Apple has been pouring resources into consumer software for years, but initially the company gave away the fruits of its labor. The giveaways were justified as a means of differentiating the Mac from its Windows-based rivals. More recently, though, Apple has been making the case to its customers that it needs to bring in revenue from its software efforts in order to keep investing in new development.
"This is also a business for us. We want to develop these apps very actively," said Peter Lowe, Apple's director of marketing for applications and services.
Last year, the companyseveral of its titles as a $49 bundle called iLife, but--after some deliberation--it decided to continue with . Times have changed, however. , iMovie and iPhoto now are available only through the paid iLife suite, although the iTunes jukebox program will remain a free download for both Windows and Mac users.
Apple will continue to offer iLife free with a new Mac, so that it can tout the software as a selling point over Windows-based systems and as a good reason for existing users to upgrade their machines.
The trend toward charging for once-free software began when Applefor .Mac in 2002. A more basic set of services, dubbed iTools had been free.
"We recognized the need to move to a more rational business model," Lowe said in an interview at this week'shere. "Our customers seemed really happy in the end."
Indeed, despite an, Apple managed to sign up more than 100,000 .Mac members. And this year, when the first of those subscriptions came up for renewal, more than . (Apple's renewal rate does benefit from the fact that some customers have their accounts set to automatically resubscribe each year.)
Apple is clearly not alone in shifting from free to paid services, a move that was precipitated for many companies by the collapse of the dot-com boom.
In an attempt to ease the shift, Apple is trying to offer more with the paid version of iLife than it did with the standalone applications, much as it offered freebies and improvements when it started charging for .Mac. Over the past year Apple has better integrated the separate programs and it is now adding a fifth title, a music recording program called GarageBand, to the suite.
Along with adding GarageBand, Apple is upgrading iPhoto, iMovie and iDVD. The photo-editing program is now faster, better able to index photos and has new editing effects. New themes have been added to iDVD, while iMovie boasts improved editing abilities as well as new titling options.
Still, some Mac users complain that Apple is asking too much of its owners. Paid upgrades to Mac OS X cost $129 and have been coming, on average, about once a year. The .Mac service, required to take full advantage of many of Apple's efforts, costs $99 a year and now there is the $49 fee for iLife. Apple CEO Steve Jobs, however, pointed out in Tuesday's keynote address that Windows users would pay several hundred dollars for a comparable collection of music, photo and video editing software.
Kory White, a software programmer for Santa Rosa-based Tritechdivas, a Mac and PC support firm, said she balked at paying for .Mac when Apple started charging last year. However, White said she probably would pay for the iLife suite, especially considering the addition of GarageBand.
"For 49 bucks, yeah, I'd do that," said White, a music fan, who said she has played in a number of bands.