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The idea to bundle free software applications that were previously only available for additional price is not just a promotion campaign from Apple, but a move that could redefine the market of hardware and software.

“We believe that our software and services play a tremendous role in delivering an overall experience that our customers have come to know and love,” said Tim Cook, chief executive officer of Apple, during a conference call with financial analysts.

Traditionally, Apple, as well as many other companies in the world, earned money by selling both hardware and software. While most PCs – Macs, ThinkPads, Inspirons, etc. – ship with pre-installed operating systems, they never featured additional office and many other useful applications, which were available separately. With the launch of the latest devices running Mac OS X and iOS, Apple decided to bundle both iWork and iLife suites for free. Moreover, for all owners of more or less recent Macs, Apple provided an opportunity to install latest OS X “Mavericks” operating system. As it appears, the initiative is not a promotion campaign, but a new vision of the firm.

“Over the last few years we have added significantly to the offering that we provide our customers a no incremental charge from operating system upgrade rights to non-software services such as Siri and iCloud. So, iLife and iWork has become as essential for the user experience as mail, messages and calendar. So we’re now making iPhoto, iMovie, Pages, Numbers and Keynotes available as free downloads to customers who purchase new iOS devices and we’re also making Mavericks and future OS X upgrades as well as iLife and iWork free to our Mac customers,” said Mr. Cook.

Nowadays it is truly hard to imagine a PC or tablet without certain capabilities, which are defined by software. As a result, Apple is taking a pro-active approach and installs numerous programs onto its devices to ensure their competitive abilities against Google Android- and Microsoft Windows/Windows Phone-based devices. Theoretically, Microsoft can easily follow Apple and offer free Office suite with every Windows device. This will naturally change the software market since most essential products will essentially be free.

While it is good to receive competitive programs for free with the purchase of hardware, there is a catch. Various regulators, such as the European Commission, tend to ensure there is competition even on the market of free software. As a consequence, such organizations may eventually limit the amount of free applications with PCs and tablets, or even force Apple and potentially others to “provide” choice to customers.

Tags: Apple, iOS, iLife, iWork, Microsoft, Windows, Office, Windows Phone

Discussion

Comments currently: 4
Discussion started: 10/30/13 06:18:04 PM
Latest comment: 10/31/13 03:12:45 AM
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This is lovely for Apple, who incidentally makes all their money through hardware.

For software developers that don't make hardware, though--in other words, everyone that's NOT Apple--it's a huge disservice. Do you have a great music program? Sorry, you have to compete with GarageBand. Do you have a great video editor? Sorry, you must compete with iMovie. And you must compete with FREE. It artificially lowers the price, and it greatly discourages competition.
0 0 [Posted by: bluvg  | Date: 10/30/13 06:18:04 PM]
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Funny. Microsoft charges too much for their software and people complain. Apple gives it away for free now and people still complain. No matter what, people will always find something to complain about.
0 0 [Posted by: Kashim  | Date: 10/30/13 07:21:54 PM]
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Apple will shoot themselves in the foot with this one.

If Apple customers will really believe that software should be free and they will not be ready to pay for it, or if vendors will go out of business, because they won't be able to compete with Apple's free software price, then there will be less and less software for Apple product.

And no, no one is actually buying Apple products for the hardware, because it's sub-par and overpriced. They are buying it because of all the software (apps) that are available for it. So if Apple will really kill of the software business model, people will just stop buying Apple hardware.
0 0 [Posted by: FF22  | Date: 10/30/13 07:37:21 PM]
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2. 
Are they trying to model it on Android systems, just because they are getting slaughtered in the market place?
0 0 [Posted by: caring1  | Date: 10/31/13 03:12:45 AM]
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