[Biallystock]

Sounds fair enough to me.

Apple made a big deal of their compatibility and, now they are using Intel chips, that they are to all intents and purposes a highly compatible PC, capable of running Windows bought from Microsoft.

What's good for the goose ought to be good for the gander. Psystar is selling PCs capable of running OSX bought from Apple.

Now the ball is back in Apple's court. Are they going to announce to the world how petty and anti-competitive they can be and that Mac compatible computers are out there for the making or the taking?

Or are they going to let imitation be the most sincere form of flattery and let this tiny operation do what they can. Maybe even possibly throw some innovations Apple's way that they can then copy themselves?

There goes the underdog status if it turns out you are just a bully in short pants yourself.

[smax013]

KPO said:

No, anti-trust rules also prohibit bundling. You can't use a dominant/monopoly position in one product or service to try to create an anti-competitive market in another product or service. That's partly why the EU forced Microsoft to sell a version of Windows without Media Player, and why even in the US some makers of competing media players sued Microsoft to force them to include their products in addition to Windows Media (they argued that Window's dominant position threatened to make Windows Media the dominant music format).

IBM had settled a previous anti-trust case involving mainframes (where they sold both hardware and software) and were afraid of running afoul of anti-trust matters by having a proprietary IBM OS bundled with the hardware.


Apple is in both the hardware and software businesses. If OS X becomes the dominant operating system (i.e. having the largest market share and being the OS that most commercially available software runs upon), it runs the risk of being deemed by anti-trust authorities as being in a market-dominating position. There's nothing wrong with having a monopoly or dominating position. However, what constitutes "abusive practices" changes if you have a monopoly. Microsoft had no problems tying MS-DOS Compaq and others back in the 1980s to their OS contracts when the "IBM" platform was fledgling and there were plenty of OS choices. Once Windows got to such a dominant position, things changed. They should have changed their contracts, but didn't.


If (and it's a big if) Apple were to gain a majority share of either the PC or OS market, then its practice of bundling the OS with the hardware could become a problem. In that (hypothetical) scenario, Apple could be accused of using its dominant OS position to force users to buy its own hardware when there are lots of other hardware products that (in theory) could be compatible with its OS. One possible solution, if it comes to pass, would be to open the clone market again. That won't help Psystar, since Apple is nowhere near that situation right now.

To my knowledge, anti-trust laws don't prohibit bundling, per se. Anti-trust laws prohibit using your natural market dominance/monoply to try to gain market share in another area. This is a difference.



In Microsoft's case, where they ran in to trouble was they bundled IE and Media Player AFTER they had gained market dominance in the OS market. They used their market dominance in the OS market to essentially force IE and Media Player on computer OEMs and end users. If IE and Media Player had been bundled in the Windoze OS from day one, then they likely would NOT have had a problem.



In Apple's case, their OS and hardware is currently bundled together right now...with NEITHER having dominate market share. Thus, if the Mac OS were to gain dominate market share, then that would essentially mean that Apple would also have to have a rather dominate market share of hardware as well (if the Mac OS is the dominate OS and ONLY runs on Apple hardware, then that logically means that they have to dominate the hardware market as well). The point is that they would not be "leveraging" their position in one market to gain an advantage in another market.



Now, I am not saying that they might not run into trouble. They might. The point is that what Apple is doing is DRASTICALLY different than what Microsoft did and making an anti-trust case against Apple on these grounds would likely be tough. Now, IF (and this is a freakin' HUGE "if") Apple ever became a dominate OS, then they might have more potential trouble from Safari being bundled. While it is not quite the same as what Microsoft did (Apple started bundling Safari because the major Internet browser for the Mac platform that was out there, IE for Mac, went "bye bye" leaving no main stream viable alternative...thus, Apple did not "squash" any competitors when putting out Safari like Microsoft did), there are enough similarities that something could be made of it.



In the end, I think it is a moot point. The reality is that Apple will most likely NEVER gain a dominate market share in either hardware or the OS. In order for them to gain a dominate market share in the OS market, they woudl essentially HAVE to have clones. If you can only run the Mac OS on Apple hardware, then it is incredibly unlikely that Apple will ever gain market dominance in the OS market. And even though you can run Windoze on a Mac just fine, unless Apple gains truly perceived price competitiveness (the fact that they actually are rather price competitive on comparably configured computers means exactly zippola if people don't PERCEIVE Macs to be price competitive) AND enters ALL market sectors of the computer world (i.e. adds bare bones "cheap" models, mid range towers, etc), they will NEVER gain hardware dominance. At this time, Apple's hardware is perceived to be too expensive and they don't cater to some key market segments (i.e. the cheap, sub-$500 PC market)...thus, their market share of hardware has an upper limit that is likely not that much greater than where they are right now. I expect that as they get into the 10% to 20% market share range, Apple will find it a LOT tougher to expand their market...unless they start to add more models and target other market segments.

[Biallystock]

I agree with smax013.

Psystar is building and marketing computer models that Apple sees no market for.

If they don't want that market and don't think that it is financially viable what is their concern?

Listening to so many posters in this forum who seem to know exactly what Apple is thinking and planning (Steve must plug those leaks), Apple has carefully analysed those markets and determined that it is an insignificant minority who would want those products.

So they have nothing to lose because they are already manufacturing and selling exactly what their customers want.

None of them would pass up the opportunity of buying a glossy screen iMac to purchase an obviously inferior matte screen alternative, for example.

[smax013]

Biallystock said:

Psystar is building and marketing computer models that Apple sees no market for.

Yes...and no.



While Pystar's price point is kind of in the "cheap, sub-$500" type market segement, they are marketing their computers as competitive to things in markets that Apple does "play in". Their most basic computer is basically a competitor to the Mac Mini pricewise, but it is a little more powerful (at least graphics card wise)...and in their marketing they imply to some degree that it "competes" with a Mac Pro.



I was previously dealing in the more abstract of what if (or if ever possible) Apple gained dominate market share. To deal with the hear and now...



I don't know how this bit with Pystar will play out. I am not sure how enforceable Apple's "you must use the Mac OS on Apple hardware" license provision really is. It might not matter, however, in the case, as Pystar seems to have gone a bit beyond just that aspect of it with their markettings stuff and modification of the updates and such. I suspect that Apple feels it has a strong case against Pystar...otherwise, they would have likely held out. After all, the LAST thing that Apple would really want is for the license provision requiring the Mac OS to ONLY be run on Apple hardware to be found unenforceable in a court ruling...that would open the flood gates of people making clones. I suspect that IF Apple has any doubts, then you will see them settle things before it goes to a ruling...they are in a much better position of having the THREAT of that provision out there with it being unknown as to whether it is enforceable or not than to actually having a ruling indicating that it is NOT enforceable.

[Biallystock]

But Psystar is not offering the build, finish or style of Apple.

You may pay less but take the compromises. That is part of the marketing mix.

Apple has said it doesn't want that part of the market, so who are they to say no-one else should occupy it?

Unless of course their research shows that a substantial number of their customers do in fact want something that Apple refuses to sell them.

[smax013]

The issue of Pystar and cloning is not black and white...as much as many would like it to be.



Do I wish there were market segements that had a Mac OS entry in them? You bet. Personally, I would LOVE a midrange tower...something that is on par with an iMac that does NOT come with a built-in screen and I have the flexibility to choose what level of graphics card I want. Basically, a roughly $1500 tower with graphics card upgradeability.



Is that a possible area for clones to fill? Yes.



Does that mean that I believe that anyone who wants fill that void has that right? Dunno.



Is installig the Mac OS on a non-Apple computer wrong? Definitely don't know from a legal point of viiew. I don't know if the provision in the EULA itself is enforceable, but the intent might be due to how Apple operates. After all, technically ALL individual sold Mac OS licenses are technically "upgrade" licenses (i.e. you technically already have to have a previous version of the Mac OS). And considering that technically the only way to have the Mac OS on a computer is to have bought an Apple Mac, you would be violating the terms of the "contract" of an upgrade...and I suspect THAT would be enforceable...after all, both sides are getting "consideration"...Apple gets money for selling the upgrade license, but the end user gets consideration by getting a reduced price since they are a "repeat" customer. Thus, I suspect that limits of an upgrade license (i.e. you must have a previous version to install this version) would be enforceable. If so, then the ONLY way someone could technically buy the OS and install it on a Pystar computer would be if they had bought an Apple Mac, removed the OS from that Apple Mac, and "moved" the OS to the Pystar computer (meaning that for every Pystar computer, there would have to be a Apple Mac sitting unused with no OS on it). Then that person could go buy the Mac OS and upgrade it on the Pystar. Now, the question would become is it permissible to take an OEM license (that is kind of what the Mac OS that comes with an Apple Mac is most like) and "transfer" it to another computer. I will note that OEM licenses in the Windows world do NOT technically permit you to move the OS to a new computer...it is "tied" to the first computer install it on...I believe. If so, then this option would not be possible either.



If all of what I have outlined is true, then the real case will hinge on whether Apple's self-standing Mac OSs that they sell are truly considered upgrades only or not. They don't call them upgrades (go the Apple store and look up the Mac OS boxes that are for sale...there is not mention of upgrade only)...but they are de facto upgrade only. Basically, the only way that I can see a court ruling that the "must use on Apple hardware" is enforceable is if the court basically rules that the Mac OS sold seperately is NOT an upgrade only. If the court rules that it is an upgrade only license, then while the "must use on Apple hardware" may not be enforceable as written, it will have the same effect since there would be no way to buy a "full" license of the Mac OS other than buying it with an Apple Mac...leaving the only possible way to install the Mac OS on a non-Apple machine to be if you first bought an Apple machine and did not use (anymore) so that you could put the OS on a different computer.



That is the legal side of stuff. What do I personnally believe? Should I be able to buy the Mac OS and run it on any machine that I want? That one is a tough one to answer. I do believe that if Apple want to continue to grow market segment in the OS market, they will either have to enter into hardware market segments that they don't currently compete in right now or permit clones or even support clones. I suspect that Apple will NEVER fully enter the "cheap" PC market. There is little profit margin for $500 computers. The lack of profit margin is a big reason why Dell is running into trouble. Dell used to be much like Apple is right now. They were rather price competitive, but at the higher end of the price range (not out of the range, just generally at the top end). But, you used to get something for paying more...i.e. good support and service. Dell's service and support used to be considered top of the line, cream of the crop, best in the business. Now, not so much. Since they now compete in the cheap PC market, they profits are not what they used to be and thus they looked for ways to cut costs...and as a result, they have skimped on support and service. Thus, I don't see Apple ever really being interested in this market segment...which means it could be an excellent market segment for clones to be in.



Now, there are still market that Apple does not cater to that they could. They don't have a mid-range tower...a full power, very light portable laptop (the MacBook Air is nice, but it does lack ports and some "omph" under the hood...it hits a particular market segment, but they are other market segments where a simlarly light, small laptop with better graphics, ports, processor, etc would work...basically the market segment that liked the 12" Powerbook G4), etc. These types of market segments still have fairly good room for profit margins...thus, I could see Apple some day entering them...but they also could be areas for clones to "fill the gap".



Thus, there are certainly places where I could see clones serving a good purpose. The problem with clones, however, is that they would NOT stay in just those market segments. That might not be a "problem" for you and me (i.e. end users) per se, but it could be a problem for Apple. It is important to keep in mind that Apple is first and foremost a hardware company. Their business model is to sell hardware. Now, they have decided that the OSs that are out there and available for use on hardware is not good enough in their eyes and thus they also chose to make "different" OS for their hardware, but the OS strictly speaking is there to sell their hardware. I will admit that this arguement is tougher than it used be back in the days of the likes of OS 6 (i.e. when updates and upgrades to the OS were free...you did not have to pay to upgrade to a new version)...but it is still basically valid. The fact that they have chosen to make some money off the OS as well does not change the fact that they are first and foremost a hardware company.



The point is that Apple might "lose out" if they have clones going up against Macs in the market segment that they DO operate in...in other words, they will most likely sell fewer Macs. Yes, they might sell more licenses of the Mac OS...but that is NOT their business model. That is a BIG reason why the Mac OS costs $129 while even the cheapest Windows license is typically at least $200. Different business models.



The end result is that I have mixed feelings about Mac clones. While in theory, they would potentially be something that I personally might like as it might allow me to get a midrange tower that runs the Mac OS, it does have some complications that could ultimately effect me. For example, if clones come about and take market share from Macs that Apple is selling enough that Apple starts to have financial trouble (like they did in the 90s when clones where out then), what happens if Apple is NOT able to shift to a different business model successfully and ends up going out of business (not too likely, but not too far fetched either). Who will be making and supporting the OS that all those clones use? Or if there are bunch of clones with different flavors of hardware out there, who is going to provide the support within the Mac OS for all that other hardware? Part of the strength of Apple's support model is that they have so few models and thus "variables" to deal with that their support costs and efforts are much less than what Microsoft has to deal with. It is possible that the Mac OS could become much more problematic like Windows if Apple had to start supports gobs and gobs of different hardware configurations within the Mac OS. And even if they don't officially support that stuff, Apple's image would be tarnished by all those "Macs" (i.e. the clones) that are out there having problems...they fact that they clearly state that they don't condone or support them would mean ZIPPOLA to their image...people would be having bad experiences with a computer running the Mac OS and many people cannot seperate the fact that it would be due to their OWN choice to be running the Mac OS on non-supported hardware.



The point is that there are a LOT of downsides to clones...certainly for Apple, but also for end users. And I am not sure if the upsides out weight the downsides or not.

[pmbx]

Point taken about the recalling those . But think about the real (probably) intent of this. Would you as a possibly seriously interested customer of Psystar NOW consider buying one of their Open Computers if you even thought for a moment that the courts might take it back?

I think not.

This is are very strategic move for Apple and kudos to the lawyers who thought of it!

Psystar is in serious dodo here. Betcha 'Robert', or whoever that boastful employee of there's was that poked Apple in the eye with a stick, has or will be jumping ship soon! They are way out of their legal league!

[Biallystock]

The basics of this is that if the legal bits you are speculating on aren't in their legal agreements, they don't apply.

If they are in the legal agreement but the court decides they are meaningless or contradict consumer law, they also don't apply.

If the court rules that reasonable use of the purchased OSX in the box includes installing once on an entirely different computer from what Apple recommends, they don't apply.

If no-one can be proved to be the legal entity responsible for the installation that caused a "breach" of the contract, they don't apply. eg "Who installed the software?" "I can't say" "It is your computer, you must have installed it." "Not necessarily, anyone could have done it and it is up to you to prove that I was the one who did." ...they don't apply.

Back when software used to come in sealed envelopes with a sticker over the flap saying "By breaking this seal you agree..." I always opened it from the other end. Because the premise seemed so stupid, I'd love to have taken up the challenge.

In many cases the details of these agreements is only expounded on the inside, after opening the package. The lawyer I suppose has his clients agreement to his fees, previously unannounced, merely by entering his offices!

Given how poorly the whole "agreements" are expressed, executed and seem to contravene common commercial practice, I am very interested in how the courts will interpret and rule on them.

[smax013]

KPO said:

If I buy a Mac Pro and replace the RAM, hard drive, optical drive keyboard, processor, outside case, and graphics card with "regular" PC hardware (all theoretically possible), and then run OS X on it, am I still running it on "Apple" hardware? What if I just replace the RAM and hard drive?

Ah, but the point would still be that YOU bought a Mac Pro (aka Apple hardware), which came with a license for the Mac OS...and then modified it to make it "non-Apple" hardware. That is DRASTICALLY different than buying Mac OS from Apple for $129 and installing it on a computer that you built yourself from a motherboard, processor, PSU, graphics card, memory, case, etc.

KPO said:

Technically that's true, but only of Windows OEM licenses. However, a Window OEM license does not give you access to Microsoft technical support (only the OEM), so that's the driver there. If I buy all the components of a PC myself, and purchase a full retail license, I can transfer it to another PC. The Psystar case might hinge on what constitutes "Apple" hardware.

What you say is true...but it still goes to one of my points...how Apple's license is viewed. Apple's licensing does not technically run parallel to Microsoft's at all potentially. Microsoft has three basic types of licenses...OEM, full retail, and upgrade. Apple basically has two different licenses...one for the OS that comes with a Mac and one that they sell seperate. The one that comes with a Mac could be intrepreted to be like an OEM license (where Apple is both the licensor and licensee). It then comes down to how their stand alone license is viewed. If the courts rule that it is the equivalent of a full retail license, then Apple's provision that it only run on Apple hardware will have to stand on its own and I suspect Apple could lose that part. If the courts view it as an upgrade license, then the provision that the Mac OS only run on Apple hardware might be a moot point as to whether it can stand on it own or not...by default, as mentioend before you would not have a legal way to get the Mac OS to run on non-Apple hardware OTHER than first buying Apple hardware, uninstalling the OS to use on non-Apple hardware, and having an Apple Mac sitting somewhere unused.

[doglesby]

Biallystock said:

Apple has said it doesn't want that part of the market, so who are they to say no-one else should occupy it?

"they"*? I don't know who they are. Apple is the company that supports the OS. If Apple doesn't want to support the OS on those systems, you can't make it. It's nonsense to require Apple to provide support for platforms it never wanted to sell.

Everyone loves the idea of buying the Mac OS and running it on cheap hardware, but there's a reason you can't do that now. It's not just Apple's greed, it's the business model. Apple isn't turning down volume because it doesn't like money, its because selling lots of machines at a loss is worse than selling a few machines at a profit. Vista is available cheap, but the full featured version is insanely expensive. Why? The high end subsidizes the low end. Apple doesn't do that and I for one am happy it doesn't.

*You use a singular verb form and a plural pronoun form. You can write "Apple have ... who are they..." you can write "Apple has... who is it..." you cannot write "Apple has... who are they..."

[doglesby]

Exactly.

[SpinThis!]

smax013 said:

Do I wish there were market segements that had a Mac OS entry in them? You bet. Personally, I would LOVE a midrange tower...something that is on par with an iMac that does NOT come with a built-in screen and I have the flexibility to choose what level of graphics card I want. Basically, a roughly $1500 tower with graphics card upgradeability.

I know many people who want the same. I would think Apple is actually working on such a machine. Why? For years, people have waited for an Apple cell phone. Eventually, Apple delivered. As more people discover the iPhone and the Mac, Apple could easily bring back a revised version of the Cube today. The original was just too expensive, back in the PPC days, but these days, a $1500 Cube would fly off the shelves. Give it slot for another hard drive, removeable graphics, and potentially make a quad core?since all iMac are likely to see quad core upgrades soon?and it would sell like hotcakes.

The main argument is "Apple only makes premium products." Anyone who thinks Apple is making huge profit margins on a Mac Pro has never really priced one out. These Core 2 frankemacs people are building aren't even close to the quad-core xeon workstations Apple's offering. For example you'll most likely need to use a server motherboard with 2 ethernet ports... ram... case... oh, and those Xeons are around $600/piece and you'll realize Apple isn't making that much, even if you factor in a quantity oem discount, a license of Mac OS X, etc. I would even go so far to say that their margins on a Cube might even be higher.

[pmbx]

[quote name='KPO'M']
>

smax013 said:

Quote

How about this scenario? I take a Mac Mini (the cheapest Apple-labeled PC out there) with Leopard already installed. I then replace all the pertinent components with more powerful equipment (e.g. processor, RAM, optical drive, graphics card, motherboard), but leave the boot ROM in place so that OS X still sees it as an "Apple-labeled" product. I write my own drivers (or modify the component manfacturer's drivers with their permission) so that they work with OS X. I'm not saying this is practical (a Mac Mini alone is $600 before I even go replace everything), but it does go to the point of what an "Apple-labeled" PC is.

Well that's an easy argument to rebut. Your Mac Mini IS still an Apple branded product... even if you replace parts of it. Look at the case on the outside and tell me what brand people would call your Franken-Mac? Starting wholesale with a unit that is not initially manufactured by Apple clearly is different than replacing memory or video cards (you won't find parts like a motherboard available anywhere except from Apple, almost certainly, though it wouldn't matter).

Would the average person look at a Psystar case and say that it came from Apple? And is there anything on the case that would give the average person visual license to say that it is an Apple-approved product?

[smax013]

pmbx said:

Would the average person look at a Psystar case and say that it came from Apple? And is there anything on the case that would give the average person visual license to say that it is an Apple-approved product?

And I am guessing that Pystar did NOT go out and buy a bunch of Mac Minis. The point AGAIN is that the scenario painted AGAIN starts with buying an Apple computer with the OS.

The point is that there are two types of licenses for the Mac OS. The first is the one that comes with a Mac. That is kind of like an OEM license. And it would appear from the wording that you can transfer that license IF you also transfer the Apple Boot ROM (which essentially means "killing" the Mac). The second license is the stand alone license, which Apple likely views as an "upgrade" license, even if they don't specifically call it that.

Thus, it will first come down to how the court views Apple's stand alone license version of the Mac OS. If they view it as the equivalent of a "full retail" type license, then Apple might lose on face value of "only Apple hardware". If they view it as an upgrade license, then the only potential legal way that I could see to get the Mac OS installed on a non-Apple computer is to FIRST buy a Mac with the Mac OS installed, remove the Mac OS from that Mac as long as it is to be used on another computer, and then install it on a non-Apple computer. Thus, under this scenario there would have to be a dead or unused Mac for EVERY Mac clone out there.