Monday, February 07, 2011, 01:45 pm

Mac App Store hastens Apple's plans to cease boxed software sales - rumor

By AppleInsider Staff

A new rumor suggests that Apple plans to cease all sales of boxed software at its retail stores, instead relying solely on digital distribution through the Mac App Store.

The plan to stop sales of boxed software at Apple's retail stores is apparently moving quicker than expected, according to MacRumors. Justification for the alleged change-in-progress includes the fact that boxed software takes up a large amount of shelf space in retail stores, even though the profitability of software is well beneath devices like the iPhone or Macs.

"It's not clear how Apple will deal with prominent titles such as Microsoft Office and Adobe Photoshop which aren't yet available through the Mac App Store," the report said.

Though major software options like Microsoft Office are not yet available for download, Apple has made much of its most popular software, including the iWork and iLife suites, available for purchase. Those applications were immediately available when the storefront debuted as part of the Snow Leopard operating system in early January.

Apple's own software has found initial success on the Mac App Store, with higher-priced options like Aperture 3, for $79, ranking among the top-selling options. That's a major change from popular iPhone App Store applications, which typically cost just 99 cents.

Still, software isn't a big component in Apple's bottom line, even with Apple taking a 30 percent cut of all paid downloads from the App Store. In the first fiscal quarter of 2011 -- Apple's most successful three-month span ever -- the company reported revenue in its "Software, Service and Other Sales" category of $786 million.

That was the company's second-smallest business segment in terms of revenue, ahead of "Peripherals and Other Hardware," which accounted for $593 million. For comparison, the iPad business, which is less than a year old, amassed $4.6 billion in revenue for the quarter.

The Mac App Store was Apple's first step toward bringing features of iOS, its mobile operating system that powers the iPhone and iPad, to the Mac platform. The company plans to further pursue that vision this summer with the launch of Mac OS X 10.7 Lion, of which the Mac App Store will be a defining feature.