Apple’s .Mac service, is “a $99-a-year collection of online tools released in 2002 featuring 10GBs of file storage, Web site hosting, and photo sharing, among other things,” Tom Krazit writes for CNET.
“Apple has designed .Mac to work very closely with its Macs, and updated it last year with additional storage and hooks into the latest version of iLife. But Apple charges far more than competing online services, which offer many of the same services for free or for a nominal charge,” Krazit writes.
“The art of business–even in a Web 2.0-gone-mad world–has not yet evolved to the point where giving your product away for free always makes sense. Maintaining a storage and networking facility costs real money,” Krazit writes. “And why give something away for free when people are willing to pay something–if not $99 a year–for a service?”
“Of course, Apple’s financial performance isn’t exactly hurting these days, so it’s not like .Mac is a huge drain on the company,” Krazit writes. “But the company is letting price get in the way of a service that could be a unique selling point for its hardware: the real profit engine at Apple.”
Krazit writes, “Apple could turn .Mac into a real selling point for its hardware if it cut the price in half to $49… Or, Apple could give away a free year of .Mac service with the purchase of a new Mac. That’s the drug-dealer strategy: the first one is free. After that, once you’ve put all your images and videos on the .Mac service, $49 a year won’t seem like much to keep that service running. Apple does provide a 60-day trial period for .Mac services, but that’s not enough to get hooked.”
Krazit writes, “Grocery stores sell basic items like tuna fish and bread at razor-thin margins, because they know people are likely to pick up a few other things while they’re at the market for the basics. Apple has an opportunity to do the same thing with .Mac, and it won’t have to give away the store to make it happen.”
Read more in the full article here.