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

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.