Analyst: Apple generates more profit per OS user than Microsoft

“By releasing operating system upgrades at a more frequently and stable pace, Apple Computer is able to gain more profitability per user from its OS software than Microsoft, an analyst’s study has found,” Slash Lane reports for AppleInsider.

“PiperJaffray analyst Gene Munster recently compared Apple’s Mac OS X and Microsoft’s Windows pricing schemes and found that although Apple prices its OS software at a lower average selling price (ASP), it costs Mac users more per year to have the latest OS,” Lane reports. “According to Munster’s analysis, Apple releases a new version of Mac OS X about once a year for $129 (or an average of $107 per year to keep current), whereas Microsoft releases new versions of Windows about every 2.25 years for an average cost of $114 a year (or $48 per year to keep current).”

Lane reports, “Munster maintains an “Outperform” rating on shares of Apple Computer with a price target of $99.”

Full article here.

MacDailyNews Take: You’ve really got to stretch the definition of “keeping current” to apply it to Windows users’ “current” OS. Windows XP debuted on October 25, 2001. Windows users are using a half a decade old OS that’s seen two “Service Packs” designed to “improve security” (Microsoft did a great job with that, huh?). That’s “keeping current” in the Windows world, we guess.

In an almost identical timeframe, Apple has released:
• Mac OS X v10.0 (Cheetah) – March 24, 2001 (US$129)
• Mac OS X v10.1 (Puma) – September 25, 2001 (Free upgrade for existing Mac OS X users. US$129 for new users.)
• Mac OS X v10.2 (Jaguar) – August 24, 2002 (US$129)
• Mac OS X v10.3 (Panther) – October 24, 2003 (US$129)
• Mac OS X v10.4 (Tiger) – April 29, 2005 (US$129)

Current: Mac OS X v10.4.7 (Tiger) Update – released June 27, 2006 (Free)

(Not counting tens of other free “point” updates (what some might equate with “service packs”) that Apple released for each major Mac OS X version.)

When one company performs by shipping new major OS versions at regular intervals and one company is stagnant for half a decade, is it really any wonder that the former generates more profit per OS user than the latter?

[UPDATE: 12:19pm EDT: Added free upgrade info for Puma.]

26 Comments

  1. Windows XP was releaded in 2004??? huh?

    August 2006 – 2.25 years = Spring 2004…If memory serves, Windows XP (the last OS release I count since Windows 2003 server is just that – a server os) was released in 2001..but maybe I am mistaken.

  2. File this under ‘N’ for No Duh.
    Apple’s market has never been the beer swilling, car race loving penny pinching low end computer (read: minesweeper) user. Apple has also never been a darling of corporations who buy commodity (read: cheap ass) product to fill their cubicles.

    Just like any other product market, there is always a low end commodity and a high end premium.

  3. macromancer,

    Hey, I bet there are a lot of Formula One racing

    fans that have more class than most of us. I

    think you meant:

    NASCAR (redneck) car race loving

    penny pinching low end computer…

  4. But Mac OS X is worth paying the extra money for!!

    If it saves time, it more secure, does more, costs less in other software/labor needed then it’s worth it’s price.

    Of course eventually when TPM chips become widespread in the PC side, FULLY expect Apple to sell Mac OS X for generic PC’s.

    Of course present Intel based Mac’s can even run Vista. Apple is really lining up itself to rule the computing world.

  5. They compare the OS costs for being ‘current’ yet they don’t add the cost of being current in the war on malware.

    Good AV coverage on a Mac consists of setting a couple of preferences under System Preferences. What? 25¢ worth of your time?

    Good AV coverage on a Windows XP PC consists of an initial AV purchase and a yearly update. The time and internet access use wasted by updating and installing both AV and Windows software. The CPU cycles lost by checking everything that enters or leaves the computer. The user time lost in the constant vigilance required to keep your computer malware free and your OS and hard drives problem free. All stuff you don’t need to do on a Mac.

    Even if you are going with free AV programs for XP you need to use several and you need to find, download, run and update all of them.

    Most PC users never count the time they waste on simple maintenance and malware protection. They never think of it as time wasted. They think of it as a simple fact of life. They have no idea of the time and money saved using a Mac. If their time is worth $20 per hour they waste at least 2 hours a week or about $2000 a year in lost productivity alone as long as they never get infected.

    Then there is the actual OS improvements with each new OS X iteration. Each new cat got faster and had more features. Another thing a Windows user would never be able to get their head around. The numerous OS X upgrades were worth the price.

  6. This comparison works ONLY because Microsoft is two years late on Vista. I’m sure MS would have preferred to have Vista out on time. And it does not include the cost of subscribing to various security-related programs on an annual basis, of course.

  7. What, we’re not counting One Care, and it’s competitors? Are they all free now?
    If you’re going to call any version of Windows ‘current’, then it’s got to have the lated AV software on it!

  8. OK – some perspective here. This is a stock analyst’s perspective, which means how many dollars are going into Apple’s pockets vs. MSFT’s pockets, and how that affects Apple’s stock price. That is all. Forget all the other considerations: cost of virii protection, etc. This is purely about revenue from OS software sales, and it hightlights how Apple is ahead of MSFT in this regard. THIS IS A GOOD THING; it means Apple’s stock is more valuable, it means Apple is a healthier company, it means Apple has more money for research to create great things.

  9. Being a Mac user gives Apple more money but costs the consumer LESS than if they went with Winblows. You have to factor in anti-virus software costs and buying a new PC at least every 3 years (vs. 5-6 for Mac users) because it’s FUBAR.

  10. This “analysis” also assumes you’ve bought in at the date of initial release. I’ve just recently bought my first ever copy of XP Pro, it was $310. I’ve bought two versions of OS X. I paid $99 a piece for Panther and Tiger. For me, it costs $112 more to run an almost 5 year old “latest” version of Windows than it does to run the 16 month old latest version of OS X.

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