While Microsoft chases Yahoo, here's how Apple can win
Google didn't get where it is today by charging end users for software and charging them again and again for endless upgrades.
Back in the early Macintosh days (i.e. the mid- to late '80s), Apple used the OS to sell hardware. Upgrades were free.
Today, Apple sells music at 99 cents a track, but what they're really selling is iPods, iPhones, iMacs, and any other damn thing they can slap an "i" in front of. And while the music is available in 99-cent increments, the iTunes software -- which runs in Windows and OS X -- has always been free. iPods would've never gotten to be such a huge business in any other way.
It's no different for the OS.
With that in mind, Apple wins on the desktop -- and crushes Microsoft -- in one way:
Make OS X free -- or very cheap. And make it run on Windows-compatible PCs.
Everybody wants that new MacBook Air. They'll still want it, even if they can also run OS X on a crappy PC. While not getting $129 for each OS X upgrade, Apple would get market share, still move a whole lot of hardaware. And they would gain that all-important "mindshare."
Most people have heard of Linux, but few have seen it on the desktop, even though they "use" it every day when they browse the Web. Most have seen OS X, a significant portion have used it a bit, and a few are rabid fans.
And while I'd like to see OS X go free and open-source, I won't hold my breath on that one. As I said above, I'd prefer -- at a minimum -- that Apple port OS X to Windows PCs, i.e. make a native version that installs from CD and runs on non-Apple hardware.
But even making new versions of OS X free for Apple hardware would prompt more users to upgrade the software. When running the latest and greatest gets slow, they'd be more inclined to buy new hardware, most likely from Apple.
Right now I'm still running my 2003-era iBook on OS X 10.3. I saved $129 twice by not upgrading to 10.4 and 10.5. I can't even use Apple's newest Safari browser because it doesn't run on 10.3. Firefox does, so that's what I use. As a result, Apple misses out on any browser-generated ad revenue. Would 10.5 run well on my laptop? Who knows? I sure don't want to spend $129 to find out.
By flooding the market with a free or very cheap OS X, Apple could blunt the effects of Microsoft Windows, which customers pay for but don't really feel they're paying for because the cost is bundled into just about every PC sold.
Even if a free OS wouldn't fly at Apple HQ, if the company still ported OS X to Windows-compatible PCs, they could -- and should -- compete with Microsoft when it comes to pre-installed operating systems on non-Apple hardware.
Imagine if you could order a PC from Dell with Windows, Linux or OS X ... there would be real competition for the hearts and minds of computer users everywhere from the home to the enterprise.
And since Apple's hardware is so ultra-cool (and ultra-pricey), they'd probably sell even more of it if OS X had a much larger of the overall worldwide OS pie.