It has been as understated as anything is on an Apple launch day, but if you upgrade to OS X Mavericks you won’t have to pay a dime. The last time I did an OS X upgrade I had to pay $19. I am free of that shackle. Is this a shot across the bow of Microsoft or is it a reaction to Google’s Android?
Let’s get one thing straight, Apple is not going to lose any money giving away OS X. In the age of phones and tablets, no one pays for the OS, no one pays for the upgrade, and every app that gets sold on an Apple device pays a hefty tribute to Cupertino.
So, how come no fee for Mavericks?
Well, Apple probably has plenty of margin on its hardware sales that it can afford to build in the cost of the OS into each device and free sounds so much better and Android-y.
It’s not really fair to compare iOS or OS X and Android at the business level because, Apple is highly unlikely to put its OS software on any hardware it doesn’t build, own and sell through. And, consumers really don’t differentiate between an Apple iOS and an Apple device as they do in the Wintel world, or even with Android.
So, now, Apple has freed itself from the shackles of upgrade cycles, as it does on the mobile side of things, and as consumers, we are going to think of every subsequent OS X upgrade is a nice bonus that is being given to us by Apple for free!
Strategically, however, this move doesn’t seem to have much to offer Apple as a business. Apple is making 45-49% margin on its devices. Samsung is probably closer to 15-20%. Google and Amazon should, by all accounts, be losing money or breaking even on the Nexus and Kindle Fire. The situation gets worse for everyone else. So, giving away an OS, any OS, that is compulsory on your platform is not going to increase market share or drive more business.
It is great PR and marketing though.
Which brings us to Microsoft. The company looks positively anachronistic by comparison because it is still charging for Windows, mightily so, and MS Office is like a plant made of geese laying golden eggs around the clock. Microsoft is going to throw off cash but it is going to look increasingly irrelevant. How quickly that translates into eroding market share or a migration by its users is anybody’s guess.
Clearly the enterprise Microsoft customer is not going to shift or pivot any time soon. The enterprise is going to take years to move away from Windows and if history is any judge, it may never happen for some companies who are deeply vested and entrenched in Microsoft software.
Like I said, it doesn’t make that much of a difference as a big picture move. It’s just the right direction for Apple, and you can’t help think that Microsoft just lost more ground in some way.