AppleInsider tells us that Apple is considering underpricing the next version of Mac OS X, due this summer:
This source, who has an unproven track record, claims that Apple higher-ups were pushing for an aggressive price point on Lion — an approach the company already employed with great success when Mac OS X 10.6 Snow Leopard launched in late 2009. Snow Leopard debuted with a $29 price tag, and that strategy resulted in sales that doubled the previous record-setting launch of Mac OS X 10.5 Leopard.
The article goes on to note that Apple software released through the Mac App Store is often significantly cheaper than the same software’s boxed retail version, so there is a further precedent should Apple decide to go this route.
I plan to upgrade to Lion no matter what it costs, so I’d be delighted to get it for $20 rather than the customary $129. However, there are a couple of reasons why I won’t think this will happen:
1. Cheap now, cheap forever
It’s easy to make a product expensive and then gradually reduce the price. It’s much harder to start cheap and then get more expensive. Apple may not be forever inclined to effectively give away major releases of their operating system. It’s generally a bad idea to “train” the market to expect high value at cheap prices. Which leads me to the next reason:
2. Perceived value
Have you ever shopped for wine and found yourself selecting the second-least-expensive bottle? We like things to be cheap, but not too cheap, especially when it’s something to be enjoyed; we don’t like to feel as though we’re skimping on our own pleasure. Apple, of course, is all about perceived value, and their computers are marketed not just as powerful tools but as fun to use in themselves. Along with industrial design and a certain aspirational, clever-but-not-hip advertising approach, price has been one of the chief means by which Apple sets its products apart in the market. It’s not that the products are overpriced, for they usually compare quite favorably, even aggressively, with products of similar calibre. It’s that Apple doesn’t make cheap stuff. Even the entry-level Apple products, like the iPod shuffle, have a certain robustness and elegance that communicates that they were made with care — and not cheaply. (Apple got away with underpricing Snow Leopard by explicitly managing expectations. It was clear from the get-go that there was not a lot of user-directed innovation in that release.)
So I am guessing that Mac OS X 10.7 Lion will appear on Apple retail shelves for the customary $129, with the App Store version (it seems increasingly certain there will be one) offered at a modestly reduced price, say $79. If you’re selling “the world’s most advanced operating system,” after all, you ought to charge what it’s actually worth.