apple’s software deal strikes at microsoft’s foundation

Mac OS X, iLife, and iWorkThose who claim that Macs are more expensive than PCs should reconsider their position. Hardware product costs are roughly equivalent, but software costs are far, far lower.

At the MacWorld keynote yesterday Phil Schiller revealed a package deal for the Mac operating system (Mac OS X Leopard), its suite of consumer media production tools (iLife 09, which includes iPhoto, iDVD, Garage Band, and iWeb), and its professional office suite (iWork, which includes Keynote, Pages, and Numbers). Purchased as a package, these three products cost a measly $169 USD.

That’s an insane value.

Compare that to what you’d blow on Microsoft product. I checked out the prices on Future Shop:

Future Shop Shopping CartAfter I convert the cost of Apple’s package to Canadian dollars, there’s a whopping difference of $600. You could almost buy a brand new Mac Mini for that, or three iPod nanos, or three months worth of groceries.

But don’t let the prices fool you. iWork is every bit as good as, if not better than, Microsoft Office. And iLife, well, Microsoft’s competing fare can’t hold a candle to this brilliant suite of easy-to-use media tools. And as for the Mac OS versus Windows? That debate will rage for ages to come. But you know where I stand.

Apple is striking at Microsoft’s bread and butter with this package deal. The Redmond behemoth will live and die on its Office suite and Windows revenues. If Apple begins to start having an effect on their market share with a comparable set of tools at far lower prices, that’s going to effect Microsoft’s bottom line.

But it’s not just Apple going after Microsoft here. Sun, Google, and Corel all have competing sets of free and low-cost office productivity software that are grinding away at Microsoft’s dominance.