“The desktop operating system is dead as a major profit center, and Apple just delivered the obituary,” Ryan Tate reports for Wired. “Amid a slew of incremental improvements to its iPad tablets and MacBook laptops, Apple [yesterday] announced some landmark news about its oldest surviving operating system: It will not charge for the latest big upgrade, Mac OS X 10.9 Mavericks, breaking from a tradition that goes back 16 years and shining a light on a long-unfolding reversal in how tech profits are made. Eighteen years ago, the tech industry’s dominant company made nearly half its revenue selling OS licenses. Now, as Apple just confirmed, the prices of OS licenses are headed towards zilch.”
“Microsoft — the king of the operating system in the ’80s and ’90s and on into the aughts — still charges PC makers who sell the Windows OS preloaded on their desktop and laptop machines, but that business is shrinking, thanks in large part to the continued success of Apple,” Tate reports. “Microsoft’s OS sales once generated 47 percent of its revenue, but they contributed just 25 percent last year on decelerating Windows licensing (and even that figure is inflated by ad revenue from Windows Live). In response, Microsoft is restructuring as a ‘devices and services’ business — meaning a company that sells hardware like the Xbox and web services like Azure. In other words, it’s becoming more like Apple. Apple isn’t really a software company. It makes software and services that run on its own hardware devices.”
“But this game of cross-subsidizing the operating system will be tougher for Microsoft, since the company is no Apple when it comes to hardware — and no Google when it comes to online services,” Tate reports. “The company rose to prominence in the horizontal PC era, when Microsoft could play one hardware vendor against another, dictate prices, and keep a computer’s hefty OS markup hidden from consumers. Those were the days.”
Read more in the full article here.
MacDailyNews Take: Die, Manuresoft, die!
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