Apple had a whole slew of announcements on Tuesday. We were treated to a price and release date for the Mac Pro, refreshed MacBook Pro models with Haswell chips, the iPad Air and the iPad Mini with Retina display, among other updates. The one that stands out to me the most, however, is Apple’s new pricing strategy: free.
It started with a boom, with Apple announced that OS X Mavericks will be a free upgrade. That’s compelling, but it’s also a fundamental shift from Microsoft’s strategy. Window 8.1, for example, costs about $99 to upgrade to. And Apple is including millions of Mac users by making the upgrade available to owners of Mac computers dating all the way back to 2007. Mavericks isn’t the only free software Apple announced today, however.
In yet another jab at Microsoft, Apple revealed that its iWork suite, which includes Pages, Numbers and Keynote, is also free. Then it said that iLife, which also includes GarageBand, iMovie and iPhoto, is also free across iOS and OS X devices, provided that you’re purchasing a new product. That’s amazing, though to be fair, Microsoft is also offering its Office Suite on its newer Windows RT 8.1 and Windows 8.1 products, including the Surface 2 and Surface 2 Pro.
Tim Cook said its new software pricing strategy is “turning the industry on its ear,” during his presentation. We agree. Aside from the upgrade from Windows 8 to Windows 8.1, and free Linux distributions, this is a pretty major step as far as “free” upgrades go. Plus, because it’s available for systems that are six-years-old, it’s a sign that Apple really does seem to care about customers – no matter how long ago they last purchased a product. The strategy is even new for Apple, which charged $19.99 for the upgrade to OS X Mountain Lion. That itself was an incredibly affordable price.
So will we see Microsoft follow suit? I doubt it. The company generates a lion’s share of its revenue from software services, so while Apple is becoming more of a hardware company in some respects, Microsoft needs to remain dedicated to generating revenue from Office and Windows. Indeed the industry does seem to be turning on its ear, though Google also offers its own Office competitors through Google Drive for free.
The ball is in your court, Microsoft.