Apple pushing for .Mac renewals

It was a year ago this month that Apple announced it was converting its free iTools e-mail and online storage service to a paid program, which it dubbed .Mac. At the time, Apple tried to ease the shock of the $99 annual fee by giving existing iTools customers the chance to sign up for the first year at half the price. The company also extended the deadline and offered other extras to woo paid members, eventually forcing customers to pay up by last October or lose their mac.com e-mail address.

Now, all customers will have to pay the full price to keep their accounts. Although iTools customers who converted to a paid .Mac account will have until October to renew, those who signed up for a new .Mac account last July have started receiving notices that their subscription is up for renewal.

Apple won't say what its goal is in terms of the percentage of renewals it expects, but a representative said the company has been encouraged by recent customer feedback as well as recent sales.

"We're very bullish going into this renewal period," said Joe Hayashi, a director of product marketing in Apple's applications group. Hayashi declined to say how many .Mac subscribers there are, but he said the figure has grown from the 180,000 figure that Apple reported shortly after last October's deadline.

In some cases, customers are signed up for automatic renewal, with Apple letting people know by e-mail that their credit cards will be charged $99. In other cases, Apple is sending letters asking customers to renew.

To lure those that might be on the fence, Apple is offering several incentives. Those who renew will have their choice of a free copy of The Sims computer game, a free copy of EverQuest along with a month of online play time or a $20 discount on their next Apple Store purchase.

Apple is also launching a referral service that gives a discount to existing customers who recruit new subscribers for .Mac, with Apple offering $20 to each new person that signs up.

One of the concerns that analysts raised when Apple began charging is whether the company would meet the higher reliability standards that paid customers have as compared with what customers of a free service expect. Although .Mac has had its hiccups--some recently--Hayashi said the service is doing well overall.

"In running an Internet service, various things happen," Hayashi said. "Generally, we feel pretty good about where we are from a reliability standpoint."

The company has also tried to keep customers happy with a variety of freebies over the last year, including free games, online training and free photo prints.

Apple has introduced new .Mac features over the past year as well, expanding it from primarily an e-mail and online hosting service into a way of synchronizing data among various Macs. With the next version of the Mac OS X operating system, dubbed Panther, Apple plans to allow .Mac members to automatically synchronize a folder on their Mac with their online storage.

At the same time, Panther also brings with it another upgrade charge, meaning that those initial .Mac customers who want the new feature are likely to be hit with both the $99 renewal fee and the $129 Panther upgrade cost at about the same time. Apple has not provided an exact time frame for Panther availability, saying only that it will ship before the end of the year.

Hayashi said Apple has also started to receive more requests from developers who want to link their software to the iDisk online storage or Web page publishing abilities that .Mac subscribers have. Some capabilities to tie into .Mac are available through open standards, but Apple has not yet released a software development kit.

"We're looking at doing even more," Hayashi said.