Okay, so since the ad had taken on a life of its own, sparking conversations all over the place, I feel the need to write just a bit more about what bothers me, and what doesn't, about Apple's recent tactics.

First and foremost, I'm not particularly bothered that Apple has decided to charge for iTools. I'm sad for the necessity, but that's the way the web is going, and though there's still the ambiguity about whether iTools was a feature of 10.1 and 9.0, or if only the hooks into it were features, that's another battle, and a point that Apple should explicitly address in one form or another, especially as they're on the cusp of releasing a new version of the OS, and many users may be asking themselves which of the 150 new features will Apple start charging for next year?

No, the problem I have with Apple is that even though Apple SVP Phil Shiller admits that the average conversion rate to paid services is 10 percent, though they hope to beat that, Apple is shutting out the 90% of Mac users and Apple loyalists who choose not to pay for the premium services.

Let me be explicit here: I'm not saying that this 90% (which, by the way, consists of 1.9 million Mac users; a fair chunk of their 5% market share, and a number significantly greater than the entire user base using OS X) deserves free iTools functionality in perpetuity. I'm not even saying, despite the fact that Yahoo and hotmail have free email offerings, that Apple should have a free, limited level of service. I am saying that there are two levels of consumer standards that Apple should meet: The first is an obligation to existing users, and the second is a more intelligent, palatable product structure.

Apple needs to make money off iTools/.mac. That's their prerogative. By offering a reasonable suite of products at what can be argued as a reasonable price for those products, Apple has created what is to many, a viable subscription package, and perhaps even a good deal. For users who wish to retain the services that they had been getting for free, along with the new services, that's great. For those who choose not to pay for the service and move on to other providers for their needs, Apple has an ethical obligation to do at least a bare minimum to help those Mac users out.

Apple has claimed that they need to make .mac profitable. Fine. They claimed that iTools was not a sustainable model. I believe that too. The problem is that Apple has made a deliberate decision to not allow forwarding addresses or change-of-address bounces on expired mac.com accounts, and that is Apple turning its back on those Mac customers who are loyal enough to use a Mac, but not loyal enough to buy all the bells and whistles Apple has to offer.

This is, quite plainly, dirty pool.

It creates pissed off users who have committed only two sins: believing that a mac.com email address offered as free from Apple would either stay free or close down gracefully, and choosing not to buy a subscription bundle that costs 10 times more than the functionality they desire.

What's the right thing to do? It's simple. Mail forwarding isn't the answer. It doesn't educate the sender about the new address, and requires Apple to expend server resources for an unspecified period of time. Unless the user proactively informs every person who sends them mail via mac.com, Apple will face the same problem months or years down the road.

When Apple shuts off the free mac.com email addresses, anyone sending to such an address will get an 'undeliverable mail' message when the email hits Apple's mail servers. This 'server tax' will happen no matter how Apple treats their expired mac.com accounts. Allowing mac.com users to specify a 'change of address,' and modifying the Apple mail servers to bounce, not an 'undeliverable mail' gobbledygook server error message, but instead a 'This user is no longer at mac.com. You can reach them at . Please update your address book.' requires only one hit to a database to lookup the new address. This flow educates the sender, doesn't require the former mac.com user to know the email address of everyone who might email them, and gives Apple users the freedom to choose the package that's right for them, instead of locking iTools users into Apple's product because of their email equity held hostage.

This is the right thing for Apple to do, and to do otherwise is to admit that Apple is in such dire financial straits that a 10% conversion to .mac is more important than the goodwill of the remaining 90% who, let's not forget, will be deciding whether they want to pay $130 for Jaguar in the next few months.

So, that's the bare minimum. Now let's look at the product offering itself:

In their own breakdown of costs, justifying their claim that $99 a year is a good deal for the bundle's contents, they say that the email access alone is worth '$40+ per year,' citing Yahoo and Hotmail as similarly-prices services.

First off, Yahoo and Hotmail have free email addresses. It's true that it would cost about $40 to match .mac's offering feature for feature, but if you didn't need POP access, or were happy with a 6 megabyte mailbox, you could pay half that or less.

Apple offers additional email addresses 'a la carte' for $10 a year if you're already a .mac subscriber, so clearly Apple's costs for these additional 5 meg accounts is less than $10 a year, yet this option isn't offered to the average user.

The 'value' of getting what Apple purports to be $250 worth of software and services for $100 a year is clouded by the fact that most of the items are products the average user wouldn't otherwise buy, such as virex (when was the last time you saw a virus for OS X?) or the backup tool. Moreover, several of the items listed are software products not subscriptions. Bought separately, a consumer wold only have to pay for them once, not year after year. there's absolutely no guarantee that these products will be revised every year, or even at all. If you stay a .mac subscriber for three years, suddenly the software freebies aren't so cheap.

The point is that Apple is trying to sell users things they don't need or want, simultaneously holding hostage the very few services that users do require, and using the filler services as a justification for the high annual rate. This is the worst kid of manipulation.

Apple has some of the best interaction designers and product marketers in the business, so one has to ask: how did this happen? Well, I'll tell you...

Exactly one month before Apple's most recent quarterly earnings announcement, they lowered their forecast on that quarter's earnings. This is something that companies do when they see that industry analysts are predicting earnings higher than what the company sees as likely internally. It's designed to prevent a huge selloff of stock after a negative surprise earnings release. Apple wasn't going to make the numbers they predicted last quarter, and they wanted to give investors a heads up.

Fast-forward to the eve of the Keynote speech: Apple released their earnings numbers after the bell on Tuesday evening, roughly matching their lowered expectations. The next morning Apple's CEO would be giving a pivotal keynote speech in front of 50,000 people in the financial capital of the world, withing earshot and webcast of the very analysts and investors who, after reading Apple's financial, are waiting to hear what he has to say before making the decision to upgrade or downgrade Apple's stock.

Clearly, the New York keynote was being delivered to the financial community. What better way to cater to that community than to announce new sustainable revenue streams? Recent moves in the subscription realm by competitors such as Microsoft, Yahoo, and Real, justified subscriptions for services as a viable tactic, and one that is recognized by Wall Street.

Speaking to a packed auditorium gone suddenly terse and quiet, Jobs was trying to save his company's market capitalization. It must have killed him to have to make that speech to that audience. Still, the groundwork for this decision was laid down weeks if not months earlier.

I've heard from inside Apple that this was a 'Steve-down' decision. having participated in literally a dozen meetings at Yahoo, discussing the premium services offerings, prices, add-ons, etc., for Geocities and Mail packages, I can tell you that (at least at Yahoo) those decisions weren't made lightly, and the balance between profit and customer satisfaction was a delicate one, honed during meeting after meeting, assisted by surveys and market research.

My assumption is that this same kind of thoughtful research went on at Apple too, with carefully planned tiers of service for .mac (which, I'm guessing, was still going to be called 'iTools' before the change). Then one day the need for new apparent revenue streams is realized by Apple's top executives. Despite the fact that by Schiller's own estimates, .mac will generate only $22-44 million a year, equating to 0.4-0.8% of Apple's annual revenues, iTools was targeted as a financial golden goose to be sacrificed on Wall Street's already bloodied altar.

The rest is history.

So, how did the big master plan work out? Conversion to .mac accounts is too slow to gauge, largely in part to Apple's decision to start the annual clock on the day the user pays, incenting users to wait until September 30th before buying in to .mac. As for the stock price: It lost 18% of its value the day after Apple lowered its quarterly forecast. The following morning Merrill Lynch and AG Edwards downgraded Apple stock to Neutral and Hold levels. These downgrades were the likely catalysts for the .mac pricing plan. Apple stock lost another 17% in the two days following the earnings announcement and the keynote speech. On the morning of the 17th, Salomon Smith Barney downgraded Apple stock from Buy to Neutral.

All told, in the last two months, Apple stock has dropped 46%, from its 52-week high to its 52-week low. Since the keynote, Apple stock has dropped 18%.

Clearly .mac wasn't the only Wall Street appetizer at the keynote. The decision to release a Windows iPod was one held in reserve for a case of dire need, and the pricing structure for Jaguar was similarly changed in recent months. If Jaguar had always been intended to be a full-priced upgrade, it would have been labeled 10.5, not 10.2. In fact, the decision to keep the Jaguar codename is built on the necessity of differentiating 10.2 from 10.1. The 'leopard print' X logo followed from the same rationale.

Now, as so many of the 'anti-whiners' have whined, Apple has a mission to make money, and of course that's true. As Apple devotees we all have some bitter pills to swallow in the coming quarters until the economy the tech sector turn around. Nevertheless, if the past couple of week have shown us (and hopefully Apple) anything, it's that Apple needs to create the illusion, if not the reality, that we the loyal Apple customers are in this with Apple together. Heavy-handed pricing and upgrade policies (I won't even get in to the QT 5 Pro -> QT 6 Pro debacle), aren't the way to retain the market share that Apple still has.

The lure of a better product is what made most of us buy our first mac. The allure of a better company is what causes us to evangelize, put Apple logos on our cars, even brand ourselves with mac.com email addresses.

In short: We are the cult of Apple. Please don't make us drink the kool-aid.