Apple, Inc. may become the first major PC maker to ditch boxed software and transition its software sales entirely online.  Mac Rumors is reporting that the Cupertino gadget, software, and services provider is in the process of dropping its boxed software lineup and going entirely digital distribution.

The move follows Apple's successful introduction of the iOS App Store in July, 2008 and the introduction of the Mac App Store in October 2010 (the store actually went live earlier this year).  While many were skeptical of how well the model of internet-based software delivery that scored big in the mobile world would translate to the PC, sales so far have been impressive.  It only took the Mac App Store a day to reach a million downloads.

Mac Rumors writes:

Based on what we've heard, however, Apple is planning on making the move to all digital sooner than expected at their retail stores. Apple is working towards eliminating boxed software and presumably focusing sales through the Mac App Store.

They cite recent statements from Apple as clues to this.  In that statement, Apple remarks:

When you purchase a Mac at an Apple Retail store an employee will help you setup your e-mail accounts, walk you through the Mac App Store, setup an iTunes account for you, and show you the basic pointers of owning a Mac. Some stores will even have dedicated Mac setup stations.

There are a number of advantages to digital distribution.  A readily apparent one is that it gives customers instant purchasing access to software from anywhere they have an internet connection.  For businesses it cuts down on retail store space and the costs (monetary, environmental) associated with packaging.

There are also some downsides.  Namely, some high profile software (e.g. Adobe Photoshop and Microsoft Office for Mac) isn't currently available on the Mac App Store.  Second, the move could be a headache for Mac users with unreliable internet connections (as small in number as that group may be).  Lastly, some like to keep the box art for their software products -- digital distribution removes a bit of packaging charm.  Another issue is piracy, which is reportedly running rampant with Mac App Store software.

Apple may choose to go all digital with the release of OS X 10.7 "Lion", which is expected to be announced at the Worldwide Developer's Conference to be held in early June.

Microsoft is another proponent of digital distribution.  It recently switched to a DVD-free digital download for most of its Office sales, though customers can still order physical media.  Many speculate Windows 8, to be released in 2012 or 2013, will feature a full-fledged app store.