The era of the paid-for OS has just been ended by the above image.
Eighteen years ago, the tech industry’s dominant company made nearly half its revenue selling OS licenses. Now, as Apple just confirmed, the prices of OS licenses are headed towards zilch.
Microsoft, who were once the king of the operating system in the 80s and 90s, still charges PC makers who sell the Windows OS preloaded on their desktop and laptop machines; but that business is shrinking, thanks in part to the continued success of Apple. And just last week, Microsoft announced that, much like Apple, it would not charge consumers who upgrade their machines to the latest version of Windows – 8.1.
Part of what’s going on here is that the low-cost mobile ecosystem has changed the way people think about operating system software. Smartphones and tablets have left traditional computers in the dust, and their operating systems and apps are overwhelmingly free. Upgrades to Apple’s iOS platform — which powers the company’s iPads tablets and iPhones — have long been free, as have new versions of Google’s Android mobile OS. Like Microsoft, Google supplies operating systems to outside hardware makers, but unlike Microsoft, it doesn’t charge them for the software. Phone and tablet makers can load Android on their devices for free.
As the mobile world takes off, it’s only natural that the desktop and laptop world would move towards the free model as well.
Microsoft’s OS sales once generated 47 percent of its revenue, but they contributed just 25 percent last year. Its shareholders will now be looking at a very real and very scary new world The company must make up that 25 percent somewhere else.
Source: [Wired]
