This time, Apple really hid needles in the cotton.

Our competition is no match for us: they are confused (while we are focused). They were busy catching up with netbooks before. Now they are trying to combine PCs and tablets, as well as tablets and PCs. Who knows what they will do next?

— Tim Cook

Apple has always been straightforward in its mockery of competitors. This stems from their strong confidence, and in Western culture, it is not offensive. — In China, this has become an excuse for direct personal attacks on rivals.

At the new iPad launch event yesterday, Apple mocked Microsoft twice. The first time was before announcing that OS X Mavericks would be free; a large image of Windows 8 Pro appeared on the screen, priced at $199, serving as a stepping stone for the free Mavericks. The second time was during the announcement of the free iWork suite, when Office 365, which charges an annual fee of $99, appeared, followed immediately by the announcement that iWork would be free for new device users.

If only it were just mockery. Microsoft must surely think so.

However, this could be the start of a nightmare. Windows operating systems and Office software account for more than 95% of Microsoft's quarterly revenue. Given the share held by Apple’s Macs, it cannot significantly disrupt the PC industry. But if it succeeds in prompting people to think: if Apple’s equivalent products are already free, why should Windows and Office charge (such high) fees? Then, Apple’s “free” move might shake up Microsoft’s business model.

When Xiaomi launched its flagship phone in 2011 with a "1999 yuan" low price, we asked Huawei about their thoughts on this price point, and their response was "Damn that 1999 yuan." Since then, Xiaomi has changed the way people think: Why should phones cost more than 1999 yuan? — even though Xiaomi may have had supply issues (or as some say, "selling futures"). Cursing aside, it couldn’t stop people from thinking this way.

Therefore, Apple’s free initiative is actually a significant challenge thrown at Microsoft, and we’ll see how Microsoft responds. Or perhaps consumers will vote with their feet — although it may take two years to draw conclusions from consumer actions.

Featured image from The Verge