Snow Leopard sales roar out the gate

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Computerworld - Sales of Snow Leopard during its first two weeks on the shelves far exceeded those of the last two Apple operating systems -- Leopard and Tiger -- a retail research analyst said today.

According to the sales data that the NPD Group collects from U.S. retailers, both online and brick-and-mortar, Mac OS X 10.6, aka Snow Leopard, sold twice as many copies in the first two weeks as Leopard, its immediate predecessor, did in 2007 -- and almost four times higher than Tiger, which debuted in 2005.

"Absolutely, I was surprised -- especially compared to how much push Leopard had," said Stephen Baker, the NPD analyst who covers retail software sales. "But when you think about Snow Leopard's pricing, it really shouldn't surprise anyone."

Apple set Snow Leopard's price at $29 for a single license, $49 for a five-license family pack, $100 less than the corresponding Leopard packages, claiming in June that "we want all Leopard users to upgrade to Snow Leopard, so we're pricing it at $29."

Most analysts read different tea leaves, and said that Apple recognized it couldn't charge its usual for what had been billed as a stability and performance upgrade with relatively few visible new features. "I think Apple's pricing strategy is something other companies should follow," Baker said. He didn't name names, but was clearly referring to Microsoft, which is set to ship Windows 7 next month.

"Apple clearly demonstrated that aggressive pricing policies in this economic environment generate an outstanding consumer response," said Baker.

Some retailers have discounted Snow Leopard. Amazon.com, for example, is currently selling the single-license OS for $25, and the family pack for $40.

Microsoft has set the lowest retail list price of a single-license Windows 7 upgrade at $120, and the price of a three-license family pack at $150.

For a limited period, Microsoft discounted an upgrade to Windows 7 Home Premium to $49.99, but the company has not announced plans to rerun that program either before or at the time the new OS ships in late October.

Snow Leopard's momentum during the two-week period was also stronger than its predecessors, Baker noted. According to NPD's data, Snow Leopard sales declined about 25% from Week 1 to Week 2; both Leopard and Tiger dropped more than 60% between Weeks 1 and 2. "That's the really interesting thing," Baker said. "I think one reason is that Apple released Snow Leopard early. Maybe some people weren't expecting it."

Apple had originally said Snow Leopard would ship sometime this month, but beat that deadline by several days when it launched the upgrade Aug. 28.

"Even though some considered Snow Leopard to be less feature-focused than the releases of Leopard or Tiger, the ease of upgrading to Snow Leopard and the affordable pricing made it a win-win for Apple computer owners, helping to push sales to record numbers," Baker concluded.

He hoped Microsoft looks at the numbers and rethinks its pricing strategy. "There will be a lot of promotion for Windows 7, but it would behoove Microsoft to be more aggressive on price," Baker said. "It will be interesting to see if that upgrade can deliver the same incremental increase in consumer demand that Snow Leopard has enjoyed."

NPD Group does not typically disclose sales numbers, even aggregates, reported by retailers. Today, Baker declined to provide sales figures for Snow Leopard's first two weeks.

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