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  • Another Look at the 10.6 Value Equation

    July 2nd, 2008

    Since I wrote my first article suggesting whether Apple should just give away Snow Leopard or make it a low-cost upgrade, many of you have written some cogent comments on the subject. You see value in what Apple is doing to improve Mac OS X, even if there aren’t a lot of surface changes or enhancements.

    Indeed, I’m sure Apple is probably spending as much in developing 10.6 as they’d routinely invest in a standard feature upgrade, and some of its new capabilities may be far more meaningful in the areas where it counts, and that’s being able to get your work done faster, with greater stability.

    Besides, with Mac OS X taking up more and more gigabytes of storage space, it would be real nice to save some of that and use it for other purposes. If you have a MacBook Air, for example, you have to watch what you’re doing as the hard drive can fill up real fast. In fact, one of the reasons my son didn’t consider one as a graduation gift was the storage constraint. His original note-book, a PowerBook G4, suffered through 80GB and he had to work hard to archive old files on a fairly frequent basis.

    Then again, even if Apple manages to save a gigabyte or two, that won’t be a significant issue, unless your MacBook Air has the solid state drive, which currently tops out at 64GB.

    More important is the promise of superior performance. Although Mac OS X has gotten faster over time, the performance differences among the last three releases haven’t been significant. Some of you feel Leopard is actually slower in some respects, though that’s not been my experience. Maybe on a PowerPC Mac, but that’s becoming yesterday’s news faster than you might have expected.

    However, even though I only went all Intel this year, I don’t think Apple is going to suffer severely if they truly ditch the PowerPC with Snow Leopard. Understand, though, that even if the reports about the system requirements of the developer preview are true, that doesn’t mean Apple isn’t going to roll in PowerPC code between now and 10.6’s release date.

    But I doubt it. This no advantage in spending extra millions to incorporate support for an older processor platform that can scarcely benefit from Snow Leopard’s enhancements. Not a lot of multiprocessor Macs were sold in those days, and the only dual-core G5’s arrived real late in the game. The numbers just aren’t significant, and the people who bought those G5 workstations will probably move to Mac Pros by this time next year, assuming they even do the sort of work that benefits from multicore processors.

    Besides, just because Apple will deliver the tools to allow developers to build faster apps doesn’t mean you’ll much action right away. Indeed, one set of software that would benefit greatly, Adobe’s Creative Suite, will hit its CS4 cycle way before Snow Leopard is released, so you’d have to wait until CS5 or later to benefit. That assumes, of course, that Apple will make it easy for programmers to harness these extra features and that stuff that depends on standard Mac OS X functionality will benefit automatically.

    The same holds true for OpenCL, the emerging standard that will hand off some processor-intensive tasks to the graphic chips, to allow them to crunch the ones and zeros a whole lot faster.

    In short, Snow Leopard is, in large part, a harbinger of the future. As more and more Mac users have it installed, the developer community will be more inclined to update their products accordingly. Unless the release date coincides with a publisher’s own release cycle, the key benefits may still be months or years away.

    That assumes, naturally, that Snow Leopard will arrive in the middle of 2009, and not a few months later. Indeed, Apple is being especially vague about the release, saying it’s “scheduled to ship in about a year.” So if it takes a few more months, Apple’s reputation won’t be seriously injured. It’s not as if the delay in the original release of Leopard — ostensibly to finish iPhone development — hurt Apple’s sales much. In fact, the conventional wisdom is that there was no impact whatever. People still bought Macs in droves.

    When it comes to the Snow Leopard upgrade policy, commentator Daniel Eran Dilger had it right in his blog in a recent commentary. You see, Apple’s main business is selling hardware. So even if a lot of you don’t buy 10.6 upgrade kits right away, it’ll be rolled into newer generations of Macs and millions of you will be using it before long. Even then, the lure of a new Mac OS would surely be sufficient to encourage some of you to pay full price even if the upgrade doesn’t have a whole lot of fancy new features.

    Personally, I still think Apple has to cope with user psychology. For years, new versions of software that exacted a full upgrade price contained new features to justify the purchase price. While the work Apple is doing admittedly carries equal or better value, I expect many people won’t agree.

    If Apple were to provide Snow Leopard free, almost free, or for a modest purchase price, say $59 or $79. it wouldn’t diminish the Mac OS value equation. Apple would simply deliver the appropriate spin, claiming it is their gift to millions of loyal customers who have embraced the Mac platform over the years. And they’ll still make a bundle regardless.



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    14 Responses to “Another Look at the 10.6 Value Equation”

    1. mcloki says:

      It’s just an OS upgrade. The last upgrade to Leopard was nice but not every Mac user needed to upgrade to it. The same goes for Snow Leopard. I don’t think that Snow Leopard will sell a lot of copies, but it will sell a lot of hardware. And I will wait to buy my next Mac until Snow Leopard is pre-installed. This may hurt Mac sales slightly with the informed Mac crowd, but Apple is now going mainstream and it shouldn’t hurt sales that much. And knowing Apple, there will be a “one more thing” in Snow Leopard announced late.

    2. Danno Bonano says:

      I disagree. Snow Leopard will be huge in the enterprise. Now there is a desktop alternative to MS that can connect and interact with Exchange. As well, if people gain significant stability and performance boost AND new apps and things like games run slicker and faster on the desktop, people will buck up for the upgrade.

      However, I believe their should be a differentiation between OS cost ($129) and upgrade cost ($59 for example). I believe (because Apple CHOSE to call the new OS Snow Leopard) that by retaining ‘Leopard’ as part of the OS name, it will be cheaper to upgrade although the cost for a new copy of the OS would remain unchanged. I am pretty sure this is what Gene is getting at. Upgrade price should be cheaper but if it isn’t an upgrade it would remain the same current FULL price.

    3. Win39 says:

      Am I missing something? We know what Apple is going to put in an operating system upgrade a year from now? From the company that said that they would not reveal Leopard features ahead of time so that MS would not copy them? The idea that Apple would essentially completely rewrite the operating system without provide a couple of apps that demonstrate why the new OS is so cool seems inconceivable to me.

    4. Dana Sutton says:

      When you come to the assessing the “value equation” of Snow Leopard, i. e. what it’s worth to you, how much you are or aren’t willing to pay for it, here’s one possible way of measuring the value. Look at the speed of the Mac you have now. Find out how much faster it will run under Snow Leopard. Let’s say that turns out to be 8%. Okay, look at the other Macs currently on the market and ask yourself how much money it would cost you to replace your present Mac with one that runs 8% faster. I bet that would turn out to be whole lot more money than Snow Leopard is going to cost.

    5. Joe says:

      “However, I believe their should be a differentiation between OS cost ($129) and upgrade cost ($59 for example)”

      Actually, $129 IS the upgrade cost for previous versions of the OS. Since every Mac ever sold came with Mac OS and since you require a Mac to legally run Mac OS, then the retail boxes of Mac OS X are upgrades.

      I don’t mind the $129 upgrade price, but I wouldn’t mind a $999 full version that you could run on any hardware – but with no support since Apple can’t control the hardware. At least that would shut up the “Apple should sell its OS separately” crowd.

    6. Danno Bonano says:

      “Actually, $129 IS the upgrade cost for previous versions of the OS”

      You completely miss my point Joe. The FULL price of the current OS is $129. There is NO upgrade discount. What I am saying is that because Leopard is in the name of the new OS “Snow Leopard” and it is mostly the underlying functionality being changed, it would be great to have an Upgrade cost of $59 for existing Leopard users and $129 cost if people need to buy the full OS.

      I am saying there SHOULD be differentiation. Not sure you actually read my comment in full before you commented.

      As for the $999? I just don’t get that at all. Apple should not let the OS run on any piece of hardware or they would need to support millions of drivers and configurations (whether you say they would offer no support or not) and be in the same boat as Windows. The current way ensures a seamless user experience by controlling the hardware and the software.

    7. Joe says:

      “The FULL price of the current OS is $129.” WRONG. There IS NO FULL PRICE FOR MAC OS X. The full price is what you pay for something when you don’t have a previous version. The upgrade price is what you pay when there IS a previous version. By definition, every time you buy Mac OS X in a store for $129, it is an upgrade version – since you already purchased a previous version with your Mac. (funny that you’re accusing me of not reading when I already explained that and you ignored it).

      Care to prove me wrong? Show me somewhere you can buy Mac OS X for ‘full price’, that is a full version that you can legally run on hardware which was not shipped with Mac OS. You can’t do it – it doesn’t exist.

      As for the $999 price, I don’t really care what the actual price is. My point was that they could offer it without support at some price that is high enough that no one would buy it, but if they do, Apple makes as much as they would have made by selling them a Mac. The point is that if they have a high retail price for the full OS, the “but Dell is $22.99 cheaper than the Mac” arguments would disappear. Once you add in the price of the superior OS, the price difference would be gone – so they might as well buy a Mac.

    8. Danno Bonano says:

      Joe, you are mentally a monkey. For one, you are very very weak on the $999 or whatever price. Ain’t gonna happen. Maybe a good idea to allow OS X to run on any hardware 20 years ago but absolutely daft now.

      As for your upgrade piece, I can see where you are splitting hairs. Pubic hairs mind you. Time to pick them outta your teeth.

    9. Joe says:

      Oh, look. You said ‘pubic’. Is that supposed to make you seem intelligent?

      The difference between upgrade and full price is not splitting hairs. It’s the essence of computer pricing. The fact that you can’t comprehend such a simple subject pretty well establishes why you’re not capable of contributing anything of substance to the conversation. Or, at least, nothing that anyone over the age of 12 thinks is worth while.

    10. Danno Bonano says:

      Joe, I am guessing you don’t have any hair to split. Well, except for the pubic hair in your teeth. Or was that public hair? Anyways, I love the fact that a mere 12 year old can cause you to stumble and stutter and get all flustered.

      “Joe: Mr. Bonano, you will probably die by the hangman’s noose
      or a vile disease.
      Danno Bonano: Sir, that depends upon whether I embrace your principles
      or your mistress.”

      Put that in your pipe and smoke it.

    11. Allex says:

      “As for the $999 price, I don’t really care what the actual price is. My point was that they could offer it without support at some price that is high enough that no one would buy it, but if they do, Apple makes as much as they would have made by selling them a Mac. The point is that if they have a high retail price for the full OS, the “but Dell is $22.99 cheaper than the Mac” arguments would disappear. Once you add in the price of the superior OS, the price difference would be gone – so they might as well buy a Mac.”

      Curious business model.

      Spend millions or billions to achieve compatibility with all hardware, in order not to sell it, to convince the uninitiated and hostile to purchase the now relatively affordable mac hardware in order to experience the nirvana of incredibly expensive and out-of-reach mac OS X computing experience.

      Perhaps we should price it at $500,000,000 so that Bill Gates can buy it to run on his dell and help finance the next mac revolution.

      Most people do not need that much effort to be persuaded that OS X is better. The rest is a lost cause in direct persuasion.

    12. Joe says:

      Billions? You’re dreaming.

      OS X already runs on a decent subset of PC hardware. Look at the Free OSX project. And if Apple did nothing more than leave the existing drivers in place, it would be enough that people building their own computers would be able to use it.

      As I said, I don’t think that very many people would do it, but the fact that they CAN’T is a major black eye for Apple in every article anyone publishes on the subject. So let them – and then they’ll see the value of hardware/software integration. And if they want to continue with their hobbyist machine, Apple takes home $1 K or whatever) which is probably more than they’ve have made from selling them a computer.

      I really don’t see the purpose in running OS X on generic hardware, but there’s a huge market who do. As long as Apple structures it in such a way as to make money and to not damage their own brand, let them.

    13. Dana Sutton says:

      “I really don’t see the purpose in running OS X on generic hardware, but there’s a huge market who do.” Well, there are probably a bunch of programmers and Web designers who prefer PC’s but who would like to be able to run OSX in virtualization mode for testing purposes.

    14. Viswakarma says:

      Can the Apple Macintosh Computer business value paradigm compared with the Microsoft Windows business paradigm? I doubt very much, since it is based on buying automobile components from various vendors and having your next-door automobile shop build a car for once specifications. The ideal comparison should be with IBM-AIX, Sun-Solaris and HP-UX based computers, where a single vendor takes the responsibility for the whole enchilada.

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