Free! Why Apple's New OS X Mavericks, iLife, iWork Pricing Is a Big Deal

Microsoft may have to lower its prices drastically to compete.

ByABC News
October 23, 2013, 10:53 AM


Craig Federighi, Apple's VP of software engineering, may not have actually said that, but he channeled Oprah Winfrey in spirit by giving away some of his favorite things. OS X Mavericks, the newest operating system from Apple, was released yesterday with no price tag attached. "We are going to revolutionize pricing," said Federighi at yesterday's event. "Today, we are announcing a new era for the Macs."

It's not just a new era for Macs, but for computers overall. Microsoft may have released the Windows 8.1 upgrade as a free download (albeit one with some technical issues), but brand new operating systems have always cost money. Ben Bajarin, a tech analyst for Creative Strategies, said that Microsoft may have to change the way it does things.

"Apple has forced them to do annual releases of Windows based on how Apple releases operating systems," he told ABC News. "I don't think Microsoft is in a position to offer Windows upgrades for free, but they need to get much more competitive and lower prices. Even the last four versions of OS X have been $29."

In addition to the new operating system, new versions of both the iWork and iLife software packages are also available for Mac users free of charge, though with a slight catch. Users won't able to download the new programs and install them, but will need to buy new Apple devices to get access to the new programs.

"I don't think Microsoft is in a position to offer Windows upgrades for free."

Bajarin acknowledges that new Apple devices are more expensive than Windows machines (the new Macbook Pro starts at $1,299), but that price tag also factors in new software updates. "The high price is justified a little bit when a customer knows that he or she is getting software updates for free," he said. "The total cost of ownership, both hardware and software, is now something worth thinking about."

But while the typical home user may be satisfied with iWork's word processor and spreadsheet programs, Microsoft Office may still be the go-to choice for people who use it for work. "Microsoft Office will still be there on Mac computers sold to enterprise accounts," said Bajarin. "But Apple isn't targeting someone that lives and dies by Word and Excel. For most mainstream consumers who only write a little bit or only have basic spreadsheets, iWork fits their needs perfectly well."

For people who aren't looking to buy a new device just yet, the upgraded versions of Apple's iWork applications are still available, though not for free. Pages, Numbers, and Keynote (Apple's iWork equivalents of Word, Excel, and Powerpoint) can be bought at $9.99 each.

Despite iWork's availability on Apple devices, Microsoft is still likely to release a version of Office for the iPad. Carolina Milanesi, a Vice President of Research for the technology firm Gartner, said that Microsoft can sell Office as a complete package of software, as opposed iWork's individual programs. "I don't think Microsoft needs to sell it for free," she said.

However, people that do purchase new devices can also extend the newer iWork apps to their old equipment. "Once you have it in the new device, you can download it for other devices you have," she said. "At that point, you own the apps and they behave like everything else in the app store."