Tim Cook to Ballmer: "Steve, I didn't know what to get you as a retirement gift. So here's the destruction of your business model. Enjoy."— danprimack (@danprimack) October 22, 2013When I wrote the following in September, I had no idea just how far Apple would take the strategy I have been outlining for the past year:
Apple doesn't need to profit on iWork. It just needs to make iWork so good and so accessible, that it eliminates the one remaining factor that differentiates Microsoft from Apple, and keeps millions of individuals and businesses hooked on PCs they're hardly excited about being forced to buy.In far fewer than 140 characters, TheStreet's Tech Editor Chris Ciaccia said it best:
Mavericks is free!!! Wow!!!— Chris Ciaccia (@Chris_Ciaccia) October 22, 2013Not to mention the fact that, on Wednesday, Apple announced and released its first major iWork refresh since 2009. And, oh by the way, the software is now free in both desktop and mobile environments. Actually, to get free iWork (as well as iLife software) on a Mac you'll need to be running OS X Mavericks, which, Apple is now offering at no cost. As I have argued, Apple is a hardware company, meaning Apple makes its money, its profit and its margin off of hardware. Software helps drive these otherworldly metrics, but Apple does not conceive platforms such as Mavericks, iOS 7 and all that they contain to generate direct revenue. Instead, they drive sales of iPhones, iPads, MacBooks and Mac desktops. Apple murdered a deaf, dumb and blind BlackBerry as employees insisted to lackeys in IT departments they wanted to BYOD (bring your own device). In other words, people got tired of carrying two devices -- one for work and one for personal use. RIM management had no idea what was going on, while the company's mindless bulls cited security as BlackBerry's advantage. We know what happened there. Now, the same type of narrative continues to play itself out with relation to Microsoft and Windows. Apple has already made considerable inroads with iPhones and iPads in the enterprise (as well as education markets). It's not going to be all that difficult for Apple salespeople to convince companies, particularly those with the types of employees who use Apple products -- from mobile devices to Macs -- to ditch Microsoft and the attendant junk for premium Apple hardware and FREE Apple software. Why would any company in its right mind pay another fee to license Windows when it can switch to a superior operating system at no cost and, as they did with their workers' mobile devices of choice, come into line on the laptop and desktop? Poke fun, but check yourself. Microsoft will make the same mistake BlackBerry did. It will not take this Apple threat seriously. But, even if it does, it won't matter. There's no way -- barring some sort of miracle (like Steve Jobs rises from the dead and replaces Steve Ballmer as MSFT CEO) -- Microsoft can regroup to fend off a salvo Apple started tossing months and months ago. Like Jim Balsillie and Mike Lazaridis, Ballmer and his crew didn't see it coming. Now it's simply too late to do much about it other than your best to mitigate the inevitable damage. Follow @rocco_thestreet -- Written by Rocco Pendola in Santa Monica, Calif.