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Free updates from Apple: OS X 10.0/10.1 redux or permanent shift?
I would’ve bet dollars to donuts that the FCPX 10.1 update was going to be a paid upgrade and obviously I was wrong. So now the question becomes, is Apple moving towards a business model where you pay for their first party software once and then receive free updates for life (or at least the foreseeable future)? It wouldn’t be the first time Apple has taken this approach as it wasn’t until OSX 10.2 that they started regularly charging for OS updates (presumable because 10.0 and 10.1 were so rough around the edges) and consumer programs like iMovie and iPhoto were free as well back in the early 2000’s.
Do you think this is a fundamental shift in business model for Apple or just a one-off freebie to help win hearts and minds? Many people are upset with Adobe’s CC model as they worry it will lead to less competition and will be a detriment to the industry as a whole. Could Apple’s possible move to free upgrades have a similar end result (albeit with a more consumer friendly approach, at least in the short term)? Unlike Adobe and Avid we all know that Apple’s bread is buttered with consumer hardware sales which puts them in a unique position to give out loss leaders like candy. Assuming this isn’t just a one-off from Apple I wonder how Adobe and Avid can compete with good enough and free?
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5 Replies
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These software only companies have a huge problem after their product mature while hardware companies are always innovating beyond maturity. So I guess that software companies that have hardware have a better model and future. Adobe is stuck and trying to find s way to survive. (imop is they are dead wrong.) Avid, Apple end Edit/share, Sony and edius are all sustained by hardware
Ricardo Marty
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With no manufacturing costs as in the old days with disks and boxes and printing i guess they only need to claw back the development costs to break even. I suspect FCPX is seen at least in part as a marketing tool to drive people to buy the new MacPros and to a lesser extent maybe macbook Pros. Hardware is where the money is for Apple and the current push is “get yourself a new machine to power that future 4K production!”.
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[Ricardo Marty] “These software only companies have a huge problem after their product mature while hardware companies are always innovating beyond maturity. So I guess that software companies that have hardware have a better model and future. Adobe is stuck and trying to find s way to survive. (imop is they are dead wrong.) Avid, Apple end Edit/share, Sony and edius are all sustained by hardware”
I see it differently.
First, I’d argue that FCPX is not yet mature. Second, I’d argue that the software-only companies are “innovating beyond maturity.”
Finally, I’d argue that the hardware-based companies like Apple and BMD are actively trying to de-value software. FCPX is the razor, Macs are the blades. I think this is a bad thing as a whole for the industry, because it discourages software-only companies from entering the market in the first place. Fewer competitors is ultimately bad for competition and therefore bad for us as users.
Walter Soyka
Principal & Designer at Keen Live
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I don’t think there are enough feature updates to justify Apple charging for it. I think that’s the bottom-line rather than having free updates in perpetuity.
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Steve,
I’d suspect the manufacturing and distribution costs are a pretty small chunk of the overall pie. I think I remember seeing a price breakdown of your average console video game and the physical production and distribution was only like $4 of the total $60 retail price. I assume the costs would be about the same for Apple (it’s just a DVD(s) w/data in a minimalist box).
With regards to other companies that sell hardware like Avid and Blackmagic I think they are in a different boat. Apple sells general purpose hardware, for lack of a better term, while Avid and BM sell specialist hardware to a mature market that doesn’t have near the growth potential of Apple’s demographic. I mean, Avid not only had to decouple MC from Avid’s I/O hardware they had to eventually open up MC to third party I/O devices. ISIS and other enterprise level hardware is still golden but I don’t see much growth potential there. I think BM saw the writing on the wall and that’s why they’ve jumped into the camera business with disruptive offerings.
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