On Mac OS X Upgrades

Friday, 2003-10-31; 00:04:00

Why Apple needs to start offering upgrade prices

(Originally posted on AppleXnet)

With the release of Panther, Apple is finally getting past the stage of reimplementing Mac OS 9 features into Mac OS X. The two holdout features that I can remember from Mac OS 9 are finally back with Panther: Finder labels, and automatic startup and shutdown. With exposé easily being the highlight of Panther, and with tons of numerous other features that weren't ever present in Mac OS 9 (fast user switching, better Windows integration), Mac OS X can now be rightfully called a mature operating system. But there's one major issue that Apple has overlooked with Panther: upgrade prices.

Now, before I get pummeled with comments that the price of Panther is justified, let me get this out of the way: I bought Panther (I'm writing this on it right now), and I think Panther is fully worth the $129, as Jaguar was as well. I have no problem paying $129 every year for a major operating system from Apple. I also believe that every paid Mac OS X upgrade is far better than any paid Windows upgrade. But I think that many Mac users are going to balk at paying another $129.

Let's look at this purely from a price standpoint in relation to Windows. Since March 24, 2001, when Mac OS X was first released, we have had 2 other paid upgrades for Mac OS X: Jaguar and Panther. Mac OS X 10.1 (Puma) was a major release but was a free upgrade, most likely because Mac OS X 10.0 (Cheetah) was incomplete and buggy, at best. So in 2.5 years, a normal Mac user would have to pay $387 just for Mac OS X. This implies that the user did not buy a new Mac and bought each paid upgrade of Mac OS X at full upgrade price. Contrast this to Windows, where the only recent release has been Windows XP, which cost $299 for the Professional Edition (we'll disregard the home edition, because Mac OS X includes many advanced features that XP Professional does). Windows Longhorn is not going to be released until 2006. Assuming that Apple keeps up its pace in major upgrades to Mac OS X, we'll likely see 2 more paid upgrades by the time Longhorn is released. That means that a Mac user would have paid $645 for Mac OS X up until then, while the analogous Windows user would have paid $498, assuming that Longhorn costs the same as XP (that's $299 for XP Professional, $199 for Longhorn Professional Upgrade). That's a pretty penny to pay for operating system upgrades, even though Mac OS X is a pretty (and functional) operating system.

With the Classic Mac OS, Apple offered discounts on paid operating system upgrades if you had bought the previous paid upgrade. For example, when Mac OS 8.5 was released, I was able to purchase it for $69 instead of the $99 retail price, because I had bought Mac OS 8.0. So before Mac OS X, Mac users alternated between purchasing paid upgrades and purchasing discounted paid upgrades for each major release of the Mac OS (I believe that when you purchased a discounted paid upgrade, you wouldn't qualify for a discounted paid upgrade for the next major release, but I could be wrong). Apple provided coupons in the Mac OS retail box which you could present at time of purchase, and get an instant $30 rebate. In fact, Apple still includes these coupons with Mac OS X, but hasn't yet instituted any upgrade program.

The initial cost of a Mac is an obstacle for potential switchers, because they see the price, and without thinking about the features that a Mac includes in terms of software, they point to a PC and say, "Wow, I can get that PC for much less than that Mac?!" So when potential switchers think of the cost of Mac OS X operating system upgrades, they will be even more unlikely to switch because of the added cost of operating system upgrades.

Granted, Mac users don't HAVE to upgrade to the latest operating system, and with Panther, the operating system is incredibly full-featured that one could potentially skip Mac OS X 10.4 and head directly to Mac OS X 10.5, when it comes out. The problem is, with the Mac community, many software titles require the latest and greatest Mac operating system. Take a look around on MacUpdate and VersionTracker, and look at how many of them require Jaguar. Since the Mac community is composed largely of shareware and freeware developers, they don't take the time to support older operating systems, and no one can blame them for not doing so. That means that if you want to use the latest cool apps, you'll likely have to make sure you have the latest version of Mac OS X.

So why doesn't Apple provide an upgrade path for previous users of Mac OS X? We all know that Apple is primarily a hardware company, and makes most of its profits in that sector. While $30 off Mac OS X upgrades would be a significant reduction in revenue, I believe that more Mac users would be inclined to pay for operating system upgrades when they are given a slight discount. After all, the Mac community as a whole largely accepts paying $129 for Mac OS X every year: Mac users like to be on the cutting-edge, and so most of them want the latest version of Mac OS X. An upgrade path would just allow more people to get this latest version.

If Apple really is serious about enticing Windows users to come to the Mac side of the fence, it should lay down the gauntlet and do everything they can. The switcher campaign, Mac OS X, and all the new hardware is a very nice start and middle, but Apple needs to go the full nine yards and take care of its users. Forcing everyone to pay full price for an operating system upgrade (if they buy it) is hardly doing so.

Again, I would rather pay $645 for all Mac OS X operating system upgrades until 2006 than even spend a penny for both XP and Longhorn, but I think the complaint about the lack of Mac OS X upgrade prices is a legitimate one. Apple can't afford to lose any potential switchers, even though its market share is (hopefully) on the rise: it needs every customer it can get. And $129/year is not too enticing to Windows users, even if they get a superior operating system.

-- simX

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