Why OS X costs twice as much as Windows

Why OS X costs twice as much as Windows

Summary: Because people are happy to pay it. Microsoft's continuing Vista woes, including price cuts and a retreat to Windows XP on the low-end, obscures an important fact: Mac users pay more than double for Mac OS X than Windows.

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Because people are happy to pay it. Microsoft's continuing Vista woes, including price cuts and a retreat to Windows XP on the low-end, obscures an important fact: Mac users pay more than double for Mac OS X than Windows.

Are Mac users mindless robots, buying whatever Cupertino ships, or is Vista really 50% inferior?

Update: What this shows is that people are willing to pay good money - 2X more than Microsoft is currently charging - to get stable, feature rich, user-friendly software. Why can't Microsoft do that? End update.

Let's run the numbers. Since Windows XP's release in October, 2001 Mac users have had four releases of OS X:

  • Jaguar 10.2 released August 2002
  • Panther, 10.3 released Oct 2003
  • Tiger 10.4 released April 2005
  • Leopard 10.5 released Oct 2007

At $129 a pop your loyal Mac user paid $516 for new OS releases. There is no "upgrade" pricing for OS X.

Over the same period the steadfast Windows user would have spent a paltry $219 - had they waited for the Vista price cut - for an upgrade to Windows Vista Ultimate - less than half what Mac users spent.

You can get Vista and an Xbox for less than Mac users paid for OS X alone!

Mac OS 2X This isn't an academic question. OS X upgrades are popular with the Mac faithful. Many gladly fork over the money.

Less than 2 years after Tigers release, Steve Jobs, Apple's CEO, announced that 67% of the 22 million Mac OS X users were using Tiger. Compare that to Vista's 15% penetration 14 months after announcement. Ouch!

What accounts for the difference? Why are Mac users happy to pay double while Windows users are demanding downgrades to XP?

The chief reasons:

  • New releases are stable. There is little penalty for buying the latest and greatest.
  • Obvious value of new features. In Leopard, for example, Time Machine replaces backup software that might cost $30 - and that most people weren't buying anyway. Many other features, such as data detectors, Quick Look and PDF editing, make using the system more productive.
  • Cool new apps appear with every new release. Software vendors use added OS features to build low-cost cool new apps like Pixelmator, a low-cost Photoshop for the rest of us.
  • It's easy. Buy the box, pop in the DVD, a few keystrokes and your upgrade is underway. No activation hassles. Existing apps still work, as do drivers. What's not to like?

It's like getting a new computer for $129.

The Storage Bits take Microsoft is leaving a lot of money on the table. Apple proves that by delivering value - instead of problems - computer users will happily fork over twice as much as Microsoft can get for Windows today.

Microsoft's focus on OEM sales is part of the reason they've lost sight of what users really want. When Vista slipped past Christmas 2006 all the focus was on how this would hurt Dell and HP - not users.

In fact, users would have been helped if Vista had slipped another 6 months. Instead the PC industry conducted, in effect, a giant paid beta test on millions of trusting buyers.

Microsoft shareholders need to understand that the current management team's decisions are killing shareholder value. Nothing will change until the management does.

Comments welcome, of course. If you didn't get Vista on a new system, would you pay to upgrade your current Windows machine?

Topics: Software, Apple, Hardware, Microsoft, Operating Systems, Windows

About

Robin Harris has been a computer buff for over 35 years and selling and marketing data storage for over 30 years in companies large and small.

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261 comments
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  • Not my experience

    Upgrading to Tiger from Jaguar, the computer (iBook) wouldn't boot. Had to reinstall and then had to move the user folder. No loss of data but a big loss in time.

    I've also had this happen during patch process.
    DevGuy_z
    • Simple market saturation

      to keep "computing knowledge" that Windows is all that computing is.

      Silly post really.

      Heard of FOSS Microsoft? Muhahahahahahahahaha!!!!!!!!
      fr0thy2
      • Like iPods...

        ...
        ItsTheBottomLine
        • Yes - and No, BasedOn

          iPods managed to dominate the digital music player market by a combination of elegant design, being in the right place at the right time with the right product...and taking Apple's "walled garden" concept to a whole new, and sometimes disturbing, level. I still don't understand why Apple doesn't offer Windows-only media formats to play on iPods as well as AAC, MP3 and MP4 - while I know M$ might have had a hand in this originally by refusing to license the formats to Apple, by now they'd be crazy not to (unless you want to claim the Zune has actually proven to be an "iPod killer"!).
          drprodny
          • But the Zune IS the iPod killer <nt>

            [b]
            nix_hed
    • The move from Tiger to Leopard was a pain...somewhat...

      This was the only time I've had to do a clean install. Otherwise, moving from version to version of OS X was painless and nothing ever broke.
      nix_hed
  • So the industry is partly to fault

    in both products released and price point willing to pay by majority and minority players in the game of big business. Good thing there are free OS that cost the consumer no need to play the industry game or the point release pay tolls.
    Boot_Agnostic
  • More Closed??

    Nearly half of OSX is all open source. Freely available for download, including the code. The *ONLY* proprietary part is the GUI that lies on top, and a few key underpinnings such as Core technologies (CoreGraphics, CoreVideo, etc).

    Now when you look at MS, sure we MSDN people have access to small bits of code. Some more than others. But the average joe has access to NONE of it.

    I do agree somewhat on the last bit. Each iterartion has more and more newer technologies. This can mean new software only runs on the newest OS because the previous did not have the required features. But generally older OSX apps run fine on the newer one.
    Stuka
    • It is a closed OS

      It is the only modern OS that is closed to any hardware not built by the manufacturer. The sad thing is that this isn't due to some inherent incompatibility between OS X and Dell but is because you [b]paid[/b] Apple to insert a Palladium style TPM DRM chip in your Mac and you [b]paid[/b] Apple to write code in OS X that will refuse to run unless it finds this Palladium style TPM DRM in the computer it was installed on.
      NonZealot
      • if only that was true...

        trying to throw around DRM buzz words?

        Apple OS only checks your hardware on install and boot... not every piece of software and not all the time. Its also easy to disable, or haven't you seen all the hacked versions of OSX people run on non-Apple hardware?

        and on the DRM note.. no matter how much loud people online keep trying to spout "DRM = Evil" its just not true... there is nothing wrong with DRM, and it existed well before the term DRM was coined, even in OSes. DRM only got a lot of vocal internet scorn when thieves found out it was going to be much harder to steal things.
        doh123
        • if only THAT was true

          [i]when thieves found out it was going to be much harder to steal things.[/i]

          The "thieves" aren't slowed down one bit, the ones who make and SELL illegal copies. The only ones that it is harder for are paying customers who can't make a copy for the car, etc.

          Besides, it has nothing to do with thieves, as no physical property is removed, but has to do with copyright infringement.
          Mike Hunt
          • your..

            your definition of stealing might be different than mine, I include taking something that isn't yours and using it, wether it deprives someone else of it or not... doesn't have to be physical property.

            Making something harder, isn't the same as making something impossible. Thieves come in all shapes and sizes, not just that want to make a profit, but just want something for themselves. If you use someone elses property licensed to you in ways they don't allow, and think thats wrong that they don't allow you to (like take it to your car), then don't license the product. People only hate on DRM because they don't like to be told what they can and cannot do, even if the actual owner of the stuff your using has every right to tell you what you can do with property that is NOT yours. If you don't like the terms, don't use it.
            doh123
          • Copying is not the same as stealing

            Throughout all of human history, until very recently, copying and stealing were treated as different things. If you have a loaf of bread and I steal it you go hungry. If you sing a song and I copy it we both get to sing. There may be good practical reasons for having copyright laws, but it is simply a mistake to justify those laws by invoking the ancient and universal prohibition against stealing.
            hummingfrog
          • @hummingfrog

            If I have 100,000 loaves of bread, and I manage to take your ONLY loaf of bread, that's called profit in this day and age.
            fr0thy2
          • Let me clarify, not my definition

            No one has been prosecuted or sued for "stealing" any music or video from the net. They have been sued and prosecuted for copyright infringement, having illegally downloaded copies of someones work. These people are not stealing or competing from/with the RIAA or artists. There are pirates, or infringer's out there that make illegal copies and sell them as legit, and make money that should go to the owners.

            The former are not criminals, the latter are. DRM has done nothing to stop the latter, but has hampered the former.

            The law says that I have a right to make a copy of a show or CD or video for my own personal use, DRM prevents that in many cases. DRM has never, and will never stop the pirates.

            Like I said afore, yer statement weren't true, even ifn you all try to play wif the English language, it still ain't true. :)
            Mike Hunt
          • @Mike Hunt

            Yup, the American mentality has two choices : Own the whole world via hell or high water, or rethink what on earth it thinks it is doing ... (the brainwashed surfs don't matter)
            fr0thy2
          • Frothy, can you translate

            I'm not being facetious, I really didn't understand your post. :)
            Mike Hunt
          • Re: Stealing...

            its not I who is changing English by calling it stealing, it is you who are ignorant, or changing it, when you say its not stealing. Stealing is theft, theft does not have to be a physical item. Try some dictionaries as well.

            http://dictionary.reference.com/browse/stealing

            steal Audio Help /stil/ Pronunciation Key - Show Spelled Pronunciation[steel] Pronunciation Key - Show IPA Pronunciation, verb, stole, sto?len, steal?ing, noun
            ?verb (used with object)
            1. to take (the property of another or others) without permission or right, esp. secretly or by force: A pickpocket stole his watch.
            2. to appropriate (ideas, credit, words, etc.) without right or acknowledgment.

            I wont paste past number 2 for that entry, even though it has more entries.
            doh123
          • @fr0thy...reply to yours to Mike...man your a funny little twit

            Well Actually your country had that idea first. And well we kicked your butts - TWICE. And showed freedom. As far as world domination, I think you better check other places than the US. Like your own back door. Get out of your mothers basement, and get a real life your are just too much fun to read. You could make some serious Euro's writting this tripe. But then again I forget the newpapers you have everyday.
            ItsTheBottomLine
          • to: Mike re; foam boy (fr0thy)...he's a child

            just read his posts. He still lives with his Mum in the UK. Go back and read his posts...he's actually very,very funny to read.

            Obviously lives in a very sheltered world.
            ItsTheBottomLine