Apple: Why not set .Mac free?

Summary:The Macworld Steve Jobs keynotes are a good way to start the year. Jobs tends to set the bar for what the user experience should be for computing devices, providing perspective on what others are doing to make the human-computer interface less one sided.

The Macworld Steve Jobs keynotes are a good way to start the year. Jobs tends to set the bar for what the user experience should be for computing devices, providing perspective on what others are doing to make the human-computer interface less one sided. Google and Yahoo could certainly take a lessons in how to make software that is really user friendly and works seamlessly together. Microsoft has been taking lessons for years.

But the Web portalists--led by AOL, Google, MSN, Yahoo--could teach Jobs a few things

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 about delivering Web services. Apple's Web portal, .Mac, has about 1 million members at $99.95 per year or using the Family Pack, which includes five members for $179.95, Jobs said during his keynote. That's a small percentage of the Mac user population, but a decent revenue stream. By comparison, Yahoo claims 450 million users, including more than 200 million registered users, and more than $5 billion in 2005 revenue.

The individual .Mac membership includes 1GB of storage and 10GB per month of data transfer. The Family Pack membership includes includes 1GB of storage and 10GB per month of data transfer for a master account and 250MB of storage with 3GB per month of data transfer for four sub-accounts. Apple also offers a free for 60 day test drive and the service is available  in English, French, German, and Japanese.

Of course, .Mac requires a Mac and promotes Apple's nicely appointed walled garden and has deep integration with iLife applications and the Mac OS. .Mac isn't an operating system neutral play other than for accessing files, standards-based data (MAPI, iCal, RSS, etc.) from a PC.

Nor is .Mac a Web portal with all the external content and Web services--a missed opportunity. It has many of the applications that users get for free on other services and with more storage capacity. Apple charges $99.95 for .Mac because it can, but millions of loyal, fanatic Mac users are not using .Mac Mail or iPhoto and instead have well Gmail, Yahoo Mail, Flickr etc. Why should they pay Apple for email and bunch of other ancillary services.

The other .Mac components--photocasting, Web page, podcasting and blog authoring (via iWeb and GarageBand) iDisk (file transfer), .Mac Backup (online storage), Mail, Groups and Sync, which keeps data such calendars, bookmarks, and mail, up to date--work nicely together, but don't offer a rich online experience compared to what Yahoo is doing with social media and tagging or companies like 37signals are doing with Web applications.  Of course, software not somehow tied into the Macintosh platform isn't of great interest to Apple.

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It's probably against Jobs' aesthetic sensibility to litter pages with ads like the Web portals or to deliver on demand Web applications that don't have all the slick features he so rigorously champions. But the Web portals are soaking up billions of dollars and billions of users with mostly "free," ad-supported services. Even Microsoft is gearing up to compete for those ad dollars online and building applications (including downloaded applications, such as earth maps tied into local data) tied back into an ad engine.

Apple still has a boutique mentality, as represented by .Mac and the Apple stores. Business is booming now, the stock has soared, so why rock the boat with ad-supported software. Apple doesn't want to see ads for Dell or Victoria's Secret on .Mac.

Think of what .Mac could be if you take away the $100 barrier to entry, invest more in developing online applications and open it up to play better with the rest of the world. That doesn't mean Apple shouldn't charge a fee for some its services. The reality is that Apple could probably make more money by starting with a free service and then accrue monthly fees from tens of millions of users for additional storage for files, blogs, mail and photos and some advanced services.

Customers will buy the Mac because of the user experience (and fewer vulnerabilities), not for the .Mac experience, which seems more like an extra cost at the time of purchase, despite the 60-day free offer. It wouldn't take that much to turn .Mac and iLife into selling points for the Apple's systems, just as the iPods and iTunes for Windows have extended the brand, that attracts users beyond the converted.

Topics: Apple

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