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The author doesn't understand Apple. Apple doesn't view software and hardware separately. Coincidentally, I just wrote about this, but I'll copy and paste here

The author doesn't understand Apple. Apple doesn't view software and hardware separately. Coincidentally, I just wrote about this, but I'll copy and paste here because it seems relevant. A friend of mine recently asked me how Apple expected to continue making any money while giving away software that Microsoft charges $200 for. Understanding how Apple can give away their software and still make money comes in understanding Apple's business. Apple pundits frequently circle back to the point that Apple is a “hardware” company. As it turns out, they are wrong. Apple is a “devices” company. What is unique about Apple is their view that a device is made up of hardware & software, and that these two are inseparable. Apple believes this is the best view if you want to deliver a superior experience to the users of your products. If you look at Apple as a hardware company — which I believe is a mistake — they make better margins than any of their competitors. Following that flawed line of thinking, what they're doing now is using that extra profit to subsidize the software side. This viewpoint only holds if you view the hardware and software sides of the business as separate entities though. Apple has combined the two. You're not buying hardware or software, you're buying a device. What good is a microwave without the software that connects the buttons to the timer, microwave generator, etc? Thats how Apple views their devices. By making Mavericks and iWork free, theyre expanding their notion of the "post PC world". They're not just talking about iOS devices, theyre talking about their entire line up. If youre wondering why Apples “PC” sales continue to grow while everyone else is sinking, I think youve found your answer. http://www.bradlanders.com/2013/10/23/apples-greater-vision-of-the-post-pc-world/ http://www.bradlanders.com/2013/10/23/apples-greater-vision-...

adolph 13y ago
1. My impression was that Apple has had a couple flat/lower year to year quarters in lap and desktops. Their chart of iPad sales shows slowing/maturing of that market segment. 2. Apple sells experiences. If it were selling devices, then software updates for older devices (other than bugs and security/safety) would make no sense. 3. Giving away iWork and iLife is an interesting move that starts building a moat of out-of-the-box productivity software and somewhat incentivizes new sales without totally pissing off previous software purchasers (thru iTunes rebates) and acts as a stronger introduction to their cloud services. It'll be interesting to see if that strategy works enough to continue development on iWork (which I enjoy using although acknowledge is a not widely used product).
- deleted 13y ago
  [deleted]
- gshubert17 13y ago
  > If it were selling devices, then software updates for older devices (other than bugs and security/safety) would make no sense. On the other hand, I am more likely to buy an expensive device, knowing that updates will be available. In my mind, updates help the device retain its usefulness and value.
  - adolph 13y ago
    For the buyer, it's a gamble isn't it? Things could start going down the tubes OS8/9 style (or iOS 4 on 3G) but generally updates bring a bounty of new features and compatibility with services and software. If you are saying you will pay X amount more for a device for Y software upgrades, I wonder what's the difference (profit) between your X/Y and the cost of producing Y? It might actually be negative if the strategic value of software-ecology maintenance was high enough to the producer.
- bradleyland 13y ago
  Just a nit pick on the word experience. Experience is ephemeral. It has no link to the tangible thing that we're buying. The experience is the result, but I disagree that we can take the abstraction that far. A movie theater sells an experience. An app developer sells an experience. Apple sells devices. When I say device, I mean the totality of the hardware, the operating system, and the core apps. This, to me, is the atomic unit of a product that Apple has packaged. To go the step further to "experience" is too broad.
  - adolph 13y ago
    In an existential sense, "experience" is all there is. Maybe the largeness of the term renders it meaningless. I guess my point is that Apple's communications generally don't focus on a device so much as the human experiences the device enables. Think of the jogging dude ad where the entirety of classic Mac/iPod music sync and Nike Plus integration was displayed as a little slice of life. Sure there are some devices there, but they aren't saying these devices are better than Brand X devices or laying out a feature list. The communication is about how there is an attainable experience of a technologically enhanced life. There is generally an iCloud featured on the box of Apple's devices. This represents the integration of services to the device (itself an integration of hardware and software). So even at a level focusing on the day of sale something larger that what is in the box is being sold.
ksec 13y ago
I am not quite sure if devices is the right word. I would choose Product instead. But then Product in a sense doesn't include services. ( To me at least ) So they would be a Product and Services Company. Of coz if there are any one words that include both meaning please enlighten me.

adolph 13y ago

1. My impression was that Apple has had a couple flat/lower year to year quarters in lap and desktops. Their chart of iPad sales shows slowing/maturing of that market segment. 2. Apple sells experiences. If it were selling devices, then software updates for older devices (other than bugs and security/safety) would make no sense. 3. Giving away iWork and iLife is an interesting move that starts building a moat of out-of-the-box productivity software and somewhat incentivizes new sales without totally pissing off previous software purchasers (thru iTunes rebates) and acts as a stronger introduction to their cloud services. It'll be interesting to see if that strategy works enough to continue development on iWork (which I enjoy using although acknowledge is a not widely used product).

deleted 13y ago
[deleted]
gshubert17 13y ago
> If it were selling devices, then software updates for older devices (other than bugs and security/safety) would make no sense. On the other hand, I am more likely to buy an expensive device, knowing that updates will be available. In my mind, updates help the device retain its usefulness and value.
- adolph 13y ago
  For the buyer, it's a gamble isn't it? Things could start going down the tubes OS8/9 style (or iOS 4 on 3G) but generally updates bring a bounty of new features and compatibility with services and software. If you are saying you will pay X amount more for a device for Y software upgrades, I wonder what's the difference (profit) between your X/Y and the cost of producing Y? It might actually be negative if the strategic value of software-ecology maintenance was high enough to the producer.
bradleyland 13y ago
Just a nit pick on the word experience. Experience is ephemeral. It has no link to the tangible thing that we're buying. The experience is the result, but I disagree that we can take the abstraction that far. A movie theater sells an experience. An app developer sells an experience. Apple sells devices. When I say device, I mean the totality of the hardware, the operating system, and the core apps. This, to me, is the atomic unit of a product that Apple has packaged. To go the step further to "experience" is too broad.
- adolph 13y ago
  In an existential sense, "experience" is all there is. Maybe the largeness of the term renders it meaningless. I guess my point is that Apple's communications generally don't focus on a device so much as the human experiences the device enables. Think of the jogging dude ad where the entirety of classic Mac/iPod music sync and Nike Plus integration was displayed as a little slice of life. Sure there are some devices there, but they aren't saying these devices are better than Brand X devices or laying out a feature list. The communication is about how there is an attainable experience of a technologically enhanced life. There is generally an iCloud featured on the box of Apple's devices. This represents the integration of services to the device (itself an integration of hardware and software). So even at a level focusing on the day of sale something larger that what is in the box is being sold.

ksec 13y ago

I am not quite sure if devices is the right word. I would choose Product instead. But then Product in a sense doesn't include services. ( To me at least ) So they would be a Product and Services Company. Of coz if there are any one words that include both meaning please enlighten me.