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Why OS X Can't Be Free?

cambookpro

cambookpro

macrumors 604
Original poster
Feb 3, 2010
7,237
3,400
United Kingdom
Hi,

I remember reading that due to some law, Apple can't make OS X free, and they had to get round it somehow when making iOS free.

Thing is, I'm trying to explain this to a friend, but can't find where on earth I read this :eek:

Any help finding the law/a website where it says this, and also what loophole they used for iOS?

Unless I'm making it all up in my head :p

Thanks
 
My understanding is it has to do with the way Apple reports revenue for the iPhone vs. revenue for Macs. There is an article here that explains it.
 
There is no law that says it can't be free. The reasoning that was given for "needing" to charge for updates in the past was related to accounting.

Because of the way that Apple chooses to account for Macs (booking all the revenue at the time of sale), they "need" to charge for OS updates in order to account for the costs of future (significant) updates in subsequent quarters.

In the past, the alternative was to book the revenue across several quarters (as they originally did with the iPhone). This choice is very confusing for investors as only a small percentage of revenue is reported at the time of sale. For instance, with the iPhone, only 1/8 of the revenue that Apple received from iPhone sales was reported in the quarter each iPhone was sold. The rest of the revenue was spread out over two years.

However, in the last couple years, these accounting rules have changed. Apple now only has to delay reporting a small percentage of iPhone revenue to account for significant future updates. They could do the same thing for Macs if they wanted to and give OS X away for free.
 
cambookpro said:
Apple can't make OS X free,
Click to expand...
Apple gives away as "free" all sorts of software. Significant parts of OS X are also given away free as open source software -- the Darwin framework (the core OS on which OS X and iOS is based), CUPS (printing system), WebKit (used by Safari and other browsers).

Apple sells hardware.
 
Ok, thanks for clearing that up, as I said, could only faintly remember reading about it.

Thanks for everyone's help.
 
Fishrrman said:
Why can't _everything_ be "free", for that matter ?? ;)
Click to expand...
Yeah. Software writing, like being a designer, musician or a writer should just be a hobby, not a career. You can make the money on the T-shirts and branded merchandise, though. :D
 
Fishrrman said:
Why can't _everything_ be "free", for that matter ?? ;)
Click to expand...

I think it was more or less a question regarding some accounting reasoning behind not making it free and not really a complaint about it not be free. At least that's how I read it.
 
benwiggy said:
Apple gives away as "free" all sorts of software. Significant parts of OS X are also given away free as open source software -- the Darwin framework (the core OS on which OS X and iOS is based), CUPS (printing system), WebKit (used by Safari and other browsers).

Apple sells hardware.
Click to expand...

CUPS wasn't started by Apple, nor was WebKit (which derives from KDE's KHTML) and Darwin is based on some sort of *BSD as well. Other people gave it away, Apple is using and contributing to it, though.

Before Lion, OS X was distributed on CDs and DVDs. You needed to print them, ship them etc. Apple didn't make billions off $29 Snow Leopard DVDs.
As for the $129 Leopard DVD, you did think twice about buying a new $500-1000 Mac instead. Have you seen lots of Core Duo Macs lately? Me neither.
 
Last edited:
Giuly said:
CUPS wasn't started by Apple, nor was WebKit (which derives from KDE's KHTML) and Darwin is based on some sort of *BSD as well. Other people gave it away, Apple is using and contributing to it, though.
Click to expand...
Indeed. They paid for the ownership of those projects, and still offer it as open source.
 
cambookpro said:
Hi,

I remember reading that due to some law, Apple can't make OS X free, and they had to get round it somehow when making iOS free.
Click to expand...
There's no law that prevents apple from making OSX free, in fact any company can choose to give away their products. If there was they could literally sell it for $.01.

No there were regulations detailing how apple could recognize revenue over 2 years, i.e., subscription accounting. There's no way for apple could to do that for desktops.

So it was in their best interest (tax and revenue recognition) to consider the iPhone a 2 year purchase and offer it as a subscription and not compelled by laws
 
So you people mean that Apple could have given away OSX major versions for free if they could help it?
 
printz said:
So you people mean that Apple could have given away OSX major versions for free if they could help it?
Click to expand...

If Apple wanted to, yes, they could give OS X away for free. But that doesn't really make economic sense, since up until Mt. Lion, Apple was still producing a physical media for customers to buy, that had to be printed/shipped etc. Nowadays, the price is much less influential on the profitability of the software.
 
jessica. said:
I think it was more or less a question regarding some accounting reasoning behind not making it free and not really a complaint about it not be free. At least that's how I read it.
Click to expand...

Yes, I'm not complaining (Mt Lion was a bargain!), just wondering.

Thanks for the clarification everyone.
 
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