Apple just announced their new operating system, Lion. I believe this will be Apple’s most profitable OS ever, not just because it is loaded with hundreds of amazing features but for their pricing and distribution strategy. They made is so easy and affordable that it will be impossible not to get it. What is interesting is the price drop also shows some insight to Apple’s overall strategy.

Apple is no longer sending out CDs. They are having you download it through the Mac Apple store. The new operating system only costs $29 (compared to $129 for Cheetah – Mac OS 10)

Main Benefits:

1. Apple makes most of its money on hardware. More people that say “Lion is amazing” will sell more laptops. If you look at Apple’s financials hardware dwarfs everything else.
2. I got my copy of Leopard from a friend. It was easy, he just gave me the CD. But how do you share a 4GB file? It isn’t easy… and at $29 I don’t mind just buying it myself rather than having to look like a cheapo and beg my friend for it.
3. They removed almost all obstacles to buy it. All you need to do is click on the mac app store icon and bam! you got it.
4. Lion has a few network effect features. For example the “Air Drop” – allows you to easily share files with people near you. People will do the upgrade as soon as one of their co-workers asks them to… no need to wait for a CD in the mail.
5. Quicker market adoption. (the result of benefit #1, #2, and #3)

What I learned from Apple today:

1. Make it as easy as possible to give customers your products: 1 click and as little as waiting time as possible.
2. Make it extremely affordable so people don’t even want to cheat your system. It’s just easier to buy it and not worth the hassle.
3. Understand where you make most of your money.

Special thanks to Ish for helping me write up this post.