Analyst: Free Mountain Lion upgrade ‘would be brilliant Apple move’

“Apple would be making a ‘brilliant’ move if it decided to give away OS X Mountain Lion to Mac users as a free upgrade, an analyst said today,” Gregg Keizer reports for Computerworld.

“One clue that that is a possibility was buried in a July 2011 filing with the U.S. Securities and Exchange Commission (SEC), in which Apple for the first time said it was deferring a small portion of the revenue from each Mac sale to account for ‘unspecified software upgrades and features free of charge to customers,'” Keizer reports. “‘I think it’s a great idea,’ said Ezra Gottheil, an analyst with Technology Business Research when asked about a potentially-free upgrade for OS X users. ‘It would be brilliant.'”

Keizer reports, “‘We believe that there will be additional paid cloud offerings from Apple, so the more Macs that run Mountain Lion, the more revenue Apple can earn from those,”‘ Gottheil added. At the top of Gottheil’s list of new iCloud revenue possibilities was online storage, or as he put it, ‘Time Machine in the cloud.'”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Carl H.” for the heads up.]

48 Comments

    1. Yes, please. This would be a dastardly competitive move that made Microsoft’s expensive Window 8 upgrades look terrible on launch day. And there is no way Microsoft or its OEMS could fight back!

      Everyone loves knowing each iPhone and iPad the buy will get better over the next few years with great free OS upgrades. Having the same of peace of mind and happy anticipation with MacBook Air’s and iMac’s would be great a great customer service move.

  1. Yeah sure, I love these guys that tell Apple what they should do as if they don’t know better already themselves. Maybe Apple should start giving away their latest OS for free just as soon as MS does, OK dude? Seeing as how Lion is only $29.99 anyway, the price of their OS isn’t any kind of barrier to wide adoption.

    1. Yeah. and for 5 licences, to boot! 😛 I mean, really? My friends and I all pitched in 5 bucks, and we bought Lion and then installed it on all our machines.

      Compare that to paying $255 for a copy of Winsh*t Ultimate for ONE machine.

  2. $30.00 is pretty close to giving it away anyway. However, After just purchasing Lion, it isn’t like Mountain Lion is a big improvment that warrants another $30.00. $10.00 would seem more in line for current owners of Lion. I agree with this article, if you can give it away and incorporate its development costs into the hardware or cloud purchases, you win even more people over then ever. Can you imagine Apple having a TV add that said “We never charge for upgrades to the OS unlike the other guy”.

    1. It’s amazing how people now think an OS upgrade is only worth $10. Just a few years ago every new OS X version was $129. Windows is still in the $150-$250 range. If Apple isn’t going to charge at least $29, they’re going to give it away for free. $10 is so insignificant it wouldn’t be worth it.

      1. Your probably right. $10.00 X millions of users would be insignificant wouldn’t it. I’d rather have $10 X millions instead of $150 x thousands. That is why the app store has been so successful. All apple needs is to cover their development costs. Maybe $2.99 would be a better price.

        1. My point is this. It would be far more successful if nearly everyone updates to the next OS version because its either free or extremely inexpensive. Just look at the Windows side of things. How many people still use Windows XP? Most people only are running Microsofts newest O/S because it came with their computer not because they shelled out 150.00 to get it. Apple makes money on their hardware and within the app store, music store and book store. They can offer O/S upgrades free for the iPhone and iPad. There is no reason to believe that they shouldn’t be able to do the same for the Mac’s. You don’t need to gorge to be successful. Unfortunately for Microsoft, their users will need new PC’s or will need to shell out a lot of money just to get the latest upgrade. And even if their users do shell out the cash, their new O/S will still not include half of the advanced features that are currently included with OS X. Apple knows this and that is why I believe Mountain Lion will be either Free or extremely inexpensive. Inexpensive to me includes up to a selling price of $30.00. But again, Apple would like to get more people upgrading the the latest offering then fewer. Which really surprises me that they would no include some of their latest Mac’s in the compatibility requirements. But that is another topic entirely.

  3. Yes.
    Besides the fact that if you’re limit/tie-in your hardware and software, you kind of owe it to be free for the spec’s EOL.

    We all paid for the upgrades to support Apple. But I think, it has outgrown that need. Philosophically, they shouldn’t be charging us to keep our systems safe and updated for as long as the hardware supports the newest upgrade.

    1. I agree. The OS development costs are a drop in the bucket and easily paid for with all the near $100 billion thy have socked away. They just make their ecosystem that much more enticing and that’s worth spending on.

  4. Actually, this really would be a nice move by Apple — sell ML for $30 for new buyers, but make it a free upgrade for those who bought Lion. It wouldn’t cost Apple much but would be a huge publicity move. And it would give Microsoft fits!

  5. Apple could do it in a heartbeat… They’ve got the money. But isn’t that like taxing the rich? There’s a reason Apple has all that money.

    I could see them doing it, but only to make the user experience that much better and sell more Macs. But not with the intention of selling iCloud services once you upgrade.

    1. The old line of, “They should do it for free because they have the money” is absolutely ridiculous. So I guess you should go buy a homeless person lunch every day because “you’ve got the money”?

      How do you think Apple got its money, by giving everything away? No, a reasonable charge ($20-$30) is no big deal and helps pay for development.

      1. So true. An earlier post said “…The OS development costs are a drop in the bucket and easily paid for with all the near $100 billion thy have socked away.”

        Only thing I can say is, don’t let these guys anywhere near management in Apple.

  6. $29.99 is better than 2.5 year old Windows 7, at $99.99 for the cheapest version on Newegg. People apparently pay for Windows…

    I’ve also found that a lot of people are surprised when they find-out you can’t play DVD’s with just “Windows;” you need DVD software. They also ask, “Where’s Word?,” not knowing Windows doesn’t come with it.

  7. OS upgrades are free on my iPhone and iPad. Why not on my iMac too? It’s not like they are giving the hardware away. They can afford it and it would make MS look even more foolish with their OS versions and pricing scam.

    1. So Apple should give away iPhones and iPads now because “they can afford it”? With that line of reasoning, shouldn’t you be buying a homeless guy lunch today because you “can afford it”?

      Apple doesn’t just make money on software like MS does. Apple makes 30%-40% profit on its hardware sales, too (not that I’m excusing MS’ pricing, just pointing out where Apple makes its money v. MS).

      Apple didn’t get to be a hugely successful company with billions in the bank by giving everything away just because it had some money. That’s stupid and ridiculous. Apple has some free services and software because it makes business sense to have people using Apple-exclusive or Apple-best (iTunes) software to help Apple sell Macs, iPhones, iPads and iPods.

      Giving away OS updates does nothing to sell additional hardware.

      1. Who said they should give away hardware? Yes that would be stupid. Did you read what I wrote? Apparently not with any understanding.

        I said the OS should be free as it is on the iPhones and iPads. Why is it stupid? Why are they charging only $30? because it looks good (ever hear of PR).

        I was just agreeing with the article that it would look even better to just make it part of the machine and not a separate product like it is in their other devices.

        And yes they do have the money and no it would not hurt their bottom line a bit while it would help sell hardware by being just another reason to switch to a Mac.

        You should try handing a homeless guy a sandwich once in a while.

        1. Bizlaw is on a “read the first sentence only” rampage, without thinking outside the box.

          The overall effect of doing such a thing would be an enormous plus for the value and marketing of a Mac. No free handouts of course, but rather integrate it into the cost of a Mac.

          The upgrades have been getting cheaper, and last time I checked Apple is all about delivering one system and not having the end user even worry about the rest of the complexities.

          Of course they should only do it if the positive outweighs the negative both financially and PR wise.

          The almighty word of mouth marketing machine would go through the roof if they made a move like this. It would make Apple such an appealing buy – even more so for Windows users. And holy sh!t what a blow to Microsoft it would be.

        2. It’s hard to get people to think long term. Apple thinks long term, and yes Bizlaw it takes up front money to think long term.

          It’s not that Apple should give things away because they’ve got money, it’s that Apple could disrupt an entire industry (again) because they’ve got the money and patience to do so.

          Long term Mac sales increases would outweigh any investment on OS development. If you (Bizlaw) had learned about what makes Apple different from the rest, then you wouldn’t be posting these replies.

          There is no specific budget for OSX development, and no specific return on investment expected. If it makes sense for the overall brand and the end user, they do it. Of course it needs to make financial sense (see above paragraph).

      2. Biz law wrote, “Giving away OS updates does nothing to sell additional hardware.”

        My thoughts exactly. Giving away ML would be a nice gift to Mac owners, but it would cost tens of millions of dollars minimum and would be nothing but a PR stunt.

        It’s not like Apple has to do this to gain market share.

  8. $10 for Lion users / $30 for Snow Leopard users and $60 for a USB option which would install on any orevious OS X would be awesome.

    My wife’s machine is currently still using Leopard, so buying a SL disk, then downloading Lion to install before downloading and installing ML is a long process!!

    Phil

  9. Whatever the decision, $30 is not going to be a dealbreaker for most people. It would be a nice move though. Seeing how Apple’s strength is total integration it would be nice for hardware buyers to have free support of the latest software for several years. It would play into the whole Apple experience. It would be another reason for newcomers to choose Apple and to Apple the lost revenue would be close to a rounding error. In return, customer satisfaction and loyalty would be even higher than it already is, and adoption of the latest software would occur at a faster pace. It’s the same reasons iOS upgrades are already free, and since the degree of differentiation between iOS and OSX is rapidly closing, it could make sense as a company standard as well.

  10. Likely the SEC filing says more to the fact that Apple expects to ship new Mac models before Mountain Lion comes out. They always cover people who had bought hardware for a period of time with a free upgrade in the OS. It may be just this that is being referred to.

  11. It’s interesting now with the online distribution of OS X, that upgrades can be much less significant, and much more frequent.

    When Mountain Lion was announced, it really made me think that Apple may be moving towards this model, and pricing may change significantly as well. Pricing changed already with Lion, but that might just be the beginning.

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