Doing the Math: At $29.99, Mac OS X Lion was WWDC's most expensive product
Our own Dave Caolo pointed out something that took the rest of the TUAW team aback: at US$29.99, Mac OS X Lion was the most expensive product discussed at WWDC today. It's not as though the next version of the Mac's operating system had a lot of pricing competition at the keynote. iOS 5 will be a free upgrade to users with supported hardware, and iCloud's services -- which used to cost $99/year under MobileMe -- are all completely free. In fact, other than Lion itself, the only thing Apple announced at WWDC that costs anything at all was iTunes Match at $25 a year.
One of the major anti-Apple memes over the lifetime of the Mac has been that Apple's products are far more expensive than those of its competitors. While there are arguments both for and against that line of thinking for Macs and equivalently-configured PCs, the iPad's pricing compared to other tablets' blows that argument out of the water, and Apple's software prices undercut those of Windows by an astonishing margin, as demonstrated in the graphic above.
Windows 7 comes in a spread of flavors, while Mac OS X Lion comes in only two: the standard $29.99 user edition and an upgraded server edition that costs $50 more. Both will be downloads from the Mac App Store, and while there's no official word yet, based on a cursory reading of the current terms and conditions, it seems that both Lion and Lion Server Edition will be installable on up to 10 machines associated with a user's iTunes account.
So our graphic is wrong in one sense: while you could buy multiple copies of Lion for the same price as the equivalent Windows software, you don't actually have to. If anything, this makes Lion an even more economical prospect than Windows. Even if you want to make the argument that it'd take a Server Edition upgrade to put Lion's feature set on parity with Windows 7 Ultimate Edition (an assessment with which we'd politely disagree), Windows 7 is still only installable on one machine. Therefore, even with "Lion Server Edition" costing a total of $80, that's $80 for a 10-machine license under the current terms and conditions versus $220 to install Windows 7 Ultimate Edition on one.
Put another way: for the amount of money you'd pay for a single-machine license for Windows 7 Ultimate Edition, you could install Mac OS X Lion and its server tools on 20 machines and still have 60 bucks left over. If you're like us and you think Lion doesn't need the server tools to be on parity with Windows 7 Ultimate, you could install Lion on 70 machines and buy yourself a six-pack for the same price as one Windows 7 Ultimate license.
Apple charged $129 for Mac OS X Leopard and older iterations of its operating system, which were still considered bargains against the pricing of equivalent Windows packages. But Lion's incredibly low cost compared to that of Windows merely demonstrates what we've known all along: Apple is, at its heart, a hardware company. It makes money off of its hardware, but the only purpose of the software is to make the hardware sing. iTunes? Free. iCloud? Free. iOS? Free. Mac OS X? 30 bucks.
Microsoft, on the other hand, is primarily a software company dependent on hardware makers to run its software. Xbox 360 and some minor pilot projects aside, Microsoft makes an overwhelming majority of its money off licenses of Windows and Office editions. With that in mind, it's little wonder that Microsoft's software costs so much more... or that Apple is currently cleaning Microsoft's clock financially.
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Our own Dave Caolo pointed out something that took the rest of the TUAW team aback: at US$29.99, Mac OS X Lion was the most expensive...
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@terty2: Is your view that it's an upgrade and should be free simply because the version number is a point increase rather than a full number? In that case, Windows "7" should also have been free given that it's really NT6.1 under the hood - for that matter, so should XP (5.1 to 2000's 5.0) and 98 (4.1 to 95's 4.0).
June 09 2011 at 5:42 PM Report abuse Permalink rate up rate down ReplyFor every 2011 Macbook Pro w/ 15.4" screen, 4GB RAM, 500GB HDD (~$1,200) you can buy AT LEAST two PCs for the same price, if not more, after a quick search I found more than 10 different PCs with the same or better specs. Do the math, you're paying for a brand. And if you don't want windows on your two $600 PCs you can switch to Linux for free! With free and consistent OS updates. This article is embarrasing.
June 08 2011 at 1:12 PM Report abuse Permalink +1 rate up rate down ReplyIt's an upgrade, not a "new" OS by a long shot. Similar Windows upgrades (service packs) are free.
You can't use Lion without either (a) paying for new hardware from Apple with Lion preinstalled, or (b) already owning OSX (in which case you've paid for hardware from Apple with OSX preinstalled).
The Lion license allows for installation multiple machines? That's great.. but again, THEY ALL HAVE TO BE PURCHASED FROM APPLE. Meaning you've already parted with $1200+ for the existing hardware AND OS on that machine in the first place -- again, it's an upgrade.
In terms of the way Apple structures/bundles its hardware and software bundles, there is no "valid" way to get Lion as a true standalone product. At least a Windows license allows you to install on any hardware you choose (even a Mac), whether or not you've already paid for an existing OS on that hardware.
Your whole comparison is thoroughly disingenuous.
Hei, Apple fans..... at least I'm not charged for SP upgrades to my Windows. Because these "new version" of OSX have less new things than an SP pack from Windows....
BTW, got to love the new "magic" feature in Lion... you can resize the window from any corner.... WOW, isn't that something? I'd pay 30$ for an upgrade only for that :D.
OH, wait, Windows has that option for ages now... so does Linux... so does any other operating system....*sigh*
when comparing upgrade to upgrade is price the only thing looked at or are features compared? Seems too much focus is placed on the price of the upgrade and not what you are getting for the price.
June 07 2011 at 2:44 PM Report abuse Permalink rate up rate down ReplyThis isn't a fair argument and yet I am a Mac User. Microsoft have no hardware on which to offset the dev costs of Windows OS. Apple operates with relatively high priced hardware on which they make all the manufacturing profit. Yes Windows machines are cheaper and lower build quality but Microsoft is making nothing on the Hardware and in many cases the OEM price to Manufacturers is DRASTICALLY below the retail value of Windows OS.
There is plenty of reason to diss Microsoft but the price of the OS is a cheap shot, they couldnt exist at $29.
houdini
If you look at Microsoft's profit figures, you'd realize that they are not hurting in regards to sales and profit.
What Apple has learned (with the iPhone and iPad, and now the Mac), and which is true for most things, is that if you charge less for necessities, then more people will buy, therefore increasing your sales and profit.
Apple may make some profit from hardware sales, but it pales in comparison to software sales where they only have to create one version of something, and there is ZERO cost to manufacturing because it is being distributed online.
If Apple has sold 15 billion songs on iTunes, do you think they didn't make a fair amount of profit on that unrelated to any hardware sales?
I can't count how many of my friends and clients refuse to upgrade to the latest version of Windows because of the expense and time involved? That's one of the biggest factors in the move towards the web and OS-independant operating systems like the web.
Microsoft would sell much more than 10 times the number of copies of windows if they sold it for 10 times less the cost.
It's crazy that there are so much apple hatred here on an apple themed site. I never go to a windows site and hate on them.
I love my Mac, I love my iPhone, love my apple tv, love my iMac. LOVE my Mac book pro. It seems like I am a rare breed on this apple themed site.
Why spend your time on an apple themed site bitching and complaining on a product you don't even like? Nothing better to do in your life?
Why do you spend your time on an apple themed site to bitch and complain on a product you don't even like?
I do like my MBP and I also like my iPhone(s) .. that doesn't mean one has to stand up every stupid story that is posted on an Apple themed site.
Mindless MS bashing like this gives every respectable Apple fan a bad name. Apple fans should be better than that.
T.
Sigh...again this silly argument between Windows and PC. I see it this way: Buying a cheap laptop for $300 on which Windows alone costs $100 isn't a great idea, especially since you need to trash that laptop after two years anyway.
You can't buy a Fiat and pretend it's a Mercedes.
"If anything, this makes Lion an even more economical prospect than Windows"
Oh please... You did forgot about the EXPENSIVE hardware needed to run Mac OS X???
"Put another way: for the amount of money you'd pay for a single-machine license for Windows 7 Ultimate Edition, you could install Mac OS X Lion and its server tools on 20 machines"
Yeah, I REALLY want to see the cost of 20 Mac machines compared to 20 PC machines.
Apple fanboys are really getting annoying nowadays.
Instead of releasing updates of the current OS, Apple sells a new system every 2 years or so. How about that?
Yeah, I always facepalm when people say that upgrades and AppleCare are 'values', as if the massive markup on Apple hardware was nonexistent. Listen, Apple gets more profit from you than any other company, and that comes at hardware purchase time. For the margins they charge, the could easily (and absolutely should) include free upgrades and 3-yr warranty with every Mac they sell, but they don't.
June 07 2011 at 9:49 AM Report abuse Permalink rate up rate down ReplyCorrect me if I'm wrong, but isn't Lion a $29.99 UPGRADE? At this point Apple hasn't shown a way to install it without having a prior OS installed. The prices you have for Windows above are for full versions. When Snow Leopard came out it was $29 for an upgrade copy. If you weren't upgrading you "had" to buy the Mac Box Set for $129.
It's still a huge difference, but I don't think the comparison is fair.
Ok since you asked to be corrected, I'll do so. You're wrong. Despite Apple implying that you needed to purchase Snow Leopard for $129.00 as the upgrade path from Tiger to Snow Leopard (if you never had purchased Leopard), that was not the case. The version of Snow Leopard that was on the $29.99 DVD was the exact same version as the one on the $129.00 DVD. I had experience installing both onto machines. No difference.
June 07 2011 at 10:58 AM Report abuse Permalink rate up rate down ReplyHot Apps on TUAW
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