What it is: HyperCard was one of the first and most popular hypertext programs that allowed anyone to create their own programs with graphical user interfaces.
Yet Apple short-sighted executives at the time never understood the importance of HyperCard. These executives assumed that if Apple was giving HyperCard away, then it was costing the company money. What these executives failed to realize was that people were buying Macintosh computers specifically so they could use HyperCard since nothing like it was available on Windows or MS-DOS. While many companies developed HyperCard copycats that ran on Windows or MS-DOS, none of these copy cat programs had much of an impact on the computer world.
When you look at everything from an accounting perspective, it’s easy to see that the money spent developing and improving HyperCard wasn’t directly returning any kind of a profit. After all, how can a free product make any money?
That’s when Apple started selling the full version of HyperCard separately but bundling a limited version of HyperCard on Macintosh computers. Later Apple simply stopped developing HyperCard altogether because they couldn’t see how it could make them money.
The result was that the Macintosh lost its major advantage over rival MS-DOS/Windows PCs. While Microsoft bundled a similar program called ToolBook with Windows, ToolBook was never as easy to use nor as popular as HyperCard. Few people bought Windows PCs just to use ToolBook, but plenty of people bought Macintosh computers just to use HyperCard.
Fortunately, Apple learned their bitter lesson from their failure to exploit HyperCard’s numerous advantages. Today, you can see Apple giving away free software like OS X, Pages, Numbers, Keynote, GarageBand, iMovie, iPhoto, and many other programs because they finally realized that people buy computers for the software they can use. Give people compelling software to use and they’ll gladly buy the hardware to run it.
Even today, it’s difficult to find equivalent programs like GarageBand or Keynote available for free on Windows PCs. You may find free Windows programs, but they aren’t as easy to use nor are they as powerful as the free software that Apple gives away with every Macintosh.
Only decades later did Apple finally realize their blunder and figure out how free software can increase sales of computers. Even better, giving away free software directly undercuts the Windows PC market, which gives people more reasons to abandon Windows and switch over to the Macintosh.
The lesson of HyperCard is simple. Sometimes giving something away for free is more profitable than selling that same product. The amount of money Apple could make selling HyperCard for $49.95 was trivial. The amount of money and market share Apple could gain by giving HyperCard away for free was priceless, and Apple’s executives failed to see the opportunity right in front of their eyes.
Today you can see how Apple uses free software to continue driving a wedge between the value of a Macintosh vs. the value of a typical Windows PC. When you have great software increasing sales of great hardware, you have a recipe for success, and that partially explains why Apple and Macintosh sales in particular are doing so well today.