Apple’s Software as a Service Strategy

on October 24, 2013

We have had one focus since the beginning. To build the best personal computers in the world that people love to use. –Tim Cook

It is easy to look at Tuesday’s event from a hardware only viewpoint and miss the significance. However, if you view Tuesday’s event through the lens of personal computing more clarity emerges. Hardware is the beautifully designed tangible object. But it is the software that turns that beautifully designed tangible object into an empowering tool called a personal computer.

Apple is a hardware company that is true. They are also a software company. However, they don’t want to just sell you hardware or software. They want to sell you an experience. That experience is fueled by their ecosystem.

There were a number of things hardware-wise to be excited about. The new Mac Pro and all its innovations are best in class. The new iPad Air is the thinnest and lightest full size tablet on the market. The iPad Mini now with Retina display and A7 processor is a ton of amazing tablet for only $399. As important as the hardware is the software is the compelling part of the narrative and Apple’s vision for advancing personal computing.

Consistency and Ecosystems

When we look at Apple’s hardware across different segments we notice very distinct design themes. The iPad Air and iPad Mini follow the same design language. The MacBook Air lineup follows the same design language. The MacBook Pro lineup follows the same design language. What I saw today with iLife and iWork is that now apps across iOS and OS X follow the same design language.

Many of the new iLife and iWork apps look like desktop class applications. GarageBand for iOS supports up to 32 tracks of audio. iMovie can create and implement many more desktop class transitions and effects as well as run picture-in-picture video during editing. The new iLife and iWork apps for iOS take creativity and productivity on tablets to new levels. They are not only powerful but also similar in look and feel to their OS X counterparts. This makes for a seamless jump over to OS X should consumers use multiple devices in their digital life. This also strengthens the case for a potential new Mac owner should this consumer also be in the market for a new PC.

The story to me was a consistent experience around personal computing. Apple is bringing a consistent software experience across the screens in their hardware portfolio. In the post-PC era consistency matters. Consistency will be valued.

Software as a Service For Personal Computing

Apple has put pressure on Microsoft by bringing iWork to consumers for free. For most mainstream consumers iWork is more than sufficient. iLife has always come pre-installed on Macs but is now free as well and nothing like the iLife suite exists in the Windows ecosystem at any price point. However, Apple has raised the bar by making OS X free. That one will be tough to compete with.

What is amazing is that a company who is strengthening the power of their ecosystem through software is able to do so by offering this software experience for free. Apple’s hardware may cost more but you are also getting more from a software standpoint. Consistency in OS updates, app updates, and more is now free. Not to mention best in class customer support. This can not be overlooked or underestimated. This is the vertical advantage.

Consumers now know that an investment in Apple’s hardware is an investment in future software upgrades at no additional cost. The value of the software is now built into the value of the hardware. Apple is telling customers that they are committed to bringing them quality software as a service to their quality hardware. This is Apple’s vision for personal computing.