Three Investing Experts on Apple's Many Smart Decisions... and One Mistake
Our tech writers are mostly applauding the updates Apple announced yesterday, but there is one issue with that free software package.
Smart Decisions: Four Observations on What Apple Got Right
By Michael Comeau
1. Apple Is holding the line on price, sort of. While I was very frustrated that the iPad Mini 2 was priced at $399, it's not necessarily the worst thing in the world because the company does need to keep its status as a premium brand. Apple can't afford to get lumped in with the bargain-bin Google (NASDAQ:GOOG) Android tablets that are gaining in market share but not doing anything for anyone's bottom line.
However, Apple's $200 price cut on the Macbook Pros may be a sort of admission of pressures in the declining PC space. Keep in mind, however, that those pressures are largely coming from Apple's iPad.
2. Apple is going end-to-end. By offering the iWork and iLife app suites free with new hardware purchases, and integrating them across all devices (iPhone, iPad, Mac), Apple is making an aggressive play to keep people locked firmly inside its walled ecosystem. Since Apple makes plenty of money on hardware, it can afford to give these apps away.
3. Free OS X Mavericks is big. Apple making OS X Mavericks and future operating system updates free is more than a nice gesture for loyal Apple fans. It's a strategic effort that will result in a simplified app ecosystem that keeps most (if not all) users and developers on the same OS. That's a big advantage over the Android and Microsoft (NASDAQ:MSFT) Windows ecosytems, which are sprawling and fragmented in comparison. (Also see: Developer Explains Why Mobile Start-Ups Put Apple First.)
4. Microsoft should be ticked off. Apple making OS updates, as well as iLife and IWork free should put Microsoft in a bad mood. Microsoft envisions a future of earning regular subscription fees from software maintenance and updates, and Apple is offering a nice alternative to that, particularly for businesses. Since, again, Apple doesn't make much money in software, it can sacrifice it in the name of strategic advancement against a key competitor. Apple's inroads in the desktop enterprise market will be inevitably slow, but this is a good way to make forward progress.
Michael Comeau edits Minyanville's Buzz & Banter and is also a regular columnist on Minyanville.com, focusing on technology and consumer stocks. Read more of his work for Minyanville, here.
(See also: Apple Rekindles Its Rivalry With an Old Foe)
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