By Prince McLean

Published: 11:00 AM EST

Mac OS X Leopard delivers performance enhancements, new apps and features, and exposes new functionality for developers to exploit in their own applications. How much is that worth, and where does Mac OS X have to go in the future? In this final installment of our Leopard series, we offer a roundup of the value presented by Leopard, how it compares with Apple's previous efforts, and what users can expect over the next year of Leopard and into the future.

The Historical Value of Software

Back in the days of computers as large as rooms, there wasn't an obvious difference between hardware and software features. AT&T, Digital, IBM, and other major vendors commonly supplied integrated solutions, not just retail products for end users to assemble.

IBM monopolized the market for business computing, and AT&T monopolized the market for telecommunications in the US. That allowed them to set prices largely as they desired. The features of a system were targeted at the market's needs, with artificial boundaries between product offerings that allowed the major vendors to sell the same product at different price points, differentiated by the features disabled in software.

When the price IBM and AT&T demanded for their products began to exceed the work required to duplicate the functionality they offered, even users locked up in a monopolistic dungeon began to devise ways to create competition by building their own solutions. IBM fought to prevent other companies from selling parts for its systems; challengers even had to incorporate IBM's bugs into their products to ensure that IBM's software wouldn't refuse to work with their alternative hardware. AT&T fought BSDi in court to prevent an open source alternative to its commercial Unix. Neither of those efforts were able to preserve their monopoly positions.

When microcomputers arrived in the late 70s, they quickly shifted from a novelty to a very valuable product once killer software applications arrived. Dan Bricklin and Bob Frankston's new VisiCalc spreadsheet (below) for the Apple II ushered in the world of spreadsheets and boosted Apple's hardware sales dramatically. There were already much more powerful computers sold by IBM that allowed users to do the same kinds of things, but not for the $2000 price of the Apple II.



Value in Microcomputers

When Apple introduced the Lisa for $9,995, it impressed the critics but failed to gain much traction in the market because the value it offered was offset by the value it demanded. The Macintosh delivered much of the same features at a much lower price point in 1984, but after its novelty wore off, sales went flat. It wasn't until the value of desktop publishing was unlocked by the LaserWriter that Mac sales again went up in 1986. The addition of free tools such as HyperCard also increased the Mac's value.

However, rather than working to continually add value to the Mac, Apple increasingly sought to pull value from it. Apple CEO John Sculley and Mac product manager Jean-Luis Gassée didn't recognize the Mac environment as value to sell and improve upon, but rather as a privileged position for setting high minimum prices for its hardware offerings.

This was the same thing IBM and AT&T had done in the prior decade. The result was that a number of groups worked to duplicate the Mac desktop at lower cost (or to serve markets Apple didn't), resulting in the Atari ST, the Commodore Amiga, Berkeley System's GEOS, Digital Research's GEM/1, the Acorn Archimedes, IBM's OS/2 Presentation Manager, and Microsoft's Windows, as outlined in the article Office Wars 3.

Apple Learns About Value

Having only targeted the higher end of the creative market, Apple worked to provide value to its customers, delivering advancements in intuitive interfaces, simplified networking, and color and video technology into the early 90s. At the same time however, its market position declined to the point where Apple couldn't maintain the same pace without also matching the advances of competitors.

Apple attempted to continue in the same direction, introducing PowerTalk as an extension of AppleTalk to provide email and security services; QuickDraw GX to expand its graphics and print offerings into advanced typography; QuickDraw 3D (below) to support modeling; and extensions to HyperCard and QuickTime to fuel new multimedia applications. Those efforts all failed, largely because they didn't offer practical value at a price that could sustain their development, as noted in Platform Crisis: The Lazy Dinosaur.



At the same time, Apple had been developing Newton as a series of technology ideas for modern information appliances. Worried that Newton devices might eat into its existing Mac sales, Apple limited its potential by delivering it only as a PDA device. There was no major market for book-sized computers, so the value Apple invested and offered in the Newton found little payback in the market, as the article Newton Lessons for Apple's New Platform details.

Value at NeXT, Be

Starting in the late 80s, NeXT offered a parallel path of history alongside Apple. Worried that NeXT would compete directly against its Mac business, Apple pushed NeXT to agree to do its business in an even higher market tier. That resulted in a machine priced high enough to only really impact those who could afford to invest aggressively in technology. Other companies partnered with NeXT or licensed its technology, but then failed to do anything with it, including IBM, HP, Sun, and Digital.

Unlike Apple, NeXT found it could sell its software more effectively than an integrated hardware and software product. NeXT's software was portable and its hardware had no established market. Conversely, Apple's software wasn't very portable, but it did have significant established users in education and creative markets. Apple could easily ask a premium price for its hardware because of its free software, while NeXT had to sell its software at a significant premium because it couldn't sell hardware.

When Gassée and early Newton developer Steve Sakoman left Apple to start Be Inc., in 1990, they similarly developed software with value tied to hardware that could not be sold outside of a very narrow niche. Unlike NeXT, Be couldn't deliver its BeOS software (below) in the market, as there was absolutely no market for alternative operating systems by the mid 90s. The company ended up being sold off to Palm, and a variety of its core talent--including Sakoman and file system developer Dominic Giampaolo--ended up at Apple.



Refocusing on Value

Rather than just continuing to deliver new products that added features, Apple in 1997 began a revaluation of what value it was really adding. Projects including QuickDraw GX and PowerTalk were evaluated for usable components, but their overall architectures were discarded. Independent efforts such as QuickDraw 3D were abandoned in favor of industry supported standards such as OpenGL.

After doing little to incorporate real value into the Mac operating system since System 7 first appeared in 1991, the new Apple released a series of updates that folded in stripped down, practical functionality devoid of the grandiose pretense of its early 90s projects. It also balanced the value it invested by asking for value back, making the Mac OS a retail product sold at regular reference releases, with free updates offered in between.

IBM and Microsoft had been selling their PC software for around $200 since the late 80s; Apple's Mac System Software was largely considered to be a free product until 1997. Since then, Apple has marketed substantial features that add obvious value into its reference releases, which enables the company to invest major resources into research and development without an uncertain payback for its work.

On page 2 of 2: The Compounding Value of Mac OS X; Mac OS X 10.0 Cheetah; Mac OS X 10.1 Puma; Mac OS 10.2 Jaguar; Mac OS X 10.3 Panther; Mac OS X 10.4 Tiger; Mac OS X 10.5 Leopard; The Future of Mac OS X; and Leopard Gets An A.