Yes, OS X Mavericks Is Free. Wait, No It Isn’t — Or Is It?

Apple's placing its margins in a singular, platform-holistic basket

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The last half-dozen times I’ve updated OS X between hardware upgrades, I’ve paid money. Not money built into the price of each system — I’ve paid that, too. But like any self-respecting OS-maker, Apple’s charged a fee to upgrade, and I’ve been paying it for years.

Apple, of course, has software engineers and designers and project managers who work year in, year out to refine OS X, layering in new features, performance improvements, overhauling the interface and so forth. These people need to be paid, and Apple itself needs to take its piece for investing substantial time to advance the Mac platform. Upgrade fees have been Apple’s way to recoup some of that investment. None of that’s rocket science.

But with OS X Mavericks, Apple finally eliminated that upgrade fee, making OS X Mavericks free for existing Mac owners. If you own a Mac running OS X 10.6.8 or later, you just have to click the Mac App Store icon, locate OS X Mavericks (currently listed in “featured”), click “Download” and run through the particulars. No money changes hands.

So yes, I think it’s accurate to say that OS X Mavericks is free. And yes, “free” has qualifications, but when hasn’t it? When we say something that used to cost money now costs nothing, we’re saying so in relation to an industry norm. The norm in Apple’s case was paying $20 a year, and the norm prior to that was paying considerably more.

On the other hand, nothing’s really free. Someone’s paying something, somewhere, and Apple’s going to get its piece one way or another. To obtain OS X, you need to purchase a Mac, just as you need to purchase an iPhone, iPad or iPod Touch to obtain iOS (iOS upgrades also cost nothing). By eliminating OS X’s upgrade fee, Apple’s simply folding its R&D costs into the platform as a whole. But I’d wager Apple’s been folding those costs in for years (and since Apple designs and controls its hardware, it’s probably been doing so from the start).

The least expensive Mac, the Mac mini, starts at $600. You could argue that’s how much Apple’s now charging for OS X Mavericks, minimum, but I think it’s the wrong way to characterize what’s happened here. It ignores the fact that Apple’s eliminated a consumer cost, however slight.

Prior to Tuesday, you paid whatever you paid for a Mac, but you also paid ongoing upgrade fees for OS X, plus app costs if you used Apple products like iWork. By eliminating those latter costs, you now pay whatever you pay for a Mac and that’s it — either less or the same for notably more power, more storage, more bells and whistles, etc. That’s been the industry norm: that you get more for the same or less.

How much more is debatable, and demands a much more serious, comparative, scholarly survey of historical pricing and price trends alongside economist-caliber analyses of markets, consumer price indices and so forth. I’m also not arguing Apple’s prices are just as they should be (Apple is, in my view, selling what amount to consumer-grade products for boutique prices — my friends and I used to call what we’d pay for our Mac desktops and laptops the “Steve Jobs tax” back when the disparity between pre-Intel Apple and its consumer-angled, Intel-based competition was even starker).

But when you do the math, we’ve been paying $20 to upgrade OS X and now we’re paying nothing. That may seem a trivial difference, but it’s still a difference. Apple hasn’t upwardly adjusted the prices of any of its Macs to compensate (indeed, it’s lowered them significantly on the new Retina MacBook Pros). And the minimum requirement to upgrade — OS X 10.6 Snow Leopard — came out in August 2009. If Apple holds that line, we’re looking at a four-year window rolling forward before you’ll have to buy a new Mac to get the latest version of Mac OS. If Apple continues to update OS X annually, that’s a savings of $20 a year. If you hold onto your Mac for the full four years, it’s not a trivial amount.

Technically speaking, we should probably refer to OS X and Apple’s app productivity suite as “bundled,” since that’s more accurate. But make no mistake, this is Apple eliminating discrete software fees (and as my colleague Harry McCracken argues, potentially fighting fragmentation), and placing its margins in a singular, platform-holistic basket.

4 comments
ThomasBenjaminWoolum
ThomasBenjaminWoolum

I wish Microsoft would start doing the same thing too for Windows 10 as long as we have the latest version of Microsoft Windows

chethammer
chethammer

So, basically what you're saying is that Apple is going to do the same with OS as it does with iOS.  You get upgraded to the extent your hardware can take it and then you either don't upgrade your operating system for the duration that you own  the hardware or you buy new hardware that you can upgrade.  It isn't a new business model.  Apple will make people think they need some new feature and can't live without it and then they have you.  How else would you explain upgrading from a 4 to a 4s or a 5 to a 5s?  Those fingerprint readers are the biggest gimmick ever.

albsv2
albsv2

You have some valid points, but Apple has always had great marketing and had that keen eye for what gets and keeps customers. Sure you've paid and been loyal to them, but your article just (to me) sounds like a bit of an irritated rant, which I can totally understand. Although I am not an avid Apple user, it is apparent the 'image' and 'service' to the public is alot of what matters, this was an action to reinforce this public image...which in turn will reinforce their sales. So what you say about the software engineers making the OS' don't worry about them buddy, they'll be making their share from the sales. 

I'm thinking this won't turn you (the author) off Apple either, if anything it'll make you more patriotic and give you the boasting rights of being a true loyal fan, supporting their os upgrades whilst they were still buyable...which might I add, with software pirating is becoming harder to keep in control for some little differences with each revision. Smart move really.

njcarrier
njcarrier

It's important to consider other revenue that Apple receives in addition to the initial product purchase price, specifically app store revenue. By eliminating the cost to upgrade, they ensure that significantly more customers upgrade. These customers are then more likely to spend more in the app store, because apps are designed for the newest OS. I think it's pretty safe to say that Apple has performed a comprehensive analysis and determined that their total revenue will increase with the new plan.