Why Apple Offers Free Software

Scott Francis
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I’ve seen a lot of writing about Apple’s decision to make Mavericks, iWork (Pages, Numbers, Keynote), and iLife (iPhoto, iMovie, GarageBand, etc.) free.  For example, in this piece, the focus is on (a) how nice the upgrade looks, syncing the various pieces, and comparing to Android and Windows (competition as a motive):

OS X upgrade is free. Updated apps like Garageband, Pages, Keynote, Numbers and many more Apple suite products are now free. And many of the apps look and act exactly the same and are synched in the iCloud identically so that users can’t even tell if they are using a Mac app or a IOS app unless they look down and see what device their are using. All of these push Apple’s software prowess into the forefront and give them an even greater edge over Android and Windows 8.1 especially when it comes to tablets. Don’t underestimate how important the software announcements made today are to Apple’s over competitive position. This is a big deal for them and their competitors.

 

And in this Daring Fireball article, the focus is more on bean-counting:

My understanding is that it’s been a long slog to get here — here being where these apps and all OS updates are available free of charge — the details of said slog being the sort of convoluted bean-counting that would put anyone who doesn’t wear a green eyeshade to sleep.

But he also hits closer to what I think is the real reason, providing the foundational thoughts here (emphasis added):

At yesterday’s event Tim Cook claimed 64 percent of iOS devices are already running iOS 7. How best to make Mac OS X’s running-the-latest-version number more like that of iOS? By making it free.

But then he turns to competition and pressure on Microsoft.  That may be a side effect, but I don’t think it is the “why” in what Apple did here:

This puts Microsoft in a tight spot. Apple gives away software for free in exchange for your buying their hardware. This is not charity. It’s also in marked contrast to Google, who gives away software for free in exchange for selling your attention (and personal information) to advertisers. Apple and Google are squeezing Microsoft from both sides, and the result is that less and less perceived value in the industry resides solely in software.

But I think John Lilly hits it closest to the mark:

…Apple’s marketing event the next day, where Apple notably reduced the pricing of OS X Mavericks, iLife and iWork to effectively zero.

Lots of gnashing of teeth, pontificating, blogging about it. Lots of misunderstanding, too. […. ]

Right, we’re on the same topic… (emphasis added)

Sometimes people call Apple a hardware company, but that’s not quite right. Others have said they’re a software company, pointing out that it’s the quality of the software experience that really sets them apart, but that’s not quite right either. Having watched Apple for nearly 30 years now, and having worked at 1 Infinite Loop, I really think they think of themselves as a personal computing systems company and always have.

Okay… and as a systems company:

Pretty easy to see, in your mind’s eye, Apple taking care of their systems business, their cup of water — and thinking that getting people on the most modern versions of their software both increases the quality of the systems they sell and sort of pushes on Microsoft’s software-oriented cup of water.

Or to bring it back to Apple’s view of the system and the customer– some of the big improvements this time around are in the interactions between multiple personal Apple-branded computing systems and Apple-enabled-online-services… 

  • The devices are both iOS and OSX based.  Which is why it isn’t good enough to have high adoption on just the iOS devices. Apple needed to goose the upgrade rate on Mavericks, so that owners of both Macs and iPhones will have the foundational software to create systems that work well together for you, the customer. To point out a few points of integration you might overlook – setting calendar appointments complete with location information now makes sense in iOS (with iOS maps) and in OSX (with its own Maps application) – and the reminders can take into account drive time to warn you of an appointment.  That integration of location awareness between iPhone and Macbook does not happen if the Mac doesn’t upgrade to OSX Mavericks… So it’s free.
  • The iOS and OSX-based versions of iWork apps were aligned in form and function.  And more seamlessly connected to online services for collaboration, sharing, and “seamless” storage. Again, driving the need for these apps to be upgraded on not just one or the other type of device- but on both devices, nearly simultaneously.
  • The iOS and OSX-based versions of iLife apps were aligned in form/function. And more seamlessly connected to important services, including iTunes Radio.  Again, creating impetus for upgrading both types of devices at once to make sure that they can both access these upgraded services seamlessly – which drives adoption of the new services like iTunes Radio, and also drives more lock-in to the use of great personal productivity tools like iMovie and iPhoto.

Imagine if they weren’t free. How many Apple customers might only update iOS, and then complain about how badly their iWorks docs integrate with OSX?  How many more support tickets and complaints on twitter.  How many fewer photos uploaded on iPhoto?  How many fewer Pages documents shared with others? How many OSX users confused about how to access cloud services?   How many fewer maps or driving routes shared between OSX and iOS devices?

The level of interdependency of benefit in the Apple ecosystem has never been higher.  It was no longer acceptable to let price of software upgrade act as a hindrance to having all the devices on a current, modern, up-to-date version of software. Apple has a bigger prize in mind than your $29 for Mac OSX.  Apple wants your devices to play so well together that you won’t want to break the chain.  And they’re getting really close to achieving that level of complementary service.

I don’t think Apple is worried about the competitive aspect, culturally. They’re worried about negative press when their services don’t play well together (different versions). They’re worried about making sure their most loyal multi-Apple-device-owning customers are getting a great value offering when they upgrade 3 or 4 devices.   Free.

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  • Just used maps on my laptop – rather than google maps in the browser – and then sent the map to my phone. The free upgrade makes so much sense- increasing the value of the whole system to me as a user. And will I want to buy a laptop next time that doesn’t have a built-in map app that integrates with my phone and ipad? Maybe. Maybe not.