never leave.

Apple, of course, is a hardware company, too. But hardware is a hard way to make recurring revenue. Device owners may keep using their gear for years without paying again. And there's no guarantee that consumers will continue to replace their phones or tablets as frequently as they have been. Subscriptions, advertising and collected data promise predictable revenue to complement Apple's cut of app sales. Being a forward-looking company, Apple is focusing on the cloud as the way to connect its customers to the tech industry's next big thing: wearable devices.

4. Apple Isn't Giving Up On Ads

Competing against Google means being in the ad business. Apple is in the advertising business, but hasn't been doing particularly well. Part of the problem was that when iAds launched in 2010, then-CEO Steve Jobs wanted iAds to carry ads as well-crafted as Apple's products. Apple sought large advertisers that could commit large sums to fulfill its minimum buy-in. The strategy didn't work and iAds has frequently been described as a failure.

Of course, Silicon Valley loves to characterize failure as a stepping stone to success, mainly because it's a great way to convince investors to keep their wallets and purses open. But for Apple, with more cash than it knows what to do with, there's also some truth to the saying. The company took another stab at advertising in June with the launch of iAds Workbench. The price of admission for this new form of iAds is $50 instead of $500,000. If Apple can figure out how to offer advertising for free, then Google will really need to worry.

5. Apple Smells Blood

As strong as Google may be at the moment, Microsoft is weak. It's looking for a new CEO who can do what Steve Ballmer could not. About the best thing that can be said of its mobile effort is that it's doing better than BlackBerry and Nokia. Gorged on profits from Windows and Office, Microsoft became complacent and is now scrambling to remake itself in the image of Apple, the company it once saved with a $150 million investment and a promise to keep making Office for the Mac.

Rather than returning the favor, Apple senior VP of software engineering Craig Federighi on Tuesday declared, "The days of spending hundreds of dollars to get the most out of your computer are gone." On the projection screen behind him, the image of Microsoft Windows 8 Pro, priced at $199, shattered into pieces.

Microsoft's business customers won't abandon Windows and Office overnight. But with Office still not available on Apple's iPad, more and more business customers sold on the iPad will settle for Apple's iWork apps, Pages, Numbers and Keynote, and perhaps even come to prefer it. The price, after all, is right. And these are customers Google covets -- business professionals accustomed to paying for technology.

Apple may be sold on free, but rest assured, someone's going to pay.

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User Rank: Ninja
11/4/2013 | 5:10:07 PM
re: Apple Embraces Free: 5 Reasons Why

free means you can take the OS and install it on any x86_64 hardware

[Citation Needed]

It's free - it costs the user nothing to upgrade. I'm very interested to see two comments here saying that "free" must mean that it works on any x86 hardware they have lying around; why does that have to be a condition of being free?

There's a separate question here which is whether, given that OS/X only runs on Apple's hardware, the OS upgrades should have been zero cost all along. I have a vague memory that this was Sun's model back in the day - Solaris at one point only ran on their Sparc hardware, so they didn't bother much with licensing as you had to buy their hardware to use it, and that's where they made the money.
User Rank: Ninja
10/28/2013 | 2:08:05 AM
re: Apple Embraces Free: 5 Reasons Why
I wish Microsoft will follow suit with Windows and Office, like they already do in China (insert a sarcasm symbol here).
Seriously, they could try to do that with Windows 8.2 or the next version name is gonna be.
I will update immediately. Perhaps I won't be in the minority.
User Rank: Apprentice
10/27/2013 | 5:51:46 AM
re: Apple Embraces Free: 5 Reasons Why
So GǪ I went to the Cadillac dealership for their new, improved fuel injection system. Put it on my car but it just wouldn't run. I went back and COMPLAINED GǪ "Hey why won't your new fuel injection system work on my 1996 Dodge? It IS a CAR!!
User Rank: Ninja
10/27/2013 | 12:48:30 AM
re: Apple Embraces Free: 5 Reasons Why
Stop calling this upgrade 'free'. It only works on specific Intel processors and quite a few features only work on Apple hardware. Yes, there is no charge, but free means you can take the OS and install it on any x86_64 hardware - no such thing. And after paying already exorbitant prices for 'Apple' hardware that costs a small fraction when bought off the shelf the least they can do is throw in an OS upgrade without charge.

There is not much money made for Apply by selling OS upgrades, but there is a huge savings in getting people off old versions.It is much cheaper for Apple to give updates away and cut support periods. Rather focusing on supporting various versions it may get reduced to the current one and the last one, nothing else.
Apple in the business to make money and everything they do (as most other companies) is purely for maximizing profits. One way is asking insane prices - and Apple already does that - and the other way is cutting expenses. Of course, it also helps that naive and gullible journalists write that "Mavericks is free" although it is far from it!!
User Rank: Ninja
10/26/2013 | 6:53:16 PM
re: Apple Embraces Free: 5 Reasons Why
The thing is that Apple is a hardware vendor, so it doesn't need to rely on the upgrade cycle to make money in the way MS does. Thus, it may well be that it will save more money in tech support by offering free system upgrades than it will lose by giving them away.

But what Apple appears to be contemplating is definitely not free software as Richard Stallman would define it.
D. Henschen
D. Henschen,
User Rank: Author
10/25/2013 | 6:58:51 PM
re: Apple Embraces Free: 5 Reasons Why
Hopefully they've improved on iWork. I paid for it three or four years ago when I replaced a Windows PC with a Macbook Pro, but I didn't find it to be very easy or intuitive. For example, the word processing app didn't default to 8.5 x 11 page format, and when you started typing up a document, the default font setting was impossibly small. You had to learn how to format a document and its properties before you be productive. I'm sure they fixed all that ages ago, but it was Apple's chance to get me off Word four years ago.

I had the same too-much-to-learn experience with Open Office. I'm sure in both cases I would have quickly picked up on the new norms had I stuck with it, but my company made it too easy to use the Office Suite on my work laptop and my wife, who is a teacher, was constantly having to deal with Office documents submitted by students. Personally and professionally it was a non-starter.
Ramon S
Ramon S,
User Rank: Apprentice
10/25/2013 | 11:48:04 AM
re: Apple Embraces Free: 5 Reasons Why
Free is quite a stretch because OS X 10.9 apparently only works on Apple hardware or as virtual machine on systems that must have an Intel processor. When I think free then I expect to take any x86_64 UEFI compatible system and at least install 10.9 on it. I can understand some peripheral hardware to not work due to lack of drivers, but at least the OS should boot.
That said, as long as OS X is tied to Apple hardware there is really nothing free about it and charging for a dot release is just bad business. At least Apple got that straightened out.
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