Tim Cook: Free Mac Software is ‘What it Means to Own a Mac’

| Analysis

During Apple's 2013Q4 Earnings Report, Apple CEO Tim Cook commented on why OS X Mavericks (and the iWork suite) is being provided for free. In a larger context, his remarks seem to be about increasing the value of Macs and, thereby, increasing sales.

When asked by Shannon Cross of Cross Research about the decision to give away Mavericks and the iWork suite, Mr. Cook said Apple wanted it to become a part of:

...what it means to own a Mac.

He added that Apple wants all customers to have access to the best features.

We want it to be part of the experience.

On the OS X side, "...we’re going back all the way to Snow Leopard on the OS X side." Mr. Cook characterized this free software as "a strong offer."

When Mr. Cook says something like that, it's usually more than just puffery. It appears to be part of a larger campaign to make the value proposition for Macs greater, and I think Apple is confident that will increase sales.

On Oct 22, Phil Schiller introduced new MacBook Pros with the 4th generation "Haswell" processor and better battery life. There was a US$200 price reduction. Mr. Oppenheimer also mentioned earlier in the call that MacBook Airs were selling exceptionally well. Also, Macs are continuing to gain market share against PCs.

All this suggests that if Apple builds great MacBooks with attractive prices, free productivity software and no periodic hassle with OS X upgrade costs, the company can sustain Mac healthy sales.

Here's a chart of the recent history of Mac sales per quarter.

Macintosh sales (millions) per quarter since 2009.

Without doing any regression analysis, it appears that it's too early to quantitatively declare an identifiable, solid downward trend. Part of the recent decline may be attributed to customers waiting for the new MacBook Pros.

It's almost a certainty that the tweaks Apple is now applying are designed to reverse any further decline in sales thanks to cannibalization. Historically, Apple has been very shrewd about what it takes to nudge a product's sales in the right direction as needed.

Another factor is that all of Apple's Macintosh customers can take advantage of Apple's infrastructure, and they all benefit from the latest security enhancements. That has turned out to be of great benefit in the iPad/iPhone world, so why not extend it to OS X?

Now, just like the iPads where the latest and greatest version of iOS is always free, the mantra of "what it means to own a Mac" might have far reaching consequences for sales and continued growth in market share.

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8 Comments Leave Your Own

MaxHedrm

Perhaps if they hadn’t decontented the iWork suite to match the mobile versions the plan would have worked better. :^/ But then I guess new users wouldn’t know the difference.

ibuck

Max, yes, the loss of features in the new, rewritten iWork suite stinks in the short term. But let’s wait & see if Apple adds those features back to the new versions within a year or so.

MaxHedrm

If that happens, the features are likely to be in the form of “paid downloads”. That’s fine, I suppose, after all I paid for it before, I’d be willing to pay for it again. But it is a shame that they had 4 years to IMPROVE the software and chose instead to remove a huge portion of the feature set. Rather than being a Microsoft Office replacement for professionals (which is what it aspired to be at launch, but never really achieved), it has become a niche filler for home users that just need a simple office suite. The same happened over time with iMovie & iDVD as well, so I suppose it shouldn’t be a surprise.

iJack

Is “decontented” an actual word?

MaxHedrm

It is now. ;^)

Actually, it was before too. I usually see it used referring to cars though.

wab95

John:

I see a major strategic coup here with this decision to give away the software for owning a Mac (and yes, making the software practice symmetrical across both iOS and OSX devices), that has MS and its beleaguered galaxy of OEMs squarely in the cross-hairs. Apple are sending a message to both personal consumers and enterprise about the value proposition of owning a Mac, the subtext of which is: a) the device is designed to work not only with the software but to integrate in function with other Macs and iOS devices; b) the OS should be part of the package when you make a hardware purchase as too should be its upgrades, backend servicing and security patches, and tweaks to its inter-operability. For enterprise senior leadership, this is getting hard to ignore. They alone can enforce change at the level of the IT wonks, who are simultaneously be pressured from below by mid and lower level employees who want to bring their Macs (and iOS devices) to work. The MS ice sheet continues to splinter and dwindle.

iJack, Max:

‘De-contented’ could also refer to the clinical status of a patient post enema in your friendly neighbourhood ER.

ctopher

wab95 - You should have decontented the end of your post! smile

Lee Dronick

Decontented can also mean removing the content of a digital file. smile

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