C|Net: Apple's .Mac Missing a Golden Opportunity

by , 1:35 PM EDT, May 21st, 2008

Apple charges US$99/year for .Mac, and that's a lot compared to competing services, according to Tom Krazit at C|Net on Wednesday. Apple could adjust the business model, lower the price and increase the attractiveness, not lose money and make .Mac a much more compelling and universal service.

The problem, according to Mr. Krazit, is that competing services have diluted the appeal of a US$99/year service. Google offers twice the storage for $20. Flickr offers unlimited photo uploading for $24.95/year. Customers have plenty of reasons to avoid .Mac, but that needn't be so.

"Apple is clearly managing to convince more computer buyers than ever that Macs are a compelling option, but it's failing to persuade those same buyers that .Mac is worth $99 a year," Mr. Krazit noted. "The company is missing out on two converging trends -- a life spent online and surging Mac sales -- to use .Mac as a selling point for the Mac, or to get the increasing number of Mac users onto the .Mac service and therefore transformed into a recurring source of revenue."

For example, Apple could undermine the other services by changing the pricing to $49/year, about what flickr and Google accounts together would cost, and expand the appeal. Apple could offer a year of free .Mac with every Mac purchase to "lock in" the customer and keep them from straying from the fold after they've uploaded all their photos from a Mac to .Mac.

"Apple has always tried to sell its products as models of integrated design, where the software is designed to work with specific hardware to promote reliability and stability," Mr. Krazit explained. "It has extended that philosophy to the third leg of the modern computing experience -- the Internet -- but it continues to deter people from using .Mac with a high price tag."

Now is the time to rethink .Mac and use it to increase revenue and loyalty rather than deter customers, Mr. Krazit concluded.