Apple (AAPL) Unveils Free OS at iPad Event, Microsoft (MSFT) Drops

NEW YORK (TheStreet) -- Though much of what Apple (AAPL) revealed at Tuesday's event was as expected, one surprise takeaway was the tech giant revealing that its updated operating system OS X Mavericks and productivity suite iWork will be available free of charge.

Along with its launch of the iPad Air and iPad Mini, the iPhone maker announced that the refreshed operating system will be available for download immediately through the App Store, free to Mac users with OS X Moutain Lion- or Snow Leopard-enabled hardware. For OS X Server (a multi-user business platform), there is a $19.99 upgrade charge.

Unlike rival Microsoft (MSFT), which sells Windows 8.1 and Pro for $120 and $200, respectively, at retail, Apple seems content with its strategy of giving the intangibles away for free to drive hardware sales. In response, Microsoft shares dropped 1.17%, with its biggest falls of the day coinciding with the Apple event.

Mavericks, modeled on the iOS 7 for the iPhone and iPad, introduces 200 new features, including iBooks (which syncs a user's books and reading activity across all iCloud devices) and Apple maps. It also improves the performance and battery life of the Mac.

"We want every Mac user to experience the latest features, the most advanced technologies and the strongest security," said Craig Federighi, Apple's senior vice president of software engineering, in a statement. "We believe the best way to do this is to begin a new era of personal computing software where OS upgrades are free."

Shares of the Cupertino-based company dipped 0.29% at market close, but have since gained 0.25% in after-hours trading.

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