“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$129)
Current: Mac OS X v10.4.7 (Tiger) Update – released June 27, 2006 (Free)
(Not counting tens of other free “point” updates (what some might equate with “service packs”) that Apple released for each major Mac OS X version.)
When one company performs by shipping new major OS versions at regular intervals and one company is stagnant for half a decade, is it really any wonder that the former generates more profit per OS user than the latter?
[UPDATE: 12:19pm EDT: Added free upgrade info for Puma.]
hmm thats some analyzing going on there
“they’ve made more operating systems so they must make more profit”
durr
Windows XP was releaded in 2004??? huh?
August 2006 – 2.25 years = Spring 2004…If memory serves, Windows XP (the last OS release I count since Windows 2003 server is just that – a server os) was released in 2001..but maybe I am mistaken.
Current???Microsoft???? ah ha ha ha ha…(in my best Triumh the insult comic dog voice) ” Like Dinosaur poop for me to pee on”
yes, and newer versions of iLife and iTunes are note supported by the older OSes.
It becomes the Apple Tax-upgrading required to play with the cool kids.
File this under ‘N’ for No Duh.
Apple’s market has never been the beer swilling, car race loving penny pinching low end computer (read: minesweeper) user. Apple has also never been a darling of corporations who buy commodity (read: cheap ass) product to fill their cubicles.
Just like any other product market, there is always a low end commodity and a high end premium.
i would say you get what you pay for, but with M$, you get a lot LESS than what you pay for, or is that more…..as in viruses, downtime, and headaches????
Does anyone else remember what happened *two days* before Microsoft released Windows XP? The first iPod was introduced.
How long does it feel like the iPod has been around?
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…
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.
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.
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.
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!
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.
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.
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.
slow news day! DAMN, I hate these days…
crap
You don’t need to be a math teacher to know Apple puts out more updates than Microsoft. And that most of the updates are to improve performance and add features on top of security updates.
While Microsoft mostly updates to put out the security fires it has to fight just about on an hourly basis with only 2 service pack updates in the last 6 years to improve any kind of performance or features.
Firstly, this ignores the fact that most Windows users are corporate/SME ‘captives’: if you kept current on Windows server license costs, including the CAL costs, you’ve probably been turned over at least twice by Microsoft.
The average company size in the US is around 30 seats and the average company in the UK (where I live) is around 18 seats, all of which is prime Small Business Server territory.
Most customers – whose resellers are so bent that a paper clip looks straight to them – won’t have been offered a volume licensing plan so they paid full retail. Even worse, an even smaller percentage would have taken Microsoft’s so-called Software Assurance option.
Therefore, most of them have probably paid once to put Small Business Server 2000 on their systems, plus CALs and they also would mostly have paid full retail for SBS2003 plus the accompanying CALS because – if memory serves – there was no upgrade path for retail SBS customers because – in <strike>Mafia</strike>Microsoft’s view – you should have bought into the Software Assurance <strike>scam</strike> program.
And it’s even worse if you’re a proper ‘corporate’ customer who doesn’t have access to SBS. Why? Because SBS is Microsoft’s free ‘dime-bag’ of ‘really good shit’, with artificially low license and CAL costs. If you’re a corporate paying for Enterprise versions of things like Exchange, you got shafted for both license costs and CAL costs. And don’t mention SA, because there is genuinely no such thing as a free lunch.
He forgot to factor in the anti-virus software and subscriptions into the equation. You simply cannot run Windoze without it. It’s like buying a car without wheels.
The issue is not only price, but price/benefit.
While OS X might be more expensive in a 5-year lifespan, the benefits are so, Mac users have no issues paying for it. I don’t know a single Mac user complaining about paying for an OS X upgrade, since the benefits makes it well worth of.
Windows, in the other hand, does not provide any benefit for the user since Windows 98. Well, yes, XP is 32 bit, looks a little better, perhaps more stable, but as user experience, the only difference is, it looks a little nicer (which can be also discussed!) But it does NOT provide a reason to upgrade other than “if you don’t upgrade, the new programs won’t run”.
I had Panther, and when I saw Tiger, there were 2 things which made me decide to upgrade: Dashboards and Expose. I think the productivity level I gain by using Expose is well worth the $129 for the upgrade. That is something I could never say about Windows, where every update feels like I paid for nothing.
So, Windows IS a tax, while OS X is… well… an UPGRADE!
Microsoft Software Assurance – we want you to pay expensive subscription fees every year for software that is never updated! And trust us, Windows IS less expensive!
At least on the Mac, we can choose when to pay or not. My ancient PowerBook G4 is still running 10.3 Panther, which I paid $69 for like 3 years ago (educational price). My iMac G5 is running 10.4 Tiger, which came with the system. How am I paying $100+ a year in OS upgrades?
And the most obvious reason why Mac OS X is more profitable per user than XP? Apple doesn’t spend $5 billion each time it wants to develop a new OS!!!
At Microsoft, it’s not a “real OS” UNLESS it takes $5 billion and 5 years to develop. It applies to Vista, but I believe XP itself took almost as long and also cost close to $5 billion in development costs. Shocking, but true.
Man O’ the Mac so put forth:
“newer versions of iLife and iTunes are note supported by the older OSes.
It becomes the Apple Tax-upgrading required to play with the cool kids.”
OK, time to bring you back to reality.
1. iTunes 6.05 (Current version) works on Mac OS 10.2.8 or Better. (Thats two major releases back for the slow kids)
2. Has it occured to you that new versions of software are More likely to leverage new advances in technology that might not be possible or were not part of an older os, thus making the cost to bring these new applications to an older platform a net loss? That said smarticus, know that iLife 06′ Latest version will run on 10.3.9. Thus completely blowing your whole bogus statement to the wind. I will grant you that the reccomended os version for running it is 10.4.4 (Mainly on account of new technologies that were available as of that OS release, which was a free upgrade if you had 10.4)
Can I also point out that, by the time Leopard is released, around 10.5 million systems will have been shipped with Tiger as the release system or with free upgrade rights though Up-to-date or whatever it’s called.
So that’s 10.5 million out of 23.5 million which – for lovers of percentages – is around 45% of the OS X installed base who have never had to pay a single penny for any OS upgrades.
Imagine a $1000 laptop that could run Vista. The only one that comes to mind is the MacBook. My $2000 one (IBM, 2.0Ghz Pentium M, 1 GB RAM, ATI x300 64MB) MIGHT be able to run it (though there’s sh** chance that I’d actually install that on it… XP is bad enough). Another not on vista: don’ worry about it. Windows OSes are like this: you don’t upgrade to the next one unless you have to (e.g. my college sells laptops that have Vista preinstalled, so I buy one). So, you’re not going to see it in mass use until there’s office software for it, antivirus stuff and all that security crap for it, and so on. I never plan on buying it. I’m an XP guy through and through (until this PC dies, at which point I’m getting a mac). I think Vista will see fewer tortured souls.d.d.d… I mean… uh… “users,” than MS would want. Mark my word.
VISTA will be nothing than a slower, (slightly) prettier version of XP. OH, AND ONE MORE THING: Aero sucks: imagine two windows on top of each other: you see the _[]X buttons for both: which one do I push to close it?!?! This actually is a problem, and MS should rethink their strategy of making a GUI that’s system-hogging and confusing. Oh, wait….
reality check,
First, iLife ’06 requires 10.3.9. You said it and it nicely makes my point.
Second, while the most recent iTunes will run on 10.2.8, try syncing an iPod nano, shuffle, or any updated iPod with a system running 10.2.8. It simply doesn’t work. Gee, isn’t iTunes supposed to sync with an iPod? Read the system requirements for any iPod in the apple store, then post your apology.
The true reality check is that one reason for the rapid fire OS updates is that it forces people to upgrade. Yes apple wants to make a profit and, yes, that means milking the installed customer base. If you don’t believe this is a strategy that apple utilizes, you’re dummer than your post suggests.
-MOTM