Why did Apple make Mavericks and iLife free?

Yesterday’s Apple event was interesting for a number of reasons – and not just because they unveiled the iPad Air and new iPad Mini. It seems they’ve decided to use all of those spare billions in the bank to take on Microsoft in a big way.

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Apple CEO Tim Cook’s presentation was littered with digs at MS throughout – at the start slagging off the hybrid laptop/tablet Surface (though never mentioning it by name), and later referring to people who are “stuck on PCs”. This was only the rhetoric though – the announcements were the substance.

In the eternal fight between the two software giants, however shiny Apple’s latest device was, Microsoft have always had something they can rely on: Boring old Windows and Boring Old Microsoft Office. These are Microsoft’s cash cows – and Tim Cook seems to have a beef with them.

These cash cows are important to Microsoft because they’re reliable. No matter how badly they misjudge, say, the Xbox One or the tablet market, it’s not game over as there’s always going to be a reliable income stream from PC manufacturers wanting to run Windows (essentially the only game in town if you’re not using Apple hardware). Similarly, there will always be a queue of besuited business drones ready and waiting to buy the latest upgrade to Microsoft Office. And there’s no danger of these revenue streams going away… right? Umm…

Last night Apple announced that their new operating system, Maverick, as well as their Office-equivalent iLife apps are going to be completely free. By comparison, Windows 8 will currently set you back around £70, and Microsoft Office starts from around £100.

There’s a number of benefits of doing this for Apple. One thing Apple have learned is a huge benefit in mobile is preventing OS fragmentation – with users all running a large number of different (older) versions. On mobile, because upgrading to iOS7 is so easy they’ve managed to convert 64% of iOS users in only a few weeks (compare to mobile rival Android – how many are running the latest version? How many are still running the really old version?).

This is useful because not only does it make development easier, but also means users will have a more consistent experience between devices (and conveniently, Maverick users will all have the Mac app store front and centre to download and buy software). By releasing a free Mac OS update they could do the same thing for laptops and desktops – now existing Mac users have no real reason not to update.

By comparison, Windows is a bit of a mess – with a large proportion of users still running Windows 7, Windows XP or – god help them – Windows Vista.

Esoteric technical considerations aside though – it also sets down a massive challenge to Microsoft to match what they’re doing. Are Dell and other manufacturers going to be happy paying big money for Windows when the rival operating system is free? Will Microsoft take the bait and cut off one of their biggest revenue streams?

Similarly, on the Office front business users will now be able to look at a cheaper alternative – with free cloud support too for document collaboration and the like. That’s got to make switching seem pretty tempting – even if MS Office is fairly grandfathered into business processes by this point.

So what will it mean if Apple can put a dent into Microsoft’s revenues? Well – they won’t be able to do as much and will be able to compete less effectively. It’s going after the opposing army’s supply lines.

Don’t get me wrong – Microsoft aren’t going anywhere any time soon, but this is going to reshape the dynamics of the battlefield. Things just got interesting on desktops again.

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About the Author

James O'Malley

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James is the Editor of TechDigest. You can follow him on Twitter @Psythor.





James O'MalleyWhy did Apple make Mavericks and iLife free?
  • Jez Lister

    You make some interesting points about Apple giving away things for free and that this will impact Microsoft. I am not too sure about that. The price differential between the PC and Mac still outweighs the price of Office. Anyway, I think the main competition is now from Google which has been giving away Apps (Drive) for some time and is fast becoming the biggest threat to both Microsoft and Apple. You only have to look at the Chromebook. For 90% of home users, this is probably all they need and all for £200 (all in!).

    • fteoOpty648

      For Mavericks, it is NOT a major update that warrants a cost compared to Mountain Lion update from the previous version. Asking $20 for the update or even $10 will cause a lot of disappointment that Apple do not really want to deal with since the new Haswell laptops are just a minor upgrade as well.For iLife, they know that the asking prices only had that limited number of users. A lot of people are using free tools like Google Docs and other free alternative many are just as good or better. Hence, giving iLife away especially with newer iPad releases will help the iPad much much more than Macs. People with Macs are using Office if they had some serious desktop apps that require PowerPoint and Excel. Word has plenty of replacements but PowerPoint is pervasive while Excel is powerful in its own right. iLife can help to see Macs and iPads with increasing competition on the tablet side while Win8 PCs still struggles for relevance ….

  • Jez Lister

    You make some interesting points about Apple giving away things for free and that this will impact Microsoft. I am not too sure about that. The price differential between the PC and Mac still outweighs the price of Office. Anyway, I think the main competition is now from Google which has been giving away Apps (Drive) for some time and is fast becoming the biggest threat to both Microsoft and Apple. You only have to look at the Chromebook. For 90% of home users, this is probably all they need and all for £200 (all in!).

    • fteoOpty648

      For Mavericks, it is NOT a major update that warrants a cost compared to Mountain Lion update from the previous version. Asking $20 for the update or even $10 will cause a lot of disappointment that Apple do not really want to deal with since the new Haswell laptops are just a minor upgrade as well.
      For iLife, they know that the asking prices only had that limited number of users. A lot of people are using free tools like Google Docs and other free alternative many are just as good or better. Hence, giving iLife away especially with newer iPad releases will help the iPad much much more than Macs. People with Macs are using Office if they had some serious desktop apps that require PowerPoint and Excel. Word has plenty of replacements but PowerPoint is pervasive while Excel is powerful in its own right. iLife can help to see Macs and iPads with increasing competition on the tablet side while Win8 PCs still struggles for relevance ….