I believe the logic for Apple is that usage of the products determines their value and therefore placing powerful software in the hands of more users means they will value the entire system more. This leads to the notion of greater “stickiness” or “lock-in” but also to higher satisfaction and loyalty, rate of upgrades and even more third party purchases and yet more usage.
This is the virtuous cycle platform custodians seek to engender. This is what Apple is trying to build and the transition of apps into the system bundle is part of this re-enforcement.
One wonders how long before Apple’s approach becomes the norm for other platforms.
Marco Arment thoughts on free as a business model in the light of Google Reader shutting down:
In other industries, this is called predatory pricing, and many forms of it are illegal because they’re so destructive to healthy businesses and the welfare of an economy. But the tech industry is far less regulated, younger, and faster-moving than most industries. We celebrate our ability to do things that are illegal or economically infeasible in other markets with productive-sounding words like “disruption”.
Much of our rapid progress wouldn’t have happened if we had to play by the rest of the world’s rules, and I think we’re better off overall the way it is. But like any regulation (or lack thereof), it’s a double-edged sword. Our industry is prone to many common failures of unregulated capitalism, with the added instability of extremely low barriers to entry and near-zero cost per user in many cases.
Via Daring Fireball
Reading Cap Witkins’ essay “Death of the Free Web” I have a though that the once rogue 37signals-ish view, that there should be more web apps build for profit, is going mainstream? It’s about time, I suppose.
We’re discovering that you can’t create that sort of passion with free.
And so we’ve begun searching for and creating services that not only solve problems, but also solve them in a way that puts the customer first. In doing so we’re creating smaller, but more lasting and passionate communities of people that believe not only in the products, but in the vision and principles behind them.
The free web is dead. Good riddance.