By Seb Janacek, 24 November 2008 11:48
COMMENT
The Apple vs Mac clones battle rages on - but will it change Apple's mind about licensing Mac OS X? Not a chance, says Seb Janacek.
Apple has won a key victory in its ongoing legal battle with 'clone' Mac maker Psystar.
Psystar started selling Intel-powered PCs pre-installed with Mac OS X Leopard in April this year. The company sells its computers from a starting price of $555, undercutting even the Mac Mini - Apple's cheapest desktop running OS X.
Apple was not impressed.
In July, Apple sued Psystar, claiming it had broken multiple copyright and software-licensing laws. The company's Mac OS X end-user licensing agreement forbids users from installing the operating system on non-Apple hardware.
In August, Psystar counter-sued Apple, claiming the Cupertino firm operates a monopoly and complaining about restraint of trade and other antitrust issues. Last month, both companies agreed to a mediated route for resolving the debate.
Then last week a judge threw out all six claims made by Psystar and labelled them "internally contradictory".
Arguments of whether Apple should license its operating system are almost as old as the company itself. Bill Gates famously advised the company to do so. He was famously ignored and went on to dominate the market himself with Windows.
Even now, some commentators call on the company to license the OS in order to build market share. Such arguments seem to be based around the argument that in order for Apple to be truly successful it needs to be matching its Seattle competitor in market share. Not so.
Apple isn't pitching itself against Windows - that's just an easy and recognisable target for its marketing. It's more accurate to say it's competing against PC makers - Dell, HP, Lenovo and the others. Even its 'Get a Mac' marketing is misunderstood in this respect.
The ill-fated clones programme of the 1990s was Apple's strategy to increase its market share, effectively closing the stable door once the horse had made it all the way to Redmond. It was a programme born out of "institutional guilt", according to Jobs.
The plan almost led to the demise of Apple. On his return to Apple, Jobs shut the scheme down almost as soon as his name had been stencilled on the door of the Apple CEO office.
Will Apple license the OS X? Not a chance. It makes its margins on hardware, not software. Licensing the OS would dilute sales of high-end Macs and the company is selling more of those than ever before. If the hardware is 'what' the company makes its money from, the operating system and the software is the 'why'.
In a recent call to analysts, Jobs outlined the company's strategy: "We've seen great success by focusing on certain segments of the market and not trying to be everything to everybody so I think you can expect us to stick with that winning strategy. And continue to try and add more and more value to those products in those customer bases we choose to serve."
So it's mass appeal with an all-in-one solution, but mass appeal limited to the more profitable segments that Apple chooses to serve not customers whose purchasing is entirely motivated by price.
It also sends out a clear and unambiguous warning for other potential Mac cloners: OS X is a Mac thing. Period.
Comments
There are 12 comments. Join the discussion
1. James Katt
And another thing:
You need a license before you can copy, modify, or distribute Mac OS X. Period.
Without such a license from Apple - the copyright owner - you cannot sell your own Mac Clones.
2. Ben Ames
Apple didn't kill the clones in the 90's, the clone makers did. Motorolla which made the crappy Starmax clone shut down after it was clear that they should stick to cell phones and not macs. Power Computing which was the only clone maker who made macs better than Apple got bought out by them. Daystar went south and got bought up for their processor cards and other hardware.
The clone makers didn't make a bigger market share for Apple, they made it smaller by cannibalizing Apple's customers. When Steve Jobs accepted the interim CEO spot, he tried to save the clone program by raising the licensing fees. He told an audience at Macworld that they told him to "Go pound sand." So he dissolved that market.
A lot of pundits think that he killed the clones when in fact he saved Apple and if he didn't do what he did, Apple wouldn't be around today.
Sure Psystar makes a cheap crappy mac knockoff, and they would have gotten away with it if they would have stayed low key, but they got arrogant and thought they could stand toe to toe with a company that has billions in cash. NO WAY. Now they have a pretty big legal bill to pay
3. Lawrence Krupp
Wow! Someone who actually "gets" what Apple is all about. That's pretty rare in an industry dominated by the lowest common denominator mentality.
Two ideologies about what defines success in the personal computer industry exist. First is the market share mindset. If you sell more boxes than the other guy you are successful and your competitor is a failure, even if your competitor makes more profit than you do, has more cash and less debt, and is recognized as an innovator by the industry. You are still more successful because you sell more boxes. Interesting twist of logic.
Second is the more traditional concept that profit margins, profit itself, stability, and shareholder value define a successful company.
Sell a lot for a little or sell less for more
4. Ron Bannon
I know, for example, that there's growing interest on many netbook forums for a simple way to install Mac OS X on non-Apple hardware. Just visit the MSI Wind forum and you'll see that the most active group is related to running Mac OS X, and it looks like even the non-hacker can do it without much trouble. There's even a USB 10.5 installer . . . I've seen it done and it does not take a genius to get OS X up and running on the MSI Wind.
5. Oscar
Apple writes software to sell hardware. That has been their mantra for the last 25 years. It is no mystery.
6. Ted Landry
You don't want Clones since they muck up everything. Look at the Windows world, wow... nobody wants to repeat that expensive mistake.
Apple builds fairly high-end boxes that just run and run... and require very little support. That's how it should work, so Apple is doing the right thing for the customer by keep the mess of the Windows world from entering the Mac platform.
7. anonymous
Apple isn't where it is because its the Biggest, It here because its one of the best. and OS X is a Mac's soul!
8. anonymous
I believe you're right about the fact that Apple will not be licensing OSX on non-mac hardware any time soon. But I think you've missed the target in understanding why it won't make the move. There's no doubt that sales of the OS would dwarf its hardware sales and earn much greater profit per sale.
The real reason that Apple won't sell the OS alone is that it's not what they do. Apple isn't a hardware vendor or a software vendor. They are an experience vendor. They blend hardware and softare to create a unique experience. None of their hardware is sold without hardware and none of their software is sold without hardware. They are entirely about the intersection of hardware and software.
9. Rick Mills
Good story however I think that there are some cases where putting OS X on a nin-mac platform is ok, simply because Apple choose not to serve that genre.
Take NetBooks for example. They average at what, about $300...much lower than the MacBook Air at over $1000.
I think this situation makes it "ok" to stick Leopard on a XP or Linux netbook. Its a growing market that Apple's choosing to ignore.
Don't get me wrong though, I like the fact that OS X is a Mac thing. I would hate it if I walked into our local PC shop and there was a bunch of Dell's running OS X for $299...
10. anonymous
Apple rocks and everyone is jealous because they want apple quality but want to be cheapskates
you get what you pay for and apple delivers the best computing experience period!
buy a mac and you will see lol
once you go mac you dont go back!
11. mmm
seems that a windows hardware maker could wipe apple's "hi end" market by just setting up windows with *good* apps. the gamer machines have proven high cost niche works for windows machines.
the biggest cost would be marketing.
as for "success", yes that's subjective. but more people get online cheap using windows.
12. Joe Whitehead
It's funny but I installed Ubuntu on an AMD X64 system and it seems to have all the features I wanted out of BOTH Windows and Mac OSX.
If you want to run the Mac's OSX, it really only makes sense on a system supported by Apple anyways. If you really need to run OSX, then you should consider finding and learning non-OSX versions of yours apps since Apple won't help you if their software doesn't work 100% right with your hardware. Not to mention the issue of software audits... I still think it stinks that they won't license a third party to make those netbooks, though.