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"It gives them some wiggle room with promotions," Doherty said.Īpple also has the ability to more tightly integrate services into its operating system.
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However, he said that even as it charges most customers, Apple has the opportunity to include free service with new Macs.
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Mac but said convincing new Mac buyers, particularly students, may prove a tougher challenge. Richard Doherty, an industry analyst with Envisioneering, said he believes Apple can easily convert 10 percent of existing iTools subscribers to. Mac members would be $22 million, a fraction of the company's annual revenue of nearly $6 billion. "I certainly hope we do better than the industry average."Īt that retention rate, Apple's annual take from. "In general people have seen a 10 percent (retention rate) moving from free to paid," Schiller said. Schiller declined to say what Apple's internal target for converting its 2.2 million free subscribers to paid. In Apple's written materials for iTools the company has described them as free, but did not put a time frame on how long they would remain so. The survey also claims that Apple told Mac owners that iTools would be free for life. Mac services and keep Mac.com e-mail free. "The services for which Apple is charging are highly overpriced and not worth it," the petition reads, asking Apple to cut the price of the overall. An online petition has gathered 9,650 responses as of 10 a.m. However, some users have taken to the Web to protest the new charges, particularly for Mac.com e-mail. "I use iTools and if they would give free customer service and fix a (Mac OS X) 10.1.5 issue with uploading video, I'd probably go for it." "It's probably worth it," said Kate Bornstein, a New York-based performance artist.
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And although its software division is far more organized than it once was, it's unclear how overwhelming demand will be. To its advantage, Apple has presented a fairly coherent and tangible set of services with. In the early 1990s, Apple's efforts to form online communities and popularize search engines failed magnificently. Some have succeeded but many have struggled, especially when free alternatives lurked elsewhere. Customers have bristled when companies try to slap charges on previously free services.
The history of paid services, though, is not a pretty picture. "Now that we are out of 'life is free' 's a good deal," he said. Jobs said that even the current package of services is being offered at a fair price. And we might" do that at some point, Apple CEO Steve Jobs told reporters Wednesday at the company's new store here. "I'd love to say that for $9.99 (a month) you get everything we do. "We couldn't invest even more into it without making it into a sustainable business model," Schiller told CNET .Īpple could eventually shift more of its software to the paid subscription model, including, for example, potential upgrades to the Mac operating system. Charging will also allow Apple to continue to offer such services as well as adding new ones. Instead, the services exist to enhance the whole Mac experience, and thereby indirectly drum up business by getting people to buy more computers.
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The company also is moving into new areas, such as selling movie tickets through its revamped Sherlock 3 search engine.Īpple Senior Vice President Phil Schiller said Apple doesn't expect to generate much revenue from.
For an annual fee of $99, customers can use Apple's servers to post personal Web pages, open e-mail accounts and store files. On Wednesday, the company took another step by replacing its free iTools service with new suite called. NEW YORK-By imposing an annual fee on Web-based services that were previously free, Apple Computer CEO Steve Jobs is taking his company deeper into the murky waters of paid consumer services.Įarlier this year, Apple made a modest attempt to reap some additional fees from its customers when it allowed Mac users to order photo albums via its Web site.