Apple Is Definitely A Hardware Company

I just read two separate articles (one, two) claiming that Apple is (or is turning into) a software company.  I have to disagree with that statement.  I recently wrote about the price war between Windows 7 and Snow Leopard that will be going on in the not too distant future where I pointed out that Microsoft (a true software company) simply cannot compete with Apple on price when it comes to software.

Apple will be charging $29 to upgrade to Snow Leopard from Leopard (for existing Leopard users) which is much less than it cost it upgrade from Tiger to Leopard ($129).  If Apple was truly a software company there would be no way they could charge so little for the product.  Apple generates most of its revenues through its hardware – not its software (or others software).  The fact of the matter is Microsoft cannot do that. While Microsoft is attempting to lower the price during the pre-sale of Windows 7, I do not expect that price to last.

The second article also mentions rumors and speculation of a Mac App Store (a desktop version of the iPhone App Store) which may seem like a good idea on paper, but not in reality. Why would a desktop developer want to sell his program for $25 and only receive a portion of it? Whereas, the same developer could sell it on his own site and make the full $25. If you’re looking at the exposure question, well, I would assume the Mac App Store would be double (if not more) the size of the iPhone App Store and we all know how hard it is to catch a break in that App Store.

Apple is not a software company.  They are a hardware company with their own operating system.  If Dell were to come out with an operating system which they put on their computers and mobile devices would you call them a software company?  Of course not.  Dell’s revenues would still come mostly from their hardware sales (desktops, laptops, mobile devices, etc).  This is the exact case with Apple.