Why Apple is Giving Away Mavericks for Free

Apple (News - Alert) announced that upgrades to its new OS, Mavericks, will be free. Where that once would have been a radical departure and a potential competitive difference-maker, it’s now practically an expectation.

Apple is correct to understand that they really don’t have much of a choice.

Share of Customer is What Matters

Contrary to the belief of some, that they’re trying to make a grab for desktop/laptop OS market share, I don’t think that’s the point. It’s not as though this makes their hardware any cheaper or makes it possible to put the OS on a non-Apple computer.

In other words, it’s not about market share. It’s about share of customer.

Apple has enough market share to be massively successful, but what it needs to maintain is the high degree of loyalty among the Apple faithful.

Back in the 90s, people used to pass around this joke via email about what it would be like if Microsoft and Apple made cars instead of software and hardware. The line I remember most is this: “Apple’s cars are by far the best, but they cost $100,000 and only work on 5% of all roads.” (By contrast, Microsoft’s cars were cheap, and you could use them anywhere, but they crashed at least a couple times a day.)

Though it might have been a joke, it was deadly serious for Apple. 

When I was starting business school in 1996, we all had to buy new laptops as we entered the program, and we weren’t even allowed to buy an Apple machine, because nobody in the administration thought they’d be around three years later, when we’d still be in need of tech support.

Building the Apple Comeback

It had gotten much too easy for people to walk away from Apple’s products in the 90’s, even if they preferred them. Pushed to the brink, surviving only in classrooms and among designers, Apple built its comeback on doing the opposite: being everywhere for its customers. The iPod led to iTunes, which led to the iPhone, and the iPad. The ecosystem they created during that time locked in future revenues and loyalties, because to change one thing would be to change many others for the user.

And, besides, what they built was just damn good.

So the massive winning streak that Steve Jobs led the company into starting in ’97 and continuing to the current day wasn’t about taking market share from Windows: it was about getting and keeping customer share.

That is, Apple wanted its customers to get everything it got from them (including products that weren’t even considered traditional categories for computer manufacturers) like mp3 players, mobile phones, and tablets, which of course, they invented.

And it worked.

Boy, did it work. If you’d invested a penny in ’97, you’d have a dollar. And Apple is not at all interested in rolling that back.

Windows is giving Windows 8.1 as a free update, and the Chrome OS updates for free as a normal feature. Both of these platforms have issues. Windows just isn’t exciting to customers or, perhaps more importantly, developers, and Chrome just doesn’t seem to be able to get meaningful adoption.

It’s not hard to see these free updates as a form of advertising for their creators. Mavericks, really, is the way that Apple wants you to see its software working now. It’s the best version of what they do on the desktop and laptop. In a way, it’s in their interest to give that to you, especially when their competitors are doing the same thing.

Note, by the way, the two competitors in question: one, Microsoft, has withstood a decade long onslaught of staggering success from Apple, but maintains a dominant market share in the desktop/laptop OS. The other, Google, has in the last couple years taken a majority OS share in a market that Apple practically invented. These are formidable, if flawed, competitors.

It would be short-sighted and pointless for Apple to charge for an update like Mavericks. They need to continue to be everything to their community of customers and developers much more than they need the $29.95 from the updates to some software they were going to update, anyway.

Besides, once you’re running Mavericks on your old machine, how long will it be until you feel the need to power it with the hardware it deserves?

###

Jim McCarthy is the CEO & Co-Founder of Goldstar, the world’s biggest ticket booth making live entertainment a part of everyday life for millions of people. Before launching Goldstar in February 2002, Jim was Vice President of Marketing for venture-backed Kiko, Inc., and previous to that developed highly successful sales products for GeoCities until its acquisition by Yahoo! in 1999. Jim has been an active participant at the annual TED conference since 2008. He is an organizer and the curator of TEDxBroadway, the annual event which brings together experts from a wide range of fields to create, share, and stimulate dialogue about making Broadway the best it can be. He is a graduate of the Anderson School of Business at UCLA and Harvard University. Follow Goldstar on Twitter @goldstar.