mavericksFor Apple users, today’s earnings call spelled the end of paid OS upgrades…forever.

While many had speculated that Apple’s free upgrade to Mavericks, the latest version of the company’s operating system for Macs, spelled the end of paid operating system upgrades for Mac users, today brought the final nail in the coffin. The move is notable because it applies to Mac users running versions dating back to Snow Leopard, released in 2009.

Apple CFO Peter Oppenheimer said that the company is now changing the way it is accounting for revenue from the Mac to include providing free operating system upgrades over the life of the device, not just for Mavericks but for the future.

When asked why Apple decided to make Mac OS updates free, and make its iWork suite complimentary with new Macs, CEO Tim Cook said it was just what Apple wanted to do.

“Our primary reason for doing it … is we wanted it to become part of what it meant to own a Mac and to own an iOS device,” he said.

For Microsoft, which builds part of its business model on selling upgrades to Windows, the change could be problematic for the company’s business. While Windows 8.1 was a free upgrade for everyone who owns Windows 8, Microsoft charges $120 to $200 for people upgrading to Windows 8.1 from older versions, including the popular Windows 7.

Microsoft’s head of communications offered a spirited response to Apple’s product announcement last week, but didn’t mention how Microsoft plans to respond to Apple’s decision to make the operating system update free.

Cook told analysts, “I think it’s a very strong offer. I think it’s just another reason for everyone to buy a Mac.”

Comments

  • Guest

    Sort of tells you how much effort they plan on putting into OSX versus iOS moving forward. And nice of them to strip out a bunch of functionality from iWorks before making it “free”. At least they can count on the tech media to repeat this PR stuff w/o questioning it.

    • Guest

      What crack are you smoking? IOS updates have been free for some time. What makes you thinks hat just because sox updates will now be free that they are somehow second class?

    • Out For Justice

      OSX has been superior to Windows for forever. More secure, micro-kernel, bash, consistency, familiarity, programmable, deployment model, … (the list is way to long…) In this case, free does not mean cheap. You have Windows 8.1 for that…

  • Guest

    Mac OS X upgrades have attracted some of the highest sales rates in tech, even when they cost over $100 a decade ago. To forego even $25 per seat is leaving billions of dollars on the table, and any informed shareholder should be livid.

    I think we can safely say that Apple represents no threat to any industry as long as the current C-suite remains in place.

    We are not an employee nor a shareholder of Apple Inc.

    • Guest

      Mac OS updates are a negligible contribution to the APPL balance sheet. If it generates any incremental HW sales over the long term (as probably will) then it’s a wash.

      However, it does bone MSFT pretty badly. Especially in the enterprise.

      • Guest

        Bone MS in the enterprise. Dude, what crack are you smoking?

        • Out For Justice

          In the enterprise and the server, Unix rules the roost. Also half the price on Amazon’s EC2. Unix rules, MSFT drools. Smoke that you crack head!

          • Perspective

            Ummm “Out For Justice” while I admire your enthusiasm for Unix, at the end of the day the thing that binds together most Fortune 500 (I said most) is products like Microsoft’s Active Directory and (gulp, but slowly growing) Exchange.

            Apple has no Enterprise offering…

          • Out For Justice

            Unix won on the server forever ago and the products you mention are more of a frustration for fortune 500 companies, not an asset (and loosing ground quickly). Here you go, “How Linux Conquered the Fortune 500″ link http://money.cnn.com/2013/05/06/technology/linux-500.pr.fortune/

            Denying iOS influence on the enterprise is the kind of kool-aid that has damaged MSFT in the past and will continue to plague them going forward. They just don’t have the foresight to be honest with themselves.

            OSX is an amazing developer’s machine, which is (along with other dev tasks) used to create iOS applications. Giving OSX away for free is a move to more firmly establish OSX as the developers tool of choice. Win developer’s mind share and the rest will follow. This is the part that MSFT does not understand any longer and I’m doubtful that they ever will again… …MSFT had their day and time, but sadly Dr. GUI has been gone for a very long time.

          • Out For Justice

            For completeness, I should also mention that Unix does Active Directory as well. Very likely does a better job of it then MSFT as well, not to mention other authentication schemes. Real enlightenment is only a google search away… https://www.google.com/#q=open+source+active+directory+linux

      • Out For Justice

        Good point. Not to mention that it is the gateway to iOS development. Meaning it makes sense to sacrifice a few dollars to get higher quality developers. Something MSFT does not understand, MSFT tries to make a profit center out of their developers and customers, loosing both. Not to mention the open source (free) software is better. Look no further then Service Stack (http://www.servicestack.net/) to see a prime example of how open source writes better software, even on the Windows platform (meaning WCF and its successor is a joke!).

  • probably will crash before I*&

    I’ve owned a Mac since the 90’s and this is, by far, is the worst upgrade I’ve ever installed. It crashes on almost every Apple made app includeing iTunes. If I pay you Apple will you make one that works properly or is this what we can expect for free for now on? If this is their new model, I’m jumping ship to, God forbid Windows!!

    • JeanLuc LaBarre

      I love how people think their individual experience is indicative of a larger troubling problem…

      If 0.1% of people have issues, that’s still a lot.
      For pity’s sake have some perspective man.

  • n8@n8.com

    I wonder how this will effect people updating their hardware. Now that the software is free, will it be pushed out (or hey it’s free so why not update) and thus making older machines slower and sluggish and driving customers to buy new machines? If this is the case, maybe (MAYBE) it would be a (close to) revenue neutral.

    • Out For Justice

      I agree with you on this one. There is a fear that this will be used as a hardware upgrade sell. If so, bad sell Apple and you’ll pay for it down the road (if that is the case)…

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