Changes to iWork and iLife Apps on iOS and macOS
Apple makes a significant portion of its money off of its hardware. The gross margin across all of their hardware products is roughly 40%. When you sell millions of iPhone in a quarter, you generate huge amount in profits, enough to be the most profitable company in the world. With hardware being such a significant portion of Apple's profits, this means that a much smaller portion of their profits.
The best way to sell an even higher number of hardware devices is to provide good software. Apple began doing this with their iOS devices from the beginning, and allowed 3rd party developers to create software in 2008. By doing this, Apple has created a vast ecosystem of applications. This strategy has been so successful, that there are over 2.2 million applications available.
In order to provide an even better experience between their devices as well as provide an even more consistent experience, Apple had made a few of their applications free. The list of applications includes:
| App | iOS Price | macOS Price |
|---|---|---|
| iMovie | $4.99 | $14.99 |
| Garageband | $4.99 | $4.99 | Pages | $9.99 | $19.99 |
| Numbers | $9.99 | $19.99 |
| Keynote | $9.99 | $19.99 |
Previously, these applications were only available when you purchased new hardware. For instance, if you purchased a new Mac you could get Pages, Numbers, and Keynote for free. Similarly, if you purchased an iPhone, iPad, or iPod touch, you could receive them for free as well. If you did not receive the applications for free they would cost between $5 and $20 each.
The rationale behind making these applications for free is not entirely known, but there may be a few possible reasons. The first is that by providing the applications for free, Apple is able to provide even more value for the amount already expended for hardware. Most particularly, this strategy may provide a boon to iPads. In particular, if a user purchases a new iPad having professional-level applications available will make the purchase even more worthwhile. Additionally, by providing the applications for free on both platforms the experience when going between both iOS and macOS will be even more consistent.
Given that Apple does make so much money from the hardware, it seems like a rounding error to provide these applications for free. If you decided to not purchase them before, you can now go ahead and get them for free.