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The desktop operating system is dead as a major profit center, and Apple just delivered the obituary.
Amid a slew of incremental improvements to its iPad tablets and MacBook laptops, Apple today announced some landmark news about its oldest surviving operating system: It will not charge for the latest big upgrade, Mac OS X 10.9 Mavericks, breaking from a tradition that goes back 16 years and shining a light on a long-unfolding reversal in how tech profits are made. Eighteen years ago, the tech industry’s dominant company made nearly half its revenue selling OS licenses. Now, as Apple just confirmed, the prices of OS licenses are headed towards zilch.
Prices of Apple’s Mac OS X have long been on the wane. After four releases that cost $129, Apple dropped the operating system’s upgrade price to $29 with 2009’s OS X 10.6 Snow Leopard, and then to $19 with last year’s OS X 10.8 Mountain Lion. Microsoft — the king of the operating system in the ’80s and ’90s and on into the aughts — still charges PC makers who sell the Windows OS preloaded on their desktop and laptop machines, but that business is shrinking, thanks in large part to the continued success of Apple. And just last week, Microsoft announced that, much like Apple, it would not charge consumers who upgrade their machines to the latest version of Windows, version 8.1.
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Via Chuck Sherwood, Former Senior Associate, TeleDimensions, Inc, Martin (Marty) Smith
Apple Pivots Toward A Free Future
This is a razor blade vs. razor issue now. By dropping a losing idea, that operating systems are profit centers, Apple aligns with where we are going - so much FREE stuff the concept of "Operating System" is much too old school.
I love my AIR, but about half the time it is connected to some FREE web service or another (Google Docs, Dropbox, Google Drive) so the idea that consumers would continue to pay for expensive operating system upgrades when those same systems are operating less and less is a nonstarter.
By knocking the crutch out from under them Apple is better positioned for WHAT's NEXT (appification of everything) and less beholding to an unrealistic idea.
Apple is intensely profitable, but expect operating systems to be the first of many similar transitions as the ubiquitous mobile web that we are all connected to all the time. Add the web of things when all of our refrigerators and gizmos are connected too and you can see how the consumable idea is getting smaller and more frequent - micro payments for apps instead of macro payments for operating systems.
Oh and it may be time to reread FREE by Long Tail author Anderson ans the Wired editor's second book may prove to be the more important of the two long term.