Doomsday Approaching for Apple’s Mac?

  • Comments: 6
  • Written on: January 7th, 2009

If you have been following the Apple v. Psystar saga over cloned Mac computers you might get the impression that Psystar is just trying to make a buck selling inexpensive clones of a popular Apple computer system.

But according to legal filings, Apple thinks that Psystar might be part of a “Pirates of Silicon Valley” style assault on Apple’s future in the computer market.  And they might be right.

So what is the cause for concern?  To understand that you have to know a little about Apple’s history with clones in the past.

Brief History of Apple Clones

In the mid to late 1980’s PC companies like Packard bell, Compaq, and Tandy were pushing clones of IBM’s personal computer (PC) into homes at a record rate.

From 1986 to 1991, bootleg clone makers started pedaling unlicensed Apple Computer clones.  The clones were not very cost or feature competitive, and Apple got a leg up from the Federal Government blocking the import of some of the most threatening clones.

By 1995, the PC was the defacto computing standard with Apple only holding 7% of the market.  Apple executives decided to start an official clone licensing program that allowed other companies like Power Computing, UMAX, and Motorola to produce Apple Computers.  The move helped generate much needed capital for Apple while at the same time gave the PC *some* competition in the marketplace.

Jobs Ends Apple’s Clone Licensing Program

In 1996 Apple’s board ousted Gil Amelio and brought back company founder Steve Jobs.  One of the first things Jobs did upon his return was kill the Apple clone licensing program.

Jobs reasoned that since a significant portion of Apple’s revenue comes from hardware sales, it doesn’t make sense to allow others to make Apple’s hardware.

Apple’s release of OS8 did not allow for the installation of the operating system on cloned hardware, and essentially killed the Apple Computer Clone Industry.

To this day Apple’s position is that Apple Operating Systems will not be run on hardware that is not Apple-branded hardware.

Renewed Interest in Mac Clones by Legitimate Companies

Apple’s relatively massive gains in market share from 1997 to 2005, as well as the company’s switch to Intel-based architecture, created renewed interest in a Mac clone licensing program.  Michael Dell even went so far as to publicly state that Dell would like to be able to sell Mac clones.

If you imagine a scenario that paired Dell’s market penetration and economies of scale with Apple’s famed appeal you can see how such an agreement would make Dell and Apple a lot of money.

On the other hand, it might also destroy what Microsoft refers to as the “Apple Tax,” making Apple just another computer not worthy of the price premium it currently demands.

It makes sense that companies like Dell would be very interested in creating circumstances that would allow PC makers to capitalize on Apple’s success.

Psystar Defies Apple Openly, Spawns Court Battle

In April of 2008 a small company in Miami, Florida named Psystar announced they were selling the first commercially available “Hackintoshes.”  Psystar pre-installed Apple’s OSX operating system on standard PC equipment and started marketing them as “Open Computers.”

In July Apple sued Psystar for copyright infringement.  The two companies have gone back and forth in court since then.  Psystar’s most recent claim is that Apple never properly copyrighted their products properly.

Somehow Psystar came up with the money needed to retain Carr & Ferrell LLP, a firm that successfully sued Apple in the past and extracted a $10 million settlement check.

Although industry observers disagree on the likelihood that Psystar will get away with legally selling clones of Apple’s Mac, just for a moment assume that they do win in court.

If the door is legally opened to those who might want to make Mac clones, large manufacturers like Dell, HP and others would be racing each other to deploy Mac clone systems at breakneck speeds.

This end result is what fuels the conspiracy theory that some other person, persons, or competitors are providing aid to Psystar to keep their legal options alive.  Some sources believe that this support is the reason Psystar has been so belligerent in the face of resistance by Apple.

Could Psystar be a fall guy designed to test the legality of Apple’s licensing agreement?

As much of a stretch as it might be, this scenario would explain a lot:

  1. Psystar’s sudden appearance on the scene
  2. Psystar’s odd business model tangent from security hardware to “open computers”
  3. The company’s ability to retain such esteemed legal counsel
  4. Psystar’s steadfast stance in the face of Apple’s heavy legal hand

If such a scenario is playing out behind the scenes and it succeeds, Apple might respond by changing its licensing agreements for future operating systems just like it did with OS8 to stem the original flood of clones.

While Apple could also embrace the opportunity to make a massive dent in Microsoft’s market dominance, Jobs has made it pretty clear in the past that he is not interested in that avenue.

With that said, Jobs made his original anti-clone remarks at a time when Mac hardware was a completely different architecture than PC hardware, making it much easier to prevent competition and demand a premium for their products.

Of course, with all conspiracy theories there is also a simple explination that could be just as true.  Perhaps Psystar underestimated Apple and over reached.  Perhaps their attorneys are taking the case because they are betting that Apple woud rather cut them another $10 million check than to have their licensing agreement tested in court.  Of course, that is conjecture on my part but sometimes the simplest theory is the best one.  Should I buy a Psystar?

  1. wim wauters said on January 9th, 2009 at 5:30 am

    Excellent article Thor!

    Now that OSX runs on Intel hardware, it is only a matter of time apple looses their grip on their hardware market. Maybe they should take the plunge? I suspect that just like Microsoft, they are stuck in their eighties business mentality, and they think free and open standards are the “enemy”, communist or not a proper business model 🙂

  2. JOhn said on January 9th, 2009 at 10:38 am

    why not allow it and bring down M$, monopoly?

  3. Thor Schrock said on January 11th, 2009 at 1:16 am

    @wim

    Thanks. It will be an interesting battle. Jobs is not a guy to be underestimated, but he also has a history of building great things and then blowing the big picture IMO. Bill Gates had the right model for the 1980s, Apple had the right model over the past 10 years and open source is definitely playing a part now. Who knows how it will play out.

  4. Thor Schrock said on January 11th, 2009 at 1:17 am

    @John

    The biggest reason I can think of is because it would destroy Apple’s computer business. Look at IBM. They lost control of the PC platform that they created and now they are a second-page footnote in the PC marketplace.

  5. Rent A Car said on September 29th, 2010 at 2:22 am

    I love mac..)

  6. […] matter what you believe, Psystar is in an uphill battle.  They have scored great representation against Apple (a firm that has beaten Apple before) but there is the possibility that this company […]

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