Apple ups ante, offers operating system free

Apple vice-president Philip Schiller introduces the new iPad Air. Photo by Reuters.
Apple vice-president Philip Schiller introduces the new iPad Air. Photo by Reuters.
Apple hit the market running yesterday with a raft of press releases about new products as it competes to regain some of the market share it has lost to Android devices.

Slimmer, lighter, more powerful and, in some cases, free products were at the fore, just two days before the new iPhone5 and iPhone5c are released at 12.01am tomorrow. Apple unveiled a slimmer version of its top-selling full-size tablet computer, dubbed the ''iPad Air'', along with a revamped iPad Mini with an improved high-definition display.

The new iPad Air is 43% thinner than the version it replaced, weighed just 450g, and was ''screaming fast'', Apple vice-president Phil Schiller said at an unveiling yesterday.

Apple also showed an upgraded iPad Mini, which has high-definition retina display, along with faster computing power and graphics.

The two new iPads will be sold alongside the existing versions, starting November 1 in countries including New Zealand.

The iPad Air, with Wi-Fi models, would start at $749 for the 16GB model, up to $1199 for the 128GB model. The iPad Air with Wi-Fi and cellular would be available for a recommended price of $949 for the 16GB model, up to $1399 for the 128GB device.

The new iPads came on the same day Microsoft began selling an upgraded version of its Surface tablet, and Nokia unveiled its own tablet computer.

Industry tracker Gartner on Monday forecast global tablet shipments would reach 184 million units this year, a 53.4% rise from last year.

The iPad remained the largest-selling tablet, according to surveys, but its market share is being eroded by rivals using the Google Android operating system.

Apple also updated its MacBook Pro with retina display with fourth-generation Intel Core processors, the latest graphics, longer battery life, faster flash storage and next generation Wi-Fi. The new MacBooks started at a new lower recommended retail price of $1999 and were expected to be available yesterday.

Apple would give away operating and work software free to Mac computer users, challenging Microsoft Corp's near-stranglehold on personal computing as the latter starts to make inroads into the mobile market.

Apple revealed the surprise offer, available to all users of MacBooks and Mac computers at the same time as it unveiled the new line-up.

Its Mac operating system and iWork software suite, which compete with Microsoft's Excel, Word and other applications, will now be offered free to all users.

By giving away its Mac operating system, Apple is taking on Microsoft's predominant Windows platform, installed on an estimated eight to nine out of 10 of the world's computers and one of its most profitable cash cows.

Ovum chief telecoms analyst Jan Dawson said the announcements were the clearest statement Apple could have made it was interested in competing only in the premium tablet space.

''The yawning gap between the specs of the cheaper iPad Mini and iPad 2 and the new iPads signifies it is only willing to compete at the lower price points with older models. This leaves a huge chunk of the tablet market unserved by Apple, while others such as Google, Amazon and a raft of others aggressively target the sub-$US400 market. This reinforces our view Apple's share in tablets will continue to fall as Android's share rises over the coming years.''

The new iPad news would generate the headlines but the changes to Apple's software licensing was also important, not least for Microsoft, Ms Dawson said.

Microsoft generated 96% of its operating margins from operating system and productivity software licensing. Apple was now teaching people to expect both of those things to be free.

''While this won't disrupt Microsoft's business overnight, it will create further pressure on Microsoft to bring down prices for its productivity software and especially for Windows,'' she said.

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