Bait and Switch?

July 26, 2002 8:05 AM

Bait and Switch? (Quicktime Movie) - One of the Mac Faithful at fury.com makes a funny (but true) statement about the new .Mac service charge that Apple recently announced. How far can Apple push their core consumer market with this type of thing? In a News.com report, Apple predicts losing up to 90% of their existing .Mac users. That's some public relations plan. They are indeed thinking differently.
posted by Argyle (27 comments total)

That's some public relations plan.
Apple is going from some 2.2 million free iTools users, to some 220,000 paying users. I don't think it's inconceivable that the increased profits / reduced costs more than outweigh the hardware sales lost from the withdrawal of iTools. The people who are pissed off are the ones who have to switch email addresses: to remedy this, Apple could have fairly easily maintained a very limited free email account, or at least a forwarding service. But they're in a business, so I can appreciate that if something was costing too much money (as the amazing free iTools must have been doing), they'll cut it. Still, I agree that some sort of compromise would have done a world of good.

How far can Apple push their core consumer market with this type of thing?
I don't know who's royally freaking out on this, except for the email-abandoned, and the zealots who were "la la la"ing about Apple's being a corporation and not a best friend. I used iTools on occasion, but I certainly don't see it as having been a main selling point for the Mac. It was a banner-free geocities account, and a pretty sweet webmail interface, but you can get the former with most internet accounts, and the latter at some place like myrealbox. Its loss isn't the Apocalypse, and I think the media response ("MacWorld Shocker! Apple fans utterly fucked!") absolutely exaggerates the average user's reaction.
posted by Marquis at 8:27 AM on July 26, 2002

Why is losing 90% of users of a free service that costs Apple boatloads of money (200 employees at iTools, plus servers, bandwidth, etc.) a bad thing for Apple's bottom line?

Why should customers be considered loyal if they don't buy anything (some of the biggest complainers on the Apple discussion boards were using four-year-old computers, and hadn't even bought an earlier version of OS X), but want free stuff all the time?

Sometimes I wish some of my fellow Mac users would grow the fuck up.
posted by mcwetboy at 8:27 AM on July 26, 2002

"Yahoo! woldn't do that, heck, even Microsoft wouldn't do that."

Yahoo offers a yearly service that I think costs $40 bucks. Apple is bundling the customers several services for $100 a year. This is stupid. They should offer them all at individual prices or a discount bundled rate. But the fact that they are selling the services is fine, thats why they had the free one in the first place, to create a market for their product.

It shouldn't be all or nothing. That way this guy wouldn't have anything to whine about. Not that I feel sorry for him, you have to be pretty stupid to give all your "business contacts and hot women" a free email address, even if it is provided by a large and fairly reliable company.
posted by insomnyuk at 8:33 AM on July 26, 2002

Yahoo's yearly service is for POP mail access, and a little more mailbox space. Their free service is still, um, free, and they're not about to cut that off. Yahoo's Premium Services strategy is to charge for new and enhanced functionality, not to charge for core functionality that has always been free, without recourse of smooth migration.

Apple's complete cutting off of free services is more extreme than Yahoo or Hotmail's recent premium offerings, but even that I could deal with. What irritates me is that it would take a miniscule amount of manpower and hardware dedication to enable @mac.com users to specify their new email address, and have the mailservers bounce messages to deactivated mac.com address with a notification of the new address.

The only business reason for *not* doing this is to use the social networks that people have built up around their existing email address as a way to compel people to pay for the service.

This mechanism of forcing people to pay by not giving them a decent way out is deplorable, and that's what the ad is about.
posted by kfury at 8:41 AM on July 26, 2002

I had my info on Yahoo! wrong. It's 20 dollars/year for 25 megs of storage in an @yahoo.com email address. Or you can use the pared down free version. .Mac's only free version is a 60 day trial. Even still, for all the features Apple is offering, it's not a bad price.
posted by insomnyuk at 8:43 AM on July 26, 2002

[Direct link to fury article]

It's a bad move for Apple to have an all-or-nothing price for .Mac, and $100/year is one of those odometer-rolling-over price points that people freak out about.

It's all about spin. If they'd marketed it at $8.33/month, it sounds cheap. Shoot, I pay Netflix $20/month without even blinking, but I might have reservations if I thought of it as $120/year. Same price, but the annualized amount just sounds more expensive.

I'm actually considering signing up for .Mac because I'm interested in having a shared network space I can access from multiple machines. Sure, I could do the same thing more cheaply and less conveniently with my ISP, but price isn't the only thing, and the convenience of .Mac might, just might, be worth it.

Also, a lot of people are pissed with Apple for supposedly taking away a service that was going to be free for life. I haven't seen any actual documentation of this claim, and my recollection is that the promise was more like, "Keep the same email address for life. And it's free." Which is a different thing than saying, "Keep the same email address for life for free."

They also have a spin problem with the pricing for OS X 10.2. Fewer people would've squaked if they'd called it 10.5. I paid for 10.0 and 10.1, and at first I was annoyed at paying again for 10.2. But it's got tons of new features, and if the added stability and performance reports are true, it's worth paying for. (Although I get an educational discount, so I'm paying $70. I still think $130 is too high.)
posted by kirkaracha at 8:44 AM on July 26, 2002

"Shoot, I pay Netflix $20/month without even blinking, but I might have reservations if I thought of it as $120/year."

Or even $240 a year. Yikes.
posted by kfury at 8:47 AM on July 26, 2002

Given that existing users can get .mac for $50 bucks until September, it's not a bad deal; and I predict that deadline will be pushed back.

In year Two of the .mac, the smarter thing for Apple to do would be to make the $25/quarterly.
posted by ParisParamus at 8:54 AM on July 26, 2002

You know, it's not simply people wanting something for free. iTools was positioned as an additional feature of the new os. Look back at Macworld presentations, Jobs throws it in there like it's a fixed feature of moving to OS X. You get network space, some goofy e-card thing, and email. Heck, when I first installed OS X on a freshly formatted powerbook, I was *forced* to create my iTools account. If it's part of the OS install, don't you think it's going to be permanent, like the OS? What if copying files to new folders suddenly became a $10/year add-on?

I'm fully aware services cost money, but I'm surprised they simply cut off everyone who has ever used it and is demanding payment for further use.

Just looking back at the iTools webspace, a few things surprised me. There are a good number of decent websites on the freebie iTools servers, which serve as a good advertisement for apple, but they'll be gone. Recently, apple started imposing bandwidth limits ala geocites on the iTools pages. When someone wanted to show a video they made in iMovie with their new mac, it suddenly became possible that again, this free advertisement for the tools, would be gone. On more than one occasion I found a funny or interesting link on homepage.mac.com that I couldn't post here, because a few hours later it would lock up over too much bandwidth.

To outsiders, I think this new plan does more harm than good. People using windows that don't know anything about the web would be suitably impressed if their golfing partner got a mac and could suddenly upload digital photos and make movies of their kids available online. It might even make some people switch, because web publishing, email, and remote storage suddenly was incorporated into the OS, and Microsoft has nothing comparable. But now, those possibilities will be gone.
posted by mathowie at 8:59 AM on July 26, 2002

iTools is only useful for Apple if it sells Macs. If Apple's found that iTools is barely a reason in people's decisions to buy a new computer, then it's not really worthwhile for them to keep giving away services that cost them money, especially when there are lots of people with multiple free iTools accounts (um, er, not that I'd do that or anything...) Apple could win a large amount of gratitude from the whiners if they'd give existing users free email/web forwarding from mac.com.
posted by andrewraff at 9:04 AM on July 26, 2002

kfury's video is a decent Switch parody, though. For more Switch parodies, check out Ben Brown's (may be unsafe for work, turn the sound down) and Ani Moller's.
posted by insomnyuk at 9:09 AM on July 26, 2002

"Apple could win a large amount of gratitude from the whiners if they'd give existing users free email/web forwarding from mac.com."

That's all I'm saying...

Also though, one of the big rationales behind iTools was to get people to upgrade their OS, first to 9, then to 10. Apple gets quite a bit of money from the OS upgrades, and as the economy slows down, people are much more likely to pay $130 for a new OS than $1500 for a new computer. Interestingly, though the computer costs more than 10x the OS upgrade, Apple only nets perhaps 3x as much from a computer sale as an OS upgrade.

An unrelated note, about Jaguar and the whole 'upgrade' thing, unlike Windows, unix, or any other OS, every MacOS version is essentially an upgrade, since every computer capable of running it comes with the OS already. I think Apple's just holding on too tightly to the brand equity they built up around OS X (err, 'Oh ess ten') to call this one 10.5, because then next year they'd have to go to 11, and they'd have to decide whether it's OS XI, OS 11, or OS X 11.0, and that's something they probably haven't figured out yet...
posted by kfury at 9:12 AM on July 26, 2002

I really hope the bandwidth restrictions will be eased with .Mac; I've been trying to find out whether that will be the case.

The inevitable problem with free services is that users will use the shit out of them. Lots of people got around the 20 MB iDisk/Homepage limit by signing up for multiple iTools accounts -- it wasn't that difficult to do. So you had a skyrocketing number of users milking a free service for all it was worth while at the same time Apple was imposing restrictions, trying to keep its costs down. When you think about it that way, I can't see how it was sustainable: at some point the free services would be so constricted, or so shitty, that iTools would become a joke, not an asset. As an aside, I remember reading somewhere (should have made a note at the time) that Apple decided not to resort to advertising on its free services.

So now we're just arguing over how much should be paid, and how (annual, quarterly, monthly; all-inclusive or à la carte), but I have no respect for people who insist that iTools should be free forever. (A petition demanding that free services be maintained? That seems an awful lot like sitting on a sidewalk with a cup in front of you.)
posted by mcwetboy at 9:24 AM on July 26, 2002

Apple was faced with either providing the level of support that customers expect/demand or providing a service level equal to the price charged (or both). Ultimately, giving free service users a level or support and product quality commensurate with free would not play well for Apple. The result. Kill iTools. Unfortunately, the clueless meatTools will bitch about the loss of their iTools.

In addition, Yahoo and MSN provide NO free services. iTools has never forced the user to view tons of ads or openned the user up to endless hoses of porno spam. These liabilities come from MSN and Yahoo email accounts. Not a financial cost to the user but still not free. Apple chose not to soil themselves with ad based services.
posted by shagoth at 9:32 AM on July 26, 2002

Actually, I'm not arguing over how much should be paid, or how. I'm arguing as to how Apple should treat email addresses of those who either can't afford $100 a year for their email address, or who choose not to.

My entire point is that Apple should have a placeholder bounce, letting others know of my new email address. That has nothing to do with the value of the .mac experience, the price of that experience, or Apple's decision to charge for it.

By Apple's own admission, 90% of current iTools users will not migrate to .mac. My question is why Apple will choose to treat these people as non-apple customers, to whom Apple owes no kindness or customer service, when it would be free for Apple to do the right thing?

Doesn't Apple realize that this 90% will *also* be deciding whether to pay $130 for Jaguar in the coming quarter? Why piss them off?
posted by kfury at 9:33 AM on July 26, 2002

Here is another Mac "Switch" parody that's pretty funny, especially for you gamers out there.
posted by thewittyname at 9:38 AM on July 26, 2002

kfury, if they did that, they'd have to hold onto old accounts and new paying people would have to get lame HottSexxy34845 usernames because all the previous accounts were taken for misuse.

I can see an upside to this. I could pay the $100, signup as [e-mail], and get instant, guaranteed hot chicks emailing me. It's win-win.

(there's a hi-tech adaptation of Cyrano De Berjac somewhere in there that practically writes itself)
posted by mathowie at 10:45 AM on July 26, 2002

mcwetboy, your list of the reasons why free iTools can't last are sound.

If Apple's executives were caught by surprise by these realities, then they aren't very astute. On the other hand, if they planned all along to convert iTools to a paid service, they were being deceitful when they sold it as if it was part of the operating system.
posted by timeistight at 11:14 AM on July 26, 2002

Just yesterday I was speaking to a family member that wants to buy his first computer ever (and first one to use), and I tried to sell him on a Mac AND told him about all the free iTools and mac.com goodies. Now I'm going to have to tell him that it will cost extra, and he'll just settle for a Wintel machine. Thanks Apple; Suddenly your 'Porsche' of computer boxes has an empty tank when you drive it off the lot!
posted by Sal Amander at 11:16 AM on July 26, 2002

I'm still waiting for kirkaracha's reaction when he realizes he's paying $240/year for Netflix!

kfury, if they did that, they'd have to hold onto old accounts and new paying people would have to get lame HottSexxy34845 usernames

Ah, but if they don't do that people will start complaining about new privacy concerns... mail intended for me is now going to the new user who just snatched my "short and clean" address... and the new user is pissed he's getting "junk mail."
posted by Fofer at 11:17 AM on July 26, 2002

I think Apple's just holding on too tightly to the brand equity they built up around OS X (err, 'Oh ess ten') to call this one 10.5, because then next year they'd have to go to 11,
Which is basically what I said when other Mac lovers bitched to me about the upgrade price.

With regards to email forwarding -- while it was once a common courtesy (even evil Lycos did it when they shut down hotbot.com mail ...although I think they did it mostly so they could shove spam down my throat) forwarding seems to be a dying practice among free email services going fee. FT.com gave users a choice of buy it or lose it when they switched their Personal Office system to subscription, and were furtherly cagey about just when the switch would occur.
posted by me3dia at 11:37 AM on July 26, 2002

I could never get @home to forward from my email account with them as they went through their death throes. The increasing rarity of simple forwarding is a great reason to have your own domain name. Of course that's ridiculous overkill for most users.
posted by timeistight at 11:47 AM on July 26, 2002

They could sell the forwarding service. $5/year or something, to get the 90% who aren't keeping iTools to shell out some cash. They'd still turn a profit. Even that would be better than all or nothing.

kfury, if they did that, they'd have to hold onto old accounts and new paying people would have to get lame HottSexxy34845 usernames

I don't think this is that big of a problem. I wouldn't want an email address that already exists, because of the problem of spam, as mentioned above. Besides, if they used my system, a large number of users still wouldn't renew, and those names would be put into the pool of available names.
posted by insomnyuk at 12:36 PM on July 26, 2002

iTools was positioned as an additional feature of the new os.

Signup for iTools is integrated into the Mac OS X installer (10.0, and at least up to whatver build came with the first iMac G4s). It may not be legally part of the OS, but it is certainly psychologically part of the OS.
posted by nathan_teske at 1:53 PM on July 26, 2002

Free iTools membership was also one of the features touted on the box that you paid for and bought...
posted by kfury at 1:56 PM on July 26, 2002

Right, ok. But they never said "for life", as annoying as that may be.

I predict they change their mind about email and either keep all mail access or allow forwarding. This is a new Apple -- they don't get everything right, but at least they don't get everything wrong like they used to ;)

I was gifted a .mac account since I had already bought more space on my iDisk account. It comes with 8 more addresses after me and my girlfriend. I'm perfectly willing to hand them out if anyone's interested.
posted by jragon at 3:20 PM on July 26, 2002

"I predict they change their mind about email and either keep all mail access or allow forwarding."

Truth be told, that was my reason for making the video.

I found out on thursday that the video had been forwarded to the entire .mac product team at Apple, so maybe I can affect change even if I don't work there (yet?).
posted by kfury at 11:10 AM on July 27, 2002