By releasing its operating system more often and at a slightly higher cost, Apple Computer is better able to maximize its profitability in the OS field compared with its rival, Microsoft.
That conclusion is according to a new analysis released Aug. 28 by Gene Munster, a senior researcher at Minneapolis-based Piper Jaffray & Co.
Since 2001, Apple, of Cupertino, Calif., has released a new version of its operating system about once a year. These new versions cost users either $129 for the full version or $107 for an upgrade.
Microsoft, on the other hand, averages a little more than two years between releases of its Windows operating system. The average cost to users for a full upgrade is $114 or $48 for an upgrade.
The result, Munster writes, is that Apple is better able to maximize its profits compared with Microsoft by getting its product to the marketplace much faster and charging slightly more in order to take advantage of its users enthusiasm for the companys products.
Apple users are willing to pay each year for the latest OS upgrade and the company is better able to use its marketing savvy to entice its customers with new features, such as iChat or Spotlight search technology, Munster writes.
/zimages/3/28571.gifClick hereto read more about Apples new Leopard OS.
“We believe that Apples OS pricing strategy is in line with the companys overall strategy; Apple users are willing to pay a premium for hardware and software built for the Apple platform, enabling Apple to expand profit margins,” Munster wrote.
Apple has also been able to take advantage of the five-year delay by Microsoft in releasing the Vista OS by continuing to release new versions of its own OS almost every year.
At the same time, Apples Macintosh line has undergone a resurgence thanks to desktops and notebooks based on Intel processors.
“Given Apples ability to drive greater revenue per customer versus its competitors through sales of peripherals and frequent OS updates, Mac market share gains will mean more to the company than simply increasing Mac revenue,” Munster wrote.
The analysis compared all the Apple OS releases since March 1, 2001 with Microsofts releases that started on June 25, 1998.
Microsoft is scheduled to release Vista by the end of 2006, while Apples new OS, called Leopard, is scheduled for release sometime in the first half of 2007.
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