How Apple Can Hurt Microsoft

01.02.00 - Mark

I, Cringely's column this week has some scary smart ideas on how Apple could deal a major blow to Microsoft's OS market share. The gist is that once Apple send 10.5 to the presses (presumably around the time the next Windows is shipping) Apple can give away the intel version 10.4 on iPods (or via a download) At first look this could, as the technology analysts love to say, "Kill Apple". When Microsoft opened up Internet Explorer as a free browser Netscape died off. That was because Microsoft can operate for years at zero profit, or at least far longer than any competing business. So in an all out battle of the free OSes, Microsoft could just drive Apple into submission. Or could they?

I don't know what the numbers are but Microsoft can't be selling that many new OSes direct to consumer. Homebrewers are either moving to *nix or recycling XP install discs. Average Joe doesn't even bother with new OSes and instead goes directly to Dell for a new system - it costs $200 for a full retail version of a MS OS, a new dell runs what $300 with free printer? Sure you might get a surge of enthusiasts buying the new version when it comes out but they're just as likely to download it. Microsoft can only really be getting any money from its OS via site license or as an OEM. Historically there hasn't been a great deal of change between Windows versions. Software always seem to be good for the last three versions of Windows as well, so consumers don't feel the need to upgrade.

This is where Apple is different. Apple has proven that it can make a decent bit of money with each OS revision. $30 for OS X public beta? No problem, 10.0? Here's $100, 10.1, just charge it, 10.2 do you take cash? There are a lot of Mac users that have paid $100 (or more) for every version of the Mac OS. 10.4 has barely been out 6 months and I'm already feeling a serious need to upgrade from 10.3 because I can't upgrade some of my favorite programs, or use some of the cool stuff programmers have been cranking out for the platform. It wasn't even hard to see it a month or so after the 10.4 release.

Thats not to say that I can't use my system, there are plenty of apps that still work perfectly fine under 10.3, but Apple sticks so much value into it's point releases that its not only worthwhile, it barely takes a month before it becomes essential (admittedly I lean towards the geek side of the equation and want to use the bleeding edge software)

Apple can give away the previous release for free (or possibly even heavily discounted ie $15 or free with the purchase of an iPod) as the Mac software community essentially makes it a fully functional "demo" OS. If you've loaded it onto the iPod they have an external harddrive - the combination is a supersized live linux distribution. If you did this the best case scenario is that the users of the "demo" pick up a new high end mac with all the goodies, at worst they bought a new iPod and became a little more aware of this other OS they've heard so much about. For the non geeks, it take time to grow into an OS, and free is a great motivator.

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