Once upon a time, Apple used to charge for nearly all its software, and especially productivity apps like the iLife and iWork suites. However, back in 2013, Apple made those apps free with the purchase of any new Mac or iOS device (see “New Free iLife and iWork Apps Share across Devices and Platforms,” 22 October 2013).
Now, with no announcement or fanfare, Apple has made the current iLife and iWork apps entirely free for all users. Just to be clear, the change affects the following apps:
- GarageBand for macOS (requires 10.10 Yosemite) and iOS (requires iOS 10.2)
- iMovie for macOS (requires 10.11.2 El Capitan) and iOS (requires iOS 9.3)
This is good news for holdouts who haven’t purchased a new eligible Apple device since 2013 but are running a supported version of the operating system and would like copies of the iLife and iWork apps. And it makes explaining the pricing easier for Apple.
Why didn’t Apple just make these apps free for everyone in the first place? The answer likely lies deep within Apple’s accounting department. Back in 2013, Apple made iLife, iWork, and OS X 10.9 Mavericks free and bundled them with every new Mac and iOS device sold. That move enabled the company to delay recognition of a portion of its sales receipts. That’s because the product (a Mac or iOS device) wasn’t “fully delivered” without updates to the software — it’s a “subscription accounting” approach. In its Q4 2013 financial quarter, Apple delayed recognition of $900 million in revenue, in essence hiding that money from the quarterly report (see “Apple Q4 2013 Results See Lower Profits Again,” 28 October 2013).
That may answer the question of why Apple is now making these apps free for everyone. According to Daniel Eran Dilger of AppleInsider, the deferred revenue trickles back into Apple’s reported revenues over 2 years for iOS and 4 years for the Mac. It has been about 4 years since this deferral likely began, implying that Apple has finally cleaned the associated deferred revenue off its books.
In the end, this change doesn’t mean much. Any effects from iLife and iWork becoming free — on competing apps, on Apple’s revenues, and on the perceived value of Apple hardware, for instance — have already taken place. Most people who want to use the iLife and iWork apps have likely either bought copies already or purchased new hardware since October 2013. We suspect that sales to owners of older Macs and iOS devices have dropped to the point where it was no longer worthwhile for Apple to bother charging for the apps anymore.