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  • Free Software and Freaking the Industry

    October 24th, 2013

    So the cultural meme has it that Apple products are notoriously overpriced, and you can do far better if you go elsewhere. That scene has played itself out for years, and even though Apple remains extremely profitable, the demands for cheaper prices just won’t stop.

    At the same time industry analysts state that Apple must make things cheaper, they also demand that there be high profits. This contradiction manifests itself with other companies selling lots of stuff for little profit, but some of them, such as Amazon, remain Wall Street darlings. Amazon continues, year after year, to show a slight profit or a slight loss. Maybe some day profits will be more consistent and higher, but probably not in this century.

    Now most of you know that the vast majority of revenue Apple earns comes from selling hardware, not from software. Compare that to Microsoft, which, after losing lots of money on the Xbox gaming console, is making some profits from the product, and is making none from the Surface tablet. Microsoft’s revenue mostly comes from Windows and Office.

    For better or worse, Apple’s OS X and the iWork office suite are compared to the Microsoft equivalents. Microsoft desperately wants to get into Apple’s game by selling hardware. So what does Apple do in response? Well, OS X Mavericks was released on Tuesday, and it’s free. After four years, the long-awaited iWork upgrade was released, and it’s free to people buying new Macs or who already have a copy of an older version; well, at least iWork 09, which is what I had before the free upgrade appeared in the App Store.

    This move comes at a time when the PC industry remains under serious pressure. Just keeping even with the previous year’s sales is difficult, and many PC makers are seeing reduced sales. Apple isn’t immune from industry trends, and it’s expected that sales for the September quarter will be flat or slightly depressed. The age of the PC is ending as more and more people rely on tablets and smartphones to perform many computing functions.

    Microsoft understands the problem, but can’t quite figure out a solution. To them, the Surface tablet, which essentially merges a tablet with a note-book computer, is the correct response. The market doesn’t agree. One Microsoft executive has, predictably dismissed iWork as “watered down,” but it’s clear the company was stung by Apple’s decision.

    By making Mavericks, iWork and iLife free, Apple has made it easy for any recent Mac user to get with the program and stay up to date, assuming incompatible apps leave them with an older OS. Within the first 24 hours of release, one published report claims some 7% of the Mac user base upgraded. More and more Mavericks-savvy apps are arriving, so it makes sense.

    Meantime Mavericks may look mostly the same as its predecessor, OS X Mountain Lion, but Apple has made some smart moves to make it more efficient. An Ars Technica story reported that battery life had increased up to 30% according to one benchmark. Apple boasts up to a one hour improvement on a 2013 MacBook Air. By using memory compression — reminiscent of RAM Doubler, a 1990’s Mac utility — Apple claims that a 4GB Mac can get 6GB of performance. Memory chip suppliers should take notice.

    My close encounters with Mavericks have been mostly trouble free. I have run into some very small issues with a few apps, but they will no doubt be fixed before long. I have not checked whether battery life has improved any on my 2010 17-inch MacBook Pro, but I do notice that system load seems lower on a late 2009 iMac. Performance is as good as it’s ever been.

    When you factor in the Finder tabs, improved multiple monitor support, and all the other goodies, Mavericks is a terrific and full-featured upgrade. And it’s free besides, just as I have been predicting in recent months.

    I also gave the new iWork a brief run. I use Pages frequently, and I’m pleased to report that much of the sluggishness of the previous version is gone. Launches are near instantaneous, and documents also load quickly. This is a promising upgrade, particularly if it remains decently compatible with Microsoft Office. Microsoft has to be seriously concerned, since the iOS version of Office is still missing in action, as is news of the next version of Office for the Mac. They wait too long, the market may vanish except for the business world.

    Now some tech pundits seem to believe that Apple is doing something brand new by making Mavericks free. Not so. Those of you who remember the early years of the Mac know full well that OS upgrades were not only free to download, but were freely and legally copied by anyone with disk media at hand. But it’s a smart move nonetheless. It should have happened a long time ago.

    As for Microsoft, it’s not as if Windows or Office can be made free unless, by some miracle, hardware sales suddenly take over. But don’t expect that to happen in our lifetimes. To add insult to injury, Apple also cut the price of the new MacBook Pros with Retina display by $200. Yes, they are still not cheap, but are far more competitive against the competition. May sales soar.



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    One Response to “Free Software and Freaking the Industry”

    1. Amazon’s profits have dried up.

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