Whenever we talk about Mac clone makers such as Psystar, we all more or less accept as a fact that Apple is selling copies of its Mac OS X operating system at a price lower than it would have been if Apple did not have a hardware business. Even though we treat this statement as fact – recently, I’ve been wondering: where is the proof?
It seems like the most solid bit of “proof” that we have in this story comes from comparing the price of Mac OS X to that of Windows. In general, a full retail copy of Windows will set you back round and about 200-300 USD, depending on the version (Home Premium vs. Professional), while a full retail copy of Mac OS X will go for 129USD.
From this information, people conclude that therefore, Apple must be subsidising the difference in price between Windows and Mac OS X via sales of its hardware. While this may seem like a logical conclusion, there is absolutely no reason to assume that Windows’ pricing is, in fact, the baseline; it could very well be that Mac OS X’ price is the baseline, with Microsoft just being really really overpricing Windows in the retail space.
In fact, if you compare the prices of both Windows and Mac OS X to that of other pieces of complicated software, both Windows and Mac OS X are relatively cheap at retail. If you look at the retail pricing for Photohops CS4 in the US, the full version sets you back 699 USD, while the upgrade goes for 199 USD.
The problem here, of course, is that we have no idea how much time and money goes into developing software like Windows, Mac OS X, or Photoshop. You can easily argue that more time and development goes into a typical Windows release, simply because Windows requires a lot (preferably in bold, italics, and underlined) more testing before it goes out the door, because it has to work with infinitely more hardware combinations than Mac OS X. This is just a baseless assumption though, and I’m sure you can make such assumptions going either way.
Another very important point in this discussion is that Windows’ retail pricing is relatively irrelevant. What matters are OEM prices, since more than 95% of Windows licenses are sold via OEM. If you look at these prices, Windows is actually cheaper than or as expensive as Mac OS X; volume OEM pricing is reported to lie around 25-30 USD per license, while individual OEM copies go for 100-139 USD, which is similar to that of Mac OS X. With Windows’ prime market being OEM, and most of that volume OEM, it makes sense to assume that Microsoft is still making a profit on these lower prices.
Seen in that light, there is absolutely no reason to assume that simply because Mac OS X retail is cheaper than Windows retail, Mac OS X must be subsidised by Apple’s hardware sales.
Why is it important to want proof for the subsidy argument? Well, it just so happens that many Apple fanatics claim that Psystar is ripping off Apple by re-selling copies of Mac OS X. They claim that because Apple is subsidising the retail copies of Mac OS X, re-selling them without also buying or having bought Apple hardware, they are ripping off Apple.
This argument from Apple fans could very well be true – don’t get me wrong – but I would like to see some proof. Where does this claim originate from? Is it based on anything? Any financial information from Apple? Anything…?
Apple is doing quite well, but how many Macs does it move every year compared to the number of Windows licenses? Basically, if Apple wasn’t a hardware company, they wouldn’t make much money at all in the computer business. If they, like Microsoft, centered their business on just an OS, Apple would be a much smaller company.
I don’t know why people suggest they sell their OS as a subsidy – they probably charge what they consider a fair price for full retail copies of it. But then again, like Microsoft, they probably don’t sell all that many full retail copies either – most come through hardware sales. That’s why Psystar is troublesome.
By the way, is this another filler article? Slow day? This reads more like a glorified forum post.
Why do you think that? Surely if Apple were not a hardware company[1] they would license OS X to OEMs. They could stand to make much more money selling software this way, and there would be a corresponding saving in not have to design their own computers.
[1]: By “hardware” I’m referring to computers only. Devices such as the iPod & iPhone are a different class of device.
Edited 2009-07-03 12:33 UTC
But to maintain a high quality it would involve a massive amount of control when it comes to licensing and many OEM’s would simply refuse. How many OEM’s right now have flat out refused to move to UEFI? On the issue of UEFI alone it epitomises the PC industries refusal to move beyond 30 years ago – why would Apple want to put up with that crap?
I can see it now, Apple would say, “ok, you need to do this, this, and this” and we would have whiners on here complaining that Apple’s demands are too stringent. Its a no win situation with some idiots on this website – what it is all about is envy and jealousy. I can’t have that product so I’d sooner see the company get destroyed instead.
Edited 2009-07-03 13:46 UTC
Dell and other OEMs are happily shipping Ubuntu on their hardware, which requires a similar amount of “control” in respect of the hardware they select. Why would it suddenly be different for Apple? I’d bet dollars to doughnuts that Dell would fall over themselves if Apple offered them to option to ship OS X on their machines.
I have no idea if that was aimed at me or just a general comment, but it’s bizarre reasoning on your part either way.
What have they done for Ubuntu? there are still the same incompatibilities; they still are choosing to ship BroadCom even though their drivers are shonky, they continue to provide ATI GPU’s with Linux laptop seven though the drivers are more or less a joke. Then there is the firmware itself – where as a nice, clean and efficient UEFI would do, they hobble it with a buggy BIOS.
I’d say that Dell did the least amount humanly possible.
It was a general comment; the feeling I get from some people here is if they can’t get something – they’d sooner see Apple get destroyed. Its akin to saying, “I really want a Ferrari, but because they don’t provide a cheap one or allow cheap clones – I want the to go bust instead”. Call it the extension of the, “I want now” syndrome.
While that may well be true on Dells part, they do at least ensure that the OS works with the hardware. There’s no reason why, in my hypothetical universe, Apple could not contractually enforce more control over the hardware than Conanical have done.
I know that it is hypothetically possible but Dell might end up turning around and saying, “well, hang on, who is running this company?” and just flag it.
Don’t get me wrong though, my vision of Apple is as a purely software company – and this vision would be based upon the idea of Apple purchasing Adobe, focusing on expanding their middleware, then possibly gradually rolling back their hardware division with the focus is on strictly controlled contractual arrangements with big name vendors that allow them enough room to differentiate but not too much as to cause incompatibilities (for example, a standard motherboard with the differentiating factor is a bigger hard disk, faster processor, more memory or a better graphics card).
I too would love to be able to walk into a shop, purchase a Lenovo Thinkpad, run Mac OS X and have it fully supported by Lenovo but I don’t see it happening anytime soon – thats the sad reality unfortunately.
That’s almost exactly what I’m proposing.
Part of the problem with Windows is that the hardware manufacturers write the drivers. With the crap drivers & software Dell installs on their machines, OS X would not be a pleasant experience on those machines.
Apple’s engineers write the drivers for their systems, it adds to their costs, but also is part of the stability which most here apparently want.
Kelly
eh? they certainly dont write all the drivers…
just because they come with the OS (not always) does not mean they were written by Apple.
Apple engineers are good – but not that good!
kawai, you say “what it is all about is envy and jealousy. I can’t have that product so I’d sooner see the company get destroyed instead.”
Not for me. I don’t want the product. What its about for me is whether a company, any company, can sell a software package and then have you, during the installation or use process, agree to a further contract which restrains how you may use it.
I don’t see any difference between Apple telling you what kind of hardware you may install on, and Apple telling you what books you may read with it, or what other software you may install with it. In the end this issue is about our intellectual freedom, its about whether we or the supplier own what we may access through the software. It touches on stuff like open file formats and similar forms of lockin. It touches on ability to migrate from one platform to another.
Here, let me give you a real concrete example. There is a software package in the UK which I deal with, which has no export facility, and which keeps the data a customer keys in, in binary and proprietary formats. Now, the files are hackable so I have helped a customer extract their own data. If Apple’s method of operating is upheld, so would a clause in a EULA be that said that you agree not to access the file C:\etc\etc, that you agree not to decompress it, that you agree not to use awk perl or sed or similar products in conjunction with it – in short, that you agree to pay 100 Euro for the service every time you want to get your data out, and you agree not to then put your data in to any competitive product.
This is why this case is so important. And this is why the case is not even mainly about Apple and its business model or its fortunes. This is about us, this is about people being able to do what they want with the software they have bought, versus a point of view that says, I will sell it to you, and then I will dictate what you may or may not do with it, in any respect I care to name, and no, nothing you create with this software is yours, even if it is entirely your own intellectual property. It is mine, because you did it with my software package.
And if I take steps that are in my interests as a company and not in yours as a user, well that’s tough.
You don’t think it can happen? It can. It does. If Apple wins it will be everywhere. A very skilled professional, not very computer savvy, was told by this company, when she asked tech support how to get the data, her own data, out, that it was all industry standard stuff, all she had to do was learn to write XSLT transforms. They suggested she learn Saxon and wished her good luck with it. She asked me where to start. I said, don’t bother, they are laughing at you.
This is what is at stake. It has nothing to do with envy and jealousy, it has to do with intellectual freedom. It has to do whether, in order to give Apple the powers that it wants, but should not want, and does not need to maintain its business model, we abridge the intellectual freedom of the whole computer using public. That is, all of us.
Hell no, is what we should all be saying.
Almost, but not quite. The case has nothing to do with whether *you* or *I* as consumers put OS X on a computer after we have purchased OS X. That is allowed by law already, and has nothing at all to do with this case. Apple has no say in that matter, and doesn’t give a rats ass about it. This case has to do with whether a commercial entity can do so. Commercial entities such as Psystar are not consumers, as they are a computer manufacturer. The line is finely drawn, but it is there.
Don’t think so. If it is OK for me to do it, its OK for me to authorize (and pay) someone to do it. Once you admit that it is perfectly lawful for me, regardless of copyright and the EULA, to install OSX on an x86, then you have to admit it is lawful for me to pay a third party to do it for me.
Maybe it has to be done with some attention to the legal niceties, like perhaps ownership has to reside with me and not the third party when this is done. But there is going to be enough leeway in this to make it impossible to only allow individuals to install OSX on x86, and not organizations on their behalf.
This is explicitly recognized in US copyright law. The law in S117 explicitly gives the legitimate owner of a copy the right to make copies as necessary to use the software with a machine. It also gives him the right to authorize others to do this on his behalf. But it denies him or them the right to transfer ownership of the resulting copies without authorization from the copyright holder.
It follows that a properly structured arrangement will permit someone to go into the business of installing OSX on x86 machines for others, as long as those others own the machines and the copies at the time of the install, without violating copyright.
I do not know whether Psystar complied with these conditions or not. They do claim to build only to order, so maybe they do.
Whether the EULA will permit Apple to stop such installations is a different matter. But here too, there is no way that it can be lawful for an individual to violate the EULA but not lawful for a third party to do so acting on his authorization and doing it with his property.
Apple people get furious with the idea that Psystar is doing this to make money, as if we did not all do things to make money every day. But there is nothing unlawful about that. What may be unlawful, but should not be, is violating the EULA provision on where you install, or cause others to install for you.
According to copyright law and consumer law you can do with your copy what you wish. Whether or not you can pay a 3rd party to do it is exactly what this case will let us know once it is done. If it was illegal for you to install it, then “Hackintoshes” would be an issue, and they are not. The only issue is whether or not a commercial entity can provide that service. The laws apply to the end user of the item, in the case of Psystar you are not buying a copy of OS X and then sending it to them, they are providing it installed on a machine, and sending you the discs. That is the difference in it all. Psystar is not the end user, or consumer, but rather the provider and distributor.
Either way I will be glad when it is all said and done and we all can stop our speculations on it
In fact, it is not at all clear that you incur no liability for violating the EULA, which the software requires you to accept in order to install it. The extent to which such “click to accept” contracts are binding is hardly settled law. In practice, of course, this is makes no difference to you individually, because even if you are liable, suing an end-user for violation of the EULA would be such bad public relations, that Apple almost certainly would never do it.
No, i would say that if Apple were like microsoft and made an OS that you could run on whatever PC, then their market share would be higher than today, much higher.
You compare the retail price of Windows, OSX and Photoshop CS4. The most important thing for Microsoft, Apple and Adobe is they get their development costs paid back when selling their software. So comparing the retail price alone makes no sense – even as important is comparing the units sold. (price x units_sold = earnings; earnings >= development_costs). And if earnings are greater or equal development costs its no more subsidized at retail.
So even if Windows and OSX have about the same complexity (and thus about the same development costs), OSX has to be 10 times more expensive than Windows to allow Apple to make a profit – since OSX is sold about 10 times less than Windows.
You got the rest about right, but this one is wrong. You made the wrong assumption that Windows is sold at cost price. That could not be farest from the truth. It is a well known fact that Microsoft profit margin is close to 85%. On windows software, it it well higher than 90%. It means that their development cost (+ marketing + everything) is less than 10% their revenue.
Therefore, if the complexity was the same and development costs the same, even selling 10 times less software Apple would still be profitable. And actually their development costs are far from equal. They use the BSD kernel, the Webkit browser engine and they only support one kind of hardware. There are not much things they develop alone. Maybe Aqua and iTunes and that’s about that.
Edited 2009-07-03 13:59 UTC
I personally think that a lot of apple software is quite cheap. Final Cut express and also Aperture are incredibly fully featured and are very low in price, the same for iLife which again packages a lot of bang for the buck. iWork is also quite cheap when compared to office, i know office has a database but the cheapest office for the PC is only for home and students and not for businesses, something that doesn’t restrict iWork.
Again using the same pun, i don’t think you can compare apples to oranges as each companies business model is very different from the other.
I personally don’t like clone mac’s as i feel they were the biggest part of the downfall of Apple during the 90’s.
I would love to be able to install Mac OSX on my work dell (Quad Core 4GB RAM etc) however i know that apple would have to practically kill itself to provide that level of support for drivers etc.
Personally i think the complete solution offered by apple is good, of course i would love to buy a mini tower which is priced between the Mac Mini and the Mac Pro, however having such complete control of hardware and software does allow apple to produce some nice machines.
But they wouldn’t have to kill themselves. Vendors and hardware manufacturers write a lot of drivers. Try installing a retail copy of Windows on a new name-brand laptop. You probably won’t have wireless, network, or graphics drivers, not to mention all the drivers for fancy little hard drive protection, fingerprint reader, or optical drive silencing. Yes, Apple would have to support your particular chipset and motherboard etc., but they could let anyone who wants to install their OS on whatever he or she wants, at his or her own risk. Apple doesn’t have to support unauthorized installations, and Apple doesn’t. That doesn’t mean that Apple has explicitly to prohibit such a use of its OS.
Yeah, and Windows dependency on the stella quality of third party drivers has really done wonders for the Windows reputation when it comes to stability, security and reliability. Mark my words, the day when Apple goes whole sale reliant on third party drivers it will be the beginning of the end. You’ll have all the wonderful joys of Windows with all its mediocre reliability.
Regarding OEM installs and their responsibility; I wish it were that simple but if Mac OS X doesn’t work on a given computer then it isn’t the OEM vendor who is blamed, it is Apple that gets the blamed even though it is the OEM who is responsible for that side of the equation. Just like with those Nvidia failures – it isn’t Nvidia who gets the flack, it is the clueless end user who blames the OEM for a fault that is actually the result of Nvidia. Reputation destroyed because a supplier further up the chain didn’t do their home world. It takes years to build up a good reputation but it takes a matter of hours to destroy it.
Edited 2009-07-03 13:54 UTC
The development model is already in place. It’s a BSD. Partner with the FreeBSD or OpenBSD kernel developers and they are all set. At worst, Apple signs some NDAs for the more close minded hardware manufacturers who choose to work with osX vendors. Hardware support is far less of an issue than people think.
Apple software is cheap because it’s facing an uphill battle in a competitive market…
MS software is more expensive because it has the advantage of a monopoly and existing lock-in…
Pricing of software has very little to do with actual cost, once the initial development costs are covered it’s pretty much pure profit whatever they charge for it, and a lower price will result in more sales and less piracy. Software is priced as high as possible, which for MS is pretty high because most of their customers are locked in and can’t use anything else.
Look up apples earnings report and tell me how much money they make from hardware and how much from software(all software)?
without the hardware sales, apple wouldn’t be able to fund the kind of r&d that mac os x benifits from.
The financial reports don’t discuss income or expenses related to OSX sales. In fact, they hardly mention OSX at all. Here are a couple of interesting things though:
Software sales were up, computer sales were down.
The entire Apple R&D budget for the three month period was ‘only’ $319,000,000. Software sales alone earned $625,000,000.
So it appears that Apple’s software development does NOT need to be subsidized by hardware sales.
A very similar issue IMO is the non-free iPod Touch OS update. Everyone just shouts “It’s because of Sarbanes-Oxley!”, but no one has actually quoted the law’s relevant part, nor explained what the law has to do with the situation, neither was a lawyer. Or at least I haven’t found a single blog/article that wasn’t just guessing.
What gives?
Its already been addressed so many times that Apple users like me wish that we had out head smashed into a wall – it is the way in which things are accounted for in regards to cost. The $10 you pay, for all intents and purposes, is a token amount. The account matter is the way in which costs are deferred/recorded – where it is not an update but an upgrade. Where as an update can be counted as part of the usual support required, an upgrade is giving away something for free.
The problem, Kaiwai, is that Apple appears to be the only company affected by SOX. So even though everyone says Apple does it because of SOX, it still appears that Apple is the only company following SOX…
…which makes a lot of people doubt the reasoning.
This whole SOX thing is actually a very good example, analogous to the article. Apple charges for the update, and everybody wonders why. Apple fans start digging and come up with SOX – Apple fans are really good at coming up with justifications for everything Apple does. This is then promoted to truth, even though no one from Apple ever said anything about this, and we’ve never seen any expert on the matter make any statements about it either.
I give Apple the benefit of the doubt here because they actually got hit with a fine under SOX a few years back.
Wasn’t that for some strange stock option game they were playing?
In any case, SOX is one of those things that is largely interpretation – these days executives go way overboard in the name of SOX just to make sure they’re not going to land in jail because they missed something.
It’s pretty sad, really, as I’ve seen firsthand how a public company can do some pretty pointless and wacky, unreasonable things, in the name of SOX just to cover their asses. It’s one of those things that basically punishes the innocent, like so many other laws out there.
Subsidizing or not is entirely irrelevant, aside from being flamewar fuel.
What is happening here is that Psystar is — unquestionably — violating the EULA *and* decrypting Apple’s stuff without permissions to produce a Mac-less OS X distribution.
The point is: is the EULA enforceable? And/or: is decrypting this way circumvention of technological countermeasures as defined by US and EU laws? If either is true, Psystar is most likely breaking the law, and thus would find itself in big, big trouble.
Subsidization doesn’t even begin to enter the picture here. The price of OS X is irrelevant to the above. It could be free or 10k per seat, and the above would still entirely apply.
Edited 2009-07-03 13:09 UTC
I may be missing something as I haven’t been watching this thing closely. What decryption or circumvention of countermeasures are they doing? My understanding was that the the firmware is an industry standard just like BIOS so there is no circumvention in using it. A boot loader isn’t a circumvention either. It’s not like they are doing a kernel modification between boot loader and Darwin startup.
From what I can tell, Psystar buys retail copies of osX and installs them on compatible hardware; no modification of osX to do so. This appears to be contractually questionable but there is no real technological hurdle involved.
Anyone who thinks Apple is subsidising OSX is smoking crack. Retail sales figures would pay for several thousand fulltime developers. Considering how much they leech from OSS I doubt they even need 100 developers.
Unclefester, take the light bulb out of your ass and substantiate those claims of ‘leeching’. Leeching is a one way direction when it comes to a transaction; replace leech with ‘mooching’ or ‘bumming’ and you’d get the same result.
I only need to look at the many projects they contribute here there is a two way street; Sqlite, webkit, LLVM, GCC are four I can think off the top of my head – not including all the improvements in the area of compatibility which the various BSD’s merge back into their respective projects.
If you’re going to talk about leeches; name a single substantial thing Red Hat has done to advance Linux forward to the desktop besides regurgitating the same crap over and over again.
Ok, we know you don’t like RedHat. However RedHat do not target the Desktop Market for their sales(mores the pity).
That said, the countless things they do with the Kernel and many other components that go into most Linux Distro benefit EVERY Linux User regardless of which one they use. Yes, even Ubuntu users benefit from the work that RH does.
BTW, you forgot one important thing that Apple contribute back to Linux and that is CUPS. Many people I have converted to Linux really marvel at how easy it is to add a printer to the system. No searching for, downloading and thenn installibg needed for the majority of Printers.
They target the enterprise market – and although the hardware support isn’t there for esoteric devices one would expect in the mainstream end user desktop, the requirements remain the same. HAL has been a running joke ever since it was created – heck, I pointed out the foolish design of it way before all the issues about inefficiency which Intel’s power management and detection tool demonstrated about some key GNU/Linux components.
What I see is a company that, instead of addressing the issues simply scale back their product range to an even smaller niche instead of addressing the problems that hold it back from being mainstream enterprise desktop platform.
Like what? most of the work Red Hat into the kernel all have to do with the server, not the desktop – name a single component outside of the kernel where Red Hat makes major structural contributions. Not merely just window dressing to address a bug or two but large design and overhauls of components which address long standing issues.
You’re right; its funny how many *NIX vendors used to shun it but are now embracing it. With that being said, OpenSolaris developers are fighting it tooth and nail because they can’t admit their existing printing system royally sucks donkey balls and riddled with out of date printer drivers.
Edited 2009-07-05 03:56 UTC
Since when was advancing linux on short of an enterprise workstation or server something redhat had any reason to “innovate” by your assumed standards?
Oh did you think redhat was competing with apple for shiny gadget market share that people like you can glance over and see their reflections on while typing on a forum trying to justify apple’s cause?
Haha. No really, hahahaha.
Who said anything about innovation? the issues that exist in Linux hardly need innovation given that the solutions already exist – its just a matter of implementing them.
Then again, given the low bar you apply to innovation – I’m sure you consider the baking of a banana cake akin to a water shed moment in culinary innovation.
I don’t to justify anything – quite frankly you could throw yourself off a cliff tomorrow and land head first into a sea of upturned swords; I wouldn’t shed the slightest tear. That’s how little I care for you and your opinions on the matter.
For a person who registered 4 years ago and made 34 posts; it speaks volumes for the fact that you’re a troll who posts merely to incite a response rather than entering into any meaningful discourse.
Edited 2009-07-05 04:06 UTC
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One of my personal favorites that exhibits what a pompous *** hole you really are:
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Would you like me to keep digging in your profile for more hot head cut throat fanaticism towards defending what I would almost think is your daddy if we were talking about a person?
So does this mean we’re not friends? Seriously, are we not?
Well of course everyone is out fighting a losing battle for your approval, reading over your responses to nearly anyone on this forum makes that entirely clear to myself.
Trolling trolls my friend. I’ve been mostly lurking here long since before I even registered but when I see a pompous troll like you I can’t help but make my presence known.
Don’t hurt yourself trying to come up with more cheese **** “bed of swords” or “pull the light bulb out of your ass” responses. I’m done “trolling” and back to lurking.
I think people make the conclusion of subsidising on the basis that they don’t see money being transferred from the hardware side of the operation to the software side – hence the assumption that there is a software transfer to the hardware division without ‘payment’. I’m pretty sure that the hardware division transfers money to the software division to pay for the development, just as the software division receives money from their retail sales going directly into their own area.
I remember when Mac OS X Leopard was released, $14million was I think the revenue bought into Apple in the first 3-4 months via retail sales. Conservatively speaking then if you think in a two year period it would be hard to argue that even though it bought in $60-$100 million retail that it was being subsidised by hardware sales; because that doesn’t even include the transferring of ‘purchasing licences’ by the hardware division.
Throw that money on top of it and take into account the fact that there are large amounts of the operating system which aren’t even in house projects of Apple such as SQLite, Xorg, Webkit and so forth, the overhead for developing Mac OS X would be relatively low too.
The problem with Pystar is simple, if Apple were to remove hardware locking and allowed third parties; what would happen? You’d see companies completely ruin the Apple name by releasing half baked products with low quality drivers and Mac OS X/Apple will get the blame when things go wrong. Apple’s business revolves around the vertically integrated model of the hardware and software business under one roof so that a consistent user experience can be delivered so that through the life cycle of the device the end user not only gets a great out of box experience but when it comes to upgrading their operating system it all works without any problems.
In all due respects to Pystar, they’re parasites. Its about time instead of grabbing onto the coat tails of a successful company that they made a real product; invested some of their own money into producing an easy to use *NIX like operating system, create their own iLife and iWork suite, and doing some real product development instead of being a parasite on the back of the IT world. Quite honestly, Pystar are no better than the hundreds of PC vendors out there claiming to be innovative but all they do is allow swappable face plates and claim it as innovation.
Why are you afraid that ‘parasites’ will release and sell lousy hardware and blame Apple? If Apple’s hardware – sorry ‘experience’ is so good, surely customers will keep on buying Apple?
Let’s turn it around? What would happen if 3rd parties BOUGHT (not para-siting!) Apple’s OS and sell it with a lovely box that performes the same (or better) as Apple for a fraction of the price? Surely, that is why Apple doesn’t license its OS, they would sell themselves short.
From Apple’s website, you can get their financial reports.
Unfortunately, Apple does not detail what percentage is coming from the OS but there is a general heading for Software
Software Total Sales
2008 2,207 32,479
2007 1,279 24,006
2006 1,508 19,315
That’s 2.2 billion USD in 2008. It does not include iPhone software or iTunes sales.
So it’s clear that Apple does make a good profit on the OS, unless you think that the development cost is more than 2.2 billion USD per year?
We’d have Psystar and the various other white-box Mac clone makers. That’s exactly what they do. They pay for everything: there is no “leeching” going on as some Apple fans would like you to think, at least not in the sense that they would like you to think there is.
Apple sells a lot more than just OS X. You’re forgetting Aperture, Final Cut and Logic. These are widely regarded in the industries they target and considerably more expensive than OS X.
I’m going to bet OS X makes up a minority of Apple’s software sales.
Who ever assumed that Apple is subsidizing their OS? I’ve never read that before and never har someone assume that.
Only the worst free market bullshit dreamers believe there is a direct link between retail price and production cost. On which planet do you live? In reality, they charge the maximum people are ready to pay.
Microsoft profits are well above 80% of their revenue and this is not a secret or speculation, they publish their results each quarter publicly. It means that when they charge $100, it costs then $20. That includes every branches in Microsoft.
I don’t know about Apple but I assume they must have arount 30% to 40% profit margin. Welcome to earth.
It’s an idea that’s been posted over and over again in the forums, so many times that someone might even think it’s gospel.
But the whole idea is ridiculous to me. If Apple wasn’t making a profit on retail copies of OSX, then Apple wouldn’t be offering OSX for sale.
Microsoft spends a fair of money on what one can call “pure” research and research that never works its way into Microsoft software proper, including software that doesn’t work on Microsoft’s OS without virtualization technology (the Sage computer algebra system for example). I’m not sure if Apple spends money on these sorts of non-marketable things (maybe they do; I just deon’t know).
Before comparing the costs of the OS’s, one should determine if the amount spent on R&D is somehow equivalent. Then there are the economies of scale…
In other words, I think the question is more complicated, and possibly not resolvable.
In theory (hackintosh, Psystar, etc. aside) every computer having a retail copy of Mac OS X installed came with Mac OS X originally. Thus, in theory, every purchaser of Mac OS X retail is UPGRADING an existing Mac OS X install.
Therefore, the most appropriate price comparison is to Windows’ upgrade pricing.
Part of the ‘true’ Mac OS X retail cost is included in the original sale of the machine, and helps to justify the high retail price of Mac computers.
Wrong. It is or is not an upgrade depending on how it works. Being an upgrade is a quality of the software. My personal purchase history is totally irrelevant. As is Apple’s previous commercial policy.
Consider this. Suppose that you are right, and that OSX retail copies are really upgrades. This is so because Apple only permits installation on Macs. Now suppose they change this policy and permit installation on anything you want. So all those copies in the store, which work exactly the same way as they did yesterday, have suddenly ceased to be upgrades and become full copies?
No, this is absurd, the copies on the shelves either were or were not upgrades and they still are that. If you can boot from it and install from it onto a machine with a factory fresh hard drive and no copy of any OS anywhere on it, its not an upgrade, its a retail copy.
The base of installed Macs drives sales of OS X and the desirability of OS X drives sales of new Macs.
Were Apple simply selling the OS, their costs would be far higher as they, like Microsoft, would find themselves having to support almost infinite varieties of hardware. They would have to field support calls from people with $19.99 power supplies that were causing intermittent crashes. They would have to employ far more people writing drivers (or, as Microsoft has so disastrously done, trust the hardware vendors to write the OS drivers). They would have to deal with negative publicity on the web from people with horribly mismatched systems (PCI video cards in AMD Phenom quad core systems, $500 graphic accelerators in systems with Celeron CPUs and 512MB of RAM, 20GB 5400RPM hard drives, etc.).
Because Apple controls the hardware and software, they can tune the software and decide when to obsolete hardware in order to maintain the OS performance and experience that they want their users to enjoy.
I agree with your idea that Apple’s software drives their hardware sales, and vice versa. It’s a good system that works well for them.
But the fact is Apple does sell OSX independent from hardware. And they sell it at a profit, and they sell it without doing all of the other things you say they would have to do.
No, they don’t sell OS X independent from the hardware. They sell it licensed solely for use on Apple computers. They don’t provide drivers and support for using it on Dells, HPs, Compaqs, Gateways, Lenovos, etc. You make a Hackintosh and just try to get them to give you software support when you sound, video, network, etc. does not work properly.
If all of the Mac in the world disappeared tomorrow, Apple would not be selling OS X at a profit. If OS X disappeared tomorrow, they would not be selling enough Macs to remain profitable.
Neither you nor I know how Apple’s accounting works. If they spend 10K man-hours building new versions of OS X, does it all get charged to the OS X softwware development charge number(s) or does some of it get charged to the charge numbers for the platforms they are adding support for (e.g., 2009 Mac Pros, MacBook Airs, etc.)?
Unless you have a support contract which you’ll pay a hefty fee for, your going to pay for your support from Microsoft. “this call is billable at…”
For HP, you call HP. For Asus, you call Asus. For Lenovo, you call Lenovo. For Dell, you call Dell (who may forward you to Connonical depending on OS). If you buy from a local shop, you call the local shop for support.
So, why would it be any different. For Apple, you visit the fruit bar. For Psystar, you call Psystar. For Hackintosh-r-us, you call Hackentosh-r-us.
Vendor’s provide drivers or driver interface specs so kernel developers can include support. Support comes from your retail company. Apple users benefit from competition where Apple already has a clear advantage. Nothing really changes that doesn’t benefit the users.
And Apple provides support. Take that away, and the OS is less appealing and will sell in lower volumes.
You have a grossly oversimplified vision of the world. You call Dell and they tell you that the sound is not working because of a Windows problem — not a Dell problem. You call Microsoft and pay for support, and they tell you that it’s a problem with the unsigned driver that Dell provides. You call Dell back and they tell you that they get the driver from Realtek and that, since their test software makes sounds, it’s not their problem. You spend two weeks trying to get an answer from Realtek and they refer you back to Dell — because you have no contractual relationship with Realtek. Calling Dell back results in you being told to format your hard drive and reinstall everything, letting them know if that doesn’t solve the sound problem.
1. Because Microsoft’s model doesn’t work. That’s why Apple sells so many computers to frustrated Windows users (like me).
2. Because Apple has no desire to sell their OS to manufacturers of other hardware. They won’t support Psystar or other “hackintosh” efforts to get the OS to run on that hardware. They won’t help developers at 3Com, Creative Labs, Realtek, etc. write drivers to make their non-Apple-sold products work on a Psystar.
Yeah, let me know how it goes for you when you call Psystar with an esoteric problem regarding the OS. (I had a corrupted Java install that Apple spent over an hour and a half with me troubleshooting at no charge — think they would do that for a Psystar customer?)
You are apparently not aware that a “hackintosh” is a cobbled-together system coaxed into running an illegal copy of OS X (which is licensed solely for use on Apple hardware — regardless of whether you bought a copy at the Apple store, Best Buy, or from some guy on ebay). There is no support firm for a system you build from pieces. Gigabyte isn’t going to provide you tech support to get OS X running on their motherboard. nVidia won’t help you when you tell them that your Hackintosh video isn’t working.
How does it benefit me to have Apple fighting fires and PR nightmares when their OS has major problems on hardware that they don’t manufacture?
How does it help me to have OS X’s reputation sullied by unstable hardware crashes being blamed on the OS?
How does it help me, as an Apple customer, to have Apple’s hardware sales undercut by Dell, HP, Compaq, Gateway, etc. — because that’s what would happen if OS X was turned into a runs-on-everything OS? Great, so Apple sells fewer systems. So they have less R&D money for their hardware. So there’s less Apple-specific accessories in the aftermarket (cases, skins, etc.).
There’s a reason why Steve Jobs is a billionaire. I realize that you think you know more about how to run Apple than he does, but you probably don’t. Trust me on this one.
Going point by point just leads to stunningly long post so I’ll just go all at once. It’s still not a glacial difference.
So Dell sends you to MS who sends you to Dell. If I have problems with my Asus motherboard, it’s still Asus forums I go too. The dis-functionality of the call centre is not the point but rather the fact that your supposed to call Dell first. For IBM, you still call IBM first; though, in that case it’s a madening series of phone menus before a human will answer. Still, when you buy your system from IBM, you call them.
It’s also not about if Microsoft’s business model works or not. I personally have many issues with how MS does business but that’s not the topic here. The point remains, why would Apple be forced to support non Apple systems? You apple fans are smart folks right? You’d realize your not getting support without an official Apple purchase right?
Nothing is stopping Apple from not supporting non-Apple hardware calls. I’m pretty sure the brain bar at the Apple store is not going to support your Hackintosh or a Psystar system. The phone centre can simply include it into the introductory script or state that registration of your purchase is required for phone support. I’m pretty sure I’m not getting support if I walk in with a jail-broken iPhone or a Linux distro on an iPod.
In this case, the “but Dell and MS does it differently” really doesn’t apply. You call Psystar or Bob’s Hack-A-Shack and that’s the end point. It’s not like either can say “oh yeah, that’s an Apple issue, you need to call them”. Given no prior assumption of support from Apple (MS does have a prior assumption of support) an obligation could be avoided in the future.
“You are apparently not aware that a “hackintosh” is a cobbled-together system”
I’ll quote that one line though because I nearly fell down laughing. You also missed the “Hackintosh-R-Us” pun towards Psysar similar companies rather than “cobbled together systems”; bit quick to get defensive maybe?
Actually, given the article a few weeks back, it doesn’t even take a cobbling together of systems for one to do there own osX on non-Apple hardware. Naturally, I wouldn’t expect support for a home built when ample support is available through forums anyhow. One who isn’t comfortable with forum help likely isn’t doing hackintosh installs either are they?
As a consumer, how would you be at a loss? Based on the “what if” situation that third parties can sell osX preinstalled systems; it would either show that equivalent quality can be provided at better prices or crappy clones can’t stand up to competition from the original vendor. Doesn’t that benefit you as a consumer? If a company couldn’t provide solid support for it’s products, they are not going to remain a competitor against Apple for very long are they?
The people who make a stink because Apple won’t support non-standard installs are the same people find or dream up any reason to complain already. Apple can simply say; “if it’s not an Apple baught standard product install, we’re not going to support it”. Already done with iPhone and the Pods after all.
I think Apple’s a big company that would do just fine with some competition. The purists like yourself will never switch. They still sell a crapload of osX native aftermarket software which is already a large part of there income. They still sell accessories for each one of your USB ports. I don’t see the R&D money going anywhere; it may actually drive more R&D and service for the brand loyal customers. It could be a way to differentiate; by Apple official hardware and get Apple direct support. Heck, they can charge support contracts for third party osX retailers which would amount to higher revenue per osX unit sold wouldn’t it?
Your jumping to assumptions again at the end. I didn’t sudgest I knew how to run Apple better than Mr Jobs. Why is suggesting that there may be benefits for the consumer equivalent to “I know how to run Apple better than that Steve guy”? Apple is a profit focused company and Steve is a profit focused businessman; every decision is fundamentally based on what will bring Apple more money. I’m not suggesting anything of that sort; I’m a consumer focused civilian who doesn’t benefit from higher Apple shareholder equities.
But, since you suggest it, why should I trust you on this one? Is there a bit of full disclosure you need to share? Why so deeply offended by the suggestion that third party osX sales may be beneficial?
Frankly, your post was simply too long to address point by point.
But I thought that this line was absof**kinglutely hilarious:
You obviously know as much about me as you do about the computer industry. I have been a professional embedded system (hardware, software, and firmware) engineer since 1980. I have probably built more IBM clones than you have used (and built CP/M systems prior to the PC or Mac even being released). I bought my first Mac in the Fall of last year — after over 25 years of owning non-Apple systems. I am sitting in my computer room where I have four PC clones that I built, a Dell server, and an inherited Dell workstation. And one Mac (a 2.8ghz 8-core Mac Pro).
“Support” includes making a version of OS X that boots on non-Apple hardware. Because, if you put an OS X disc into a non-Mac system, it doesn’t boot. The OS does not install. There’s not a big market for unbootable OS discs.
False dichotomy much? It would actually show that stupid consumers with no knowledge of engineering will decide based on price, not quality. Apple will lose sales, reducing money for R&D into new computers, and I, as a consumer, will be “at a loss.”
I’ve watched it happen in the computer industry for over 20 years. Consumers mail-order crappy monitors that they have not even looked at because the monitors are cheap. Being, on average, about as intelligent as cocker spaniels, they think that the diagonal measurement and the resolution (e.g., 24″, 1920×1200 pixels) fully define the monitor and any two monitors with matching numbers are basically identical.
It happens with laptops and desktops. It even happens with the “hobbyists” who buy motherboards based on features rather than construction. They don’t know what bypass caps are, why they are important, or how manufacturers cut costs with cheap ones. They could not identify crappy bus connectors, low-grade power connectors, or lousy fans (why do you think so many clones are sold with unreliable, bottom-of-the-line, sleeve bushing fans rather than reliable, high-quality, dual-ball-bearing fans?).
Yes, there is. I’ve been in the computer field, professionally (and as a hobbyist) for over three decades. I am a professional engineer at a very senior level. I’ve designed and built computers at the PC (printed circuit) board level (as in sent off to have PC boards shot for my design, stuffed the boards, tested and debugged them, etc.). I had to clean up after over 3K PCs bought to a spec and low-bid basis (rather than a qualitative engineering eveluation) started failing disastrously, idling electromechanical systems that cost in excess of $50K each. I have the experience and expertise to evaluate computers, the marketplace, and consumer behavior.
Because it would harm Apple and intelligent consumers to benefit other firms and know-nothings. Apple would lose market share for their hardware as the know-nothings bought substandard clones based solely on price, resulting in higher prices for Apple hardware (due to lower sales volume, lower discounts from parts suppliers due to reduced quanitities, higher overhead per system, greater NRE costs per system sold, etc.). When crashes occurred, the consumers would blame the OS (being used to running Microsoft, presumably), eroding Apple’s reputation for providing a very stable OS.
I hope that makes my objections and position clearer.
God you’re arrogant.
So what if people buy machines based on price? What’s wrong with that? Is that a crime? Who are you to judge people for buying based on price?
I can assure you that YOU buy based on price all the time as well. It just so happens that your expertise lies in the field of computing, and as such, you have the ability to examine the market in more detail. A lot of people cannot.
However, those very same people might be car specialists. Audio junkies. Gardeners. Professional sports players. Who knows. In all THOSE fields, they’ll be able to make a much more informed buying decision than you.
In those fields, YOU are the “know-nothing”.
I’m crushed — because I live for the approval of random strangers on the net.
As I stated, it erodes market share from companies selling good, or even adequate, quality products, sometimes putting those more reputable firms out of business or, at the least, driving their prices up as they attempt to stay profitable.
That is absolutely untrue. I do my research, whether it’s buying a computer, vacuum cleaner, car, boat, home heating system, lawn mower, motorcycle, etc. Price is sometimes a factor in my purchases, but it’s never an overriding one.
If someone does not have the expertise to make an informed purchase, they should seek out help from someone (not a salesman) who does have that level of expertise. Or they should do the research necessary to become informed consumers.
Really? So you think that my choices of VMPS speakers, a Linn turntable, Rotel CD player, Creek headphone amp, and Hafler power amp were uninformed ones? You think that I did not know what I was buying when I opted for Bilstein shocks, Flyin’ Miata anti-sway bars, and heim joint end links? People can have expertise in multiple areas.
But where you don’t have expertise? That’s what research is for. If I am going to buy something, I will do the research to assure that I buy a good one that meets my needs — rather than just buying whatever is the cheapest.
No, by the time I make a purchase, I’m damned knowledgeable about what I’m buying.
So I don’t know enough about you to jump to conclusions and you don’t know enough about me to do the same. Can we dispence with the personal attacks and elitist snobbery then? Oh, wait.. there it is.. assumptions about my understanding of the computer industry.. guess not.. Good for you.. a firmware developer..
How does “support” require Apple to produce an osX that boots on all platforms? They currently require a limited scope of hardware to run the OS so why should that change? Why can’t it remain up to the hardware vendors to stay within the supported scope of the OS? What is forcing Apple to support standard BIOS boot rather than EFI (I believe that’s it anyhow, your the firmware developer though right?). We’re not talking about home installs either here, we’re talking about systems built to run osX so why would the OS disk suddenly not boot? System is purchases running preinstalled osX, hypothetical user buys upgrade osX disk and inserts it; well crap.. look at that.. it boots because nothing has changed in the hardware config.
Are you privy to Apple’s budget? Can you confirm that the R&D budget would take a gross hit due to software sales without hardware? Care to confirm that software sales are not well enough into the profit margine to continue supporting the business? Are Apple’s marketing geniouses not up to the task of differentiating between official products and clones? Poor consumer judgement automatically equates to branding death?
Seriously? You know a lot of hobbyists who think a 400$ machine is built from the top of the line parts? Funny, the hobbyists I know take days to select each component based on functions, quality and history.
See.. and now we have some background to provide a basis for trust. “Trust me on this” doesn’t really offer much detail but a professional history does help. So, three decades in computers and engineering in a professional compacity. Aperently not a lot of diplomacy in that past with the way you come out swinging blindly but I gotta believe you have the technical knowledge. You could have skipped the back and forth posturing and just clarified with your last paragraph also.
Perhaps companies produce equal quality hardware and the margins Apple currently enjoys becomes a little less justifiable. In that case, reduced Apple market share would be valid while they would still retain all OS and application software sales. What if reduced volume sales plus competition don’t equate directly to increased costs of official Apple products? This whole thing is a what-if situation at a time when computers are no longer a strange novelty. If the basis for comparison is IBM loosing the desktop computer market due to clones; that’s done a huge amount for computing though at the expense of Microsoft’s OS domination.
fmaxwell: As I alluded to in my other post, who gave Apple the right to no competition? I don’t give two craps whether Apple’s bottom line takes a nose dive or not. No one is entitled to market. If they can’t keep their customers with their products, then they have two choices. Stop selling retail copies of OS X or make products that people want to buy over Psystar. They just can’t be a bunch of whiny bitches and complain that some one else came and took what they left sitting along the road. (that would be the lower end consumer market) By the way, Apple uses bottom of the line hardware that they buy in bulk. So they can’t be much better than Psystar.
I and a many, many others do care! 🙂
We’re normal individuals and families who own a stake in a successful company with a well-performing business model. Their value lies in their package of software AND hardware.
If this value were to “nose dive” as you put it, we would take our money elsewhere. Sadly, I see this happening unless Apple takes some very aggressive action against clone manufacturers, or withdraws the OS from retail.
You have done well for your customers and shareholders so far Apple, keep up the good work! 🙂
This inevitable outcome assumes Apple is like Microsoft in considering product and market stagnation a business strategy. Apple may well be able to respond to competition and differentiate itself from third party retailers.
Is this shareholder fear that your equity payments will be reduced or consumer fear that your brand loyalty will be tested? Maybe it’s a concern that the unwashed masses will enjoy osX but without the premium for the light up brand mark?
It’s not even like Apple would have to change osX; those who choose to sell osX systems will be responsible for using compatible hardware. And, there is still that pesky huge software market Apple would continue to sell too; possible larger due to more consumers with the base system.
(las time I looked at ram for the power book at the Apple store, it was twice the cost of ram anywhere else including apple hardware resellers.. hm…)
The federal government. That’s what copyright and patents are for. Apple owns the rights to OS X. If they want to license it for use solely on their systems, they have a right to do that. Psystar and other potential clone manufacturers have no “right” to use Apple’s intellectual property.
Wow, you really have no understanding of intellectual property law at all, do you? Apple has a right to set the terms of the license under which their intellectual property (OS X) is used. Period. If Apple wants to remain a premium brand and not have their OS associated with bargain-basement (Psystar) hardware, that’s their call.
Really? So the server-class dual, four-core Xeon processors in my Mac Pro are “bottom of the line hardware”? The case, which has been described as the best in the industry is just “bottom of the line” stuff bought in bulk? The ECC memory modules, complete with Apple-specific heatsinks to allow cooling with quieter fans are just cheap stuff bought in bulk? Please, tell us where we can all buy these components.
It’s Copyright law or patent law.. “intellectual property” is a buzzword mean to confuse the two. I understand clearly how it is used in meeting rooms; doesn’t make it more right though.
But, the very question of this case is if EULA is a valid contract. Copyright and Patents are completely separate as the product is legally purchases; no copyright infringement, no patent infringement. Can a company say “sure, you can buy our car but only drive it on Tuesdays in the green lanes.”
In software, it’s often both — as it is in this case. Apple holds a patent on the OS X dock (granted in October of 2008) as well as copyright on the operating system.
The term “intellectual property” was used properly and it is in no way a “buzzword”. It encompasses software patents, copyright, trademarks (e.g., the Apple logo, “OS X” name, etc.).
Software patents are another topic all together. Perhaps there is a legal definition of IP these days but I’ve yet to see it used beyond the intention of confusing copy, patent and trademark law.
I was less than perfectly clear in my response to the original post:
Software patents are what prevent a potential competitor from creating an OS that is functionally identical to OS X.
Software copyright is what prevents a potential competitor from using OS X in a way not approved by the copyright holder.
Seems there’s a second article and insuing discussion on the go. More hardware based also.
They can certainly say it, and they could make it binding by agreeing to sell the car to you only on condition that you sign a binding contract to only drive it on Tuesdays in the green lanes. If you violated the contract, they could sue you (although they would have to make a case that your violation of the contract has in some way harmed them or cost them money). They don’t need to have a copyright or patent on the car to do this, because contracts are separate from patent and copyright law. So it all turns on whether or not you are actually agreeing to a contract when you click the “Agree” button on the contract that appears when you install OS X.
Edited 2009-07-04 21:09 UTC
Dont start mixing EULA’s with copyright and patents. I am all for copyrights and patents. Psystar isnt stealing their copies of OS X. They are buying them at the price Apple sets. Apple could chose not to sell them, but they do. EULA’s have never been tested and are therefore legally shaky.
And yes, they often do use low end hardware. But maybe I should have said the same hardware everyone else uses. They use generic ram, which they charge 2x the going price for. Until recently you couldn’t even get 7200 rpm drives in their notebooks. Look at their product lines: They had the bad ipod cases, the bad batches of batteries, the defective video cards…. Doesn’t really sound like they are buying the high end components to me.
I’m not “mixing” anything. Because Apple owns copyright and patents, that defines their ownership of the work — and why they have the right to set licensing terms.
Apple has not set a price for the use of its OS on non-Apple hardware. In fact, they specifically exclude such use. Software vendors have a right to charge differently, and set different terms based on how their software is used. For example, there are many software products which are free for personal/home used but which have a cost when used in a business environment.
They sell a license, which Psystar is violating.
First off, bullshit. If you go over to Wikipedia, you can find numerous cases in which EULAs have been tested in court. Secondly, if Psystar thinks that Apple’s particular EULA is invalid, then they should challenge it in court and leave it up to the courts to decide.
So who else is using laptop cases milled from solid blocks of aluminum? Who else is using the case used on the Mac Pro? Who else is using the drive sleds used in Apple’s Mac Pro? Who else is using the Apple MagSafe power connectors and Mini DisplayPort connectors? Is some other manufacturer using the IR remote that Apple provides for their laptops?
The RAM in my 2008 Mac Pro is not generic. It’s got heatsinks which are unique to the Mac Pro and the AMB on each module communicates temperature to the CPU. As far as other RAM (MacBooks, Minis, etc.), it follows industry standards — but Apple does not just buy whatever is cheapest.
Just as Dell charges far more than the street price when you order options at build time from them. In both cases, you end up with warranty coverage for the whole system. To me, it’s not worth it. To someone else, it might be.
So? Until recently, 7,200 RPM hard drives made more noise, consumed more power, and produced more heat. Frankly, 5400RPM was a better choice for the majority of users.
I work in the satellite industry. We buy the absolute best of everything. We have coax RF cables that cost more than your entire computer. We still have failures, both on the ground and in orbit. Failures, manufacturing defects, and latent design flaws are just a fact of life, not an indication that a company is buying substandard components.
Don’t be so transparently dismissive. Some of the firmware I’ve developed includes multi-tasking firmware (including schedulers and real-time kernels) embedded in satellites and ground station equipment, with much of it being written in assembly language. It takes a lot greater understanding of hardware to do the work I do than it does to write GUI apps.
I didn’t say on “all platforms,” did I?
So you want Apple to publish complete hardware specifications, naming multiple different processors, motherboard chipsets, graphic chipsets, temperature sensors and locations, fan locations, etc to which they guarantee the OS will be compatible in all combinations. That’s support in my book.
If it’s so easy, then please explain why Psystar includes this on their web pages:
For something so easy, they sure are having trouble doing it.
No, and neither are you. So we are both speculating.
If you want to resort to straw man arguments, attributing claims to me that I never made, then you can declare yourself the winner and I’ll move on. I never made any statement that effect (that a lot of hobbyists think that a $400 machine is built from top-of-the-line parts).
These same hobbyists who don’t know Ohm’s Law and couldn’t operate an oscilloscope are suddenly able to judge the quality of motherboards, wave soldering, DIMM carriers, electrolytic and tantalum caps, and switching power supplies? Just get on the forums where these hobbyists are all contradicting one another (Asus rocks! Asus sucks!). Yeah, they’re all experts.
I thought that my initial post to this thread was well-reasoned and level-headed.
Thank you. I assure you that I am not attempting to BS you or anyone reading this.
I don’t think that Apple has some kind of monopolistic hold on the computer market like IBM did. Nor is Apple marketing unimaginative, low-performance products like IBM was. Apple’s stuff is top-drawer, whether measured on industrial design, aesthetics, noise level, or performance. Losing that would harm the entire computer market. So would losing the Apple store business model where customers can get hardware service, software support, and educational classes. Take away the hardware sales and that goes away, too.
You’re proposing a grand experiment with a lot of potential pitfalls for Apple. To me, the potential benefits of cheaper hardware don’t justify the risks.
“So you want Apple to publish complete hardware specifications, naming multiple different processors, motherboard chipsets, graphic chipsets, temperature sensors and locations, fan locations, etc to which they guarantee the OS will be compatible in all combinations. That’s support in my book. ”
You’ve got this completely backwards. Exactly how does hardware resellers staing within the supported limits of osX suddenly require Apple to produce full specs? It seems hardware resellers can all ready stick within the supported limits of osX as can the hobbyists. Heck, it’s a BSD underneath so the core and base is already out there. Darwin didn’t suddenly evaporate did it? Did Apple stop publishing the base hardware specs of it’s own system?
You suggested that Apple would suddenly have to write drivers to support extra hardware; I’m saying it still up to the resellers to deal with that or stick to the same already published base build specs of the Apple systems.
Is Psystar saying it won’t support osX on it’s systems or that it won’t support user self installed OS? Isn’t that it’s fair choice to do so and wouldn’t that reduce it’s own reputation and ability to compete? Apple can still say “we don’t support non-Apple hardware”. If Psystar is providing updates, won’t they then be obligated to provide a Leapard update at some point? Isn’t this the same as any self install on a prepackaged block of hardware? Dell isn’t going to support my Dell hardware when I blow away Windows or Ubuntu and put a different OS on it; heck, probably won’t support it if I don’t use the Dell install disk even if I did use one of those two brand names.
You suggested that hobbyists buy crap hardware based on price alone and suggesting that they have no clue about hardware quality. I’m simply asking about this. You put the straw man on your porch, I’m simply asking about the construction of it.
These things always start out civily. For me, it was your “you have a grossly simplified” and following exajurated assumptions about me that helped to devolve the discussion and my responses in like kind where probably not helpful either.
Apple does not have the crap marketing of IBM or the market inertia strategy of Microsoft. It is a very different company. More different even than it was when allowing clones in the past. The very market itself has changed and become much smarter about computers. You seem to suggest that Apple can’t compete unless it is the only vendor of osX rather than the only vendor of osX on Apple hardware. If there is anything Apple does well, it’s brand loyalty and marketing. heck, the could charge a premium for nonApple hardware classes and still not have to support the hardware directly “we support Apple official hardware and osX on Apple hardware but if you’d like to purchase training.. we can talk”
I just don’t think brand destruction is the only possible outcome. If the court case finds EULA less valid then it will mean some changes but the ultimate outcome may very well be to Apple’s own benefit. They are not the lethargic Redmond monolith or International Business Machines.
As a grand experiment, Apple would have to go willingly. Corporate law obligates Apple to fight tooth and nail for any potential profit sources. If you don’t fight infringements on your trademark then it becomes void. I don’t suggest the role over and hand off the goods by any means. It will take the outcome of the case to decide what happens.
Please provide me with a link that fully defines the “supported limits” of OS X.
Apparently not since Psystar has to have special helper disks in order to even restore the OS. You can’t even change it to dual-boot yourself — you have to do that at the time of order.
So by your argument, any system that works with BSD should be fine with OS X?
Apple does not publish the base hardware specs of its systems. They publish general consumer-level specs, but not engineering specs.
If I tell you that a microcontroller board has a Ooopty Flop 2861 USB Controller, I have not told you whether it is a memory mapped peripheral or an I/O mapped peripheral, what address it lives at, what clock speed the crystal is that it’s using for reference, etc.
They are saying that their systems are not fully compatible. You can’t put in a replacement hard drive and an OS X distro from the Apple store and just have it work. In fact, they’ve even mucked with the OS so that it gets updates from their servers because updates from Apple could brick their systems.
See above.
Apples and oranges (no pun intended). Psystar is not talking about replacing OS X with something else. In fact, they are saying that you can’t even use the built-in OS X Boot Camp feature. On the Dell, if you install Windows from Microsoft disks, it will work. If you get updates, they come from Microsoft, not Dell. If a Dell driver or hardware causes a problem, Dell will provide support.
I am trying to remain civil here, but what you are attributing to me is not what I wrote, at all. I wrote:
Now where, in any of that, did I say that they bought on price alone?
In some ways, but not others. People are less savvy about the hardware (since so few of them have even soldered parts into a PC board).
No, I’m suggesting that they would lose market share. Those customers who are paying a premium for Apple hardware solely because it is their only path to using OS X would drift away to manufacturers of cheap clones. That’s a significant hit that Apple would take and it could result in retail cost cutting measures to retain those buyers. That could be anything from using lesser components to cutting their profit margin — and, hence, the amount that they could spend on R&D. I’d hate to see that happen.
I don’t either, but that is one possible outcome and not an unlikely one.
I’m hoping that the decision goes their way, but, if it does not, I hope that my concerns turn out to be unjustified.
Ok, one more round and then we’ll just have to both accept that your going to accept that we have different opinions on the topic of if Apple could compete with other osX running hardware vendors or not.
I am but a lowly consumer far below your might and engineering experience so by “support limits” I meant what general hardware osX will run on without Apple modifying the system. Example; the consumer level specs. Example; the vanilla hackintosh system one of OSNew’s own writers setup without any modification of hardware or software. (But, I’m probably wrong in not considering a boot loader anything special too now.)
I’m also not aguing in favor of Psystar specifically but the general concept of osX sold with non-Apple hardware. Based on the above, there is no real technological hurdle. Use EFI instead of BIOS and there is absolutely no difference in terms of bootup. Heck, you can buy a USB dongle with EFI on it that boots osX natively; not rocket science.
My point regarding BSD is simply that the kernel is there already so even if (notice the “even if” part) Apple chose to release kernel level support, it’s not like they are releasing there own copyright or patent content. BSD, and specifically Darwin, is not a trade secret; the kernel is already out there. Is that not a big reason Apple suddenly works with such a wide range of hardware; maybe the marketing about how all but Windows only printers work without additional drivers is bunk.
So, let’s ignore Psystar beyond the case involving if EULA is as valid as Apple claims and suggest a vendor who is using fully compatible hardware be it based on experimentation or direct help from Apple. Again, the only technological protection against installing osX on non-Apple hardware is the motherboard firmware. Drop the IBM/Phenix BIOS and go with the other publicly available standard and booting off the install disk is a non-issue.
The first time I heard about Psystar, the first question I had was how they managed OS patches. Again, this is a problem for the third party hardware vendor not Apple. If Psystar can’t provide updates or enough Hardware compatibility to support bootcamp or the install disk, doesn’t that make most of this moot? Consumers purchase products from the company and find out it doesn’t work like an Apple. They scream at the company and it either fixes it or the consumers go to official Apple hardware; isn’t that how competition is supposed to work (assuming the computer industry was a remotely healthy capitalist market)
Now, why is Dell’s situation so different though. Again, Apple can choose not to support non-Apple hardware in the same way that Dell does not support non-Dell software drivers. Put it in the text that a consumer can read before purchase (rather than the hidden EULA after purchase) and I don’t see where the big problem is.
“(fmaxwell) It even happens with the “hobbyists” who buy motherboards based on features rather than construction. They don’t know what bypass caps are, why they are important, or how manufacturers cut costs with cheap ones. They could not identify crappy bus connectors, low-grade power connectors, or lousy fans (why do you think so many clones are sold with unreliable, bottom-of-the-line, sleeve bushing fans rather than reliable, high-quality, dual-ball-bearing fans?).”
Your original quote which you’ve provided still indicates that hobbyists don’t know quality at all and as a result, buy blindly. Consumers who’s only “research” is listening to the store salesman perhaps but hobbyists are those people who pay attention to the hardware details and problem postings in help forums. Consumer are somehow not going to realize that the hardware they are buying is not official Apple products? Again, a company putting out bad hardware is going to get known. People with knowledge are going to continue to point out the difference between software and hardware issues. It’s not like the only possible outcome is brand destruction.
Some people will drift away to the cheaper hardware, sure.. I think people realize the difference between Windows on Dell and Windows on IBM or Lenovo.. why would people suddenly become clueless about osX on Apple or osX on third party hardware? Isn’t competition in the market place what is supposed to help reduce prices and increase quality and innovation? MS has done all they can to stomp that healthy market effect out but we’re talking about a much smaller market with osX preinstalls and the Apple brand isn’t just going to fall over with the first gust of wind is it?
either way, we have completely different opinions on the topic and I think our points have been made back and forth enough. I’m not going to suddenly believe that Apple will go bankrupt over a little competition and your not going to let go of the idea that it will cause unaddressable harm to the company. Hopefully, we’re both third party observers that will just have to wait and see what the courts decide.
Apple does great design and provides solid hardware. If I couldn’t buy Toughbook or Lenovo, I’d be happy with an Apple rig though it wouldn’t survive the first night without becoming triple boot; no sense in limiting it to one or two platforms. We’ll see how long they are able to litigate osX preinstall competitors out of the market though. I sure haven’t an idea which way the case is more likely to go.
Anyhow, nit-pick away if you like. Our positions are clear enough and I’m ready to move on.
I don’t think that the sarcasm is really adding a lot to our discussion.
And a very perceptive question that was. There are going to be a lot of angry Psystar customers if/when Psystar’s upgrade servers go down.
In reality, many consumers will probably blame OS X. They will, without consulting manuals, support lines, or anything else, try to make Boot Camp work and their systems will be hosed. They will call Apple. They will search all over Apple’s web site. Apple will incur a non-negligible cost in dealing with such calls.
It’s not. That’s what scares me. I don’t want Apple to become another Dell, with no retail stores, no local hardware repair, tech support farmed out the second and third world countries, and computers that are really just cookie-cutter stuff that lacks innovation. I’ve got a couple of Dells here at home. I used a Dell laptop at work. Not very impressive systems. Flimsy plastic cases, noisy brute-force cooling, etc. Basically, they are reliable systems but built to keep costs down. Take away Apple’s healthy profits and I’m afraid that’s what they will become.
No, my original quote indicates that *some* hobbyists are unable to *fully evaluate the quality* of a product and sometimes make bad decisions as a result.
So far, you have accused me of having said that hobbyists expect $400 systems to use premium components. I never said that. Then you accused me of having said that hobbyists buy crap hardware based solely on price. I never said that. Now you accuse me of saying that hobbyists “buy blindly,” which, again, is nothing like what I said.
Again, this would be more convincing were the hobbyists forums not filled with contradictory statements where, in a single thread, a manufacturer is proclaimed to “rock” and to “suck.”
Not a claim I ever made.
The consumer will buy the Mac clone on Sunday afternoon. They will experience multiple application and operating system crashes actually caused by the poor regulation and noisy DC from the low-grade power supply. Since they will have seen the operating system and applications crash, they will assume that the problem is related to the operating system. They will go to work on Wednesday and tell their coworkers how OS X is not any more stable than Windows and that they made a big mistake in trying to switch.
Doubt me? I’ve dealt with someone who swore that Windows XP was horribly unstable. It had nothing to do with XP. It was because the crappy fan on the undersized heatsink applied with with a thermal “pad” was failing to keep the CPU cooled. When I put a decent heatsink and fan on, suddenly the system became reliable.
And yet there are so many selling in the PC marketplace.
Agreed. It’s been an interesting discussion.
I’ve got Windows running full-screen on one of my monitors on virtual desktop 7 under Sun’s VirtualBox package. I can also boot OpenSolaris, gOS, and FreeNAS (just what I’m currently experimenting with).
Sorry you chose to end on that note.
I really thought you were gonna use this text to ask (again, we’ve heard it all before) why microsoft retail prices are so high (legitimate question btw) but the mac clone case is even more interesting.
I think apple is really trying to build their ecosystem and don’t see one single product alone, they come “bundled together” in their point of view. How many ipod user decided to try buying a mac afterward? Selling their OS without a margin (or a low one, if any) is really not a problem to them and I don’t really see why it’s relevant to even discuss this.
They don’t want mac clones because of the lack of control and the argument of the price is, I think, not even on apple’s mind: it’s their public perception they’re most concerned about.
LeT’s hope for mac OSX in a VMs soon :/
I’d love to add osX to my VM hosted OS collection.
It would be true that Apple is being ripped off but wouldn’t we hear about from Apple? When Microsoft suspected that many GPL software developers were stealing code from them, they made a huge stink about it. I think Apple would do the same if they suspected any infringement on their products. we’ll just have to wait and see.
where is the proof? in the pudding.
For an explanation of the phrase:
http://www.hotforwords.com/2008/07/24/the-proof-is-in-the-pudding/
Sorry, I couldn’t resist.
I find it funny that one of the biggest arguments that people use against Psystar is that they hurt Apple. Lets look at the ever useful car analogy. Do we blame cheap tire makers for hurting Ferrari? I mean, if I stick crap tires on my Ferrari, is that company hurting Ferrari? Should only Ferrari be allowed to make Ferrari tires? The law says no. Apple sells a retail product, regardless of what they intend it to be used for. Is it really illegal for some company to come along and stick crappy hardware with and sell it? Should it be?
…for some people.
It has nothing to do with subsidising in the form you are poorly attempting to portray it Thom. It has EVERYTHING to do with the target market for the product.
A “Retail” copy of OSX will be purchased by someone who is using a product that was PREVIOUSLY PURCHASED FROM APPLE. Therefore, Apple will have previously made money from that person, or the person / company who originally purchased the equipment on which that “Retail” OSX license will be used. It is therefore very much like an upgrade version of Windows – the client has previously purchased another qualifying product from Microsoft so they get the next one(s) cheaper – hence it is priced similarly to an upgrade version of Windows. An “Upgrade” version of OSX will almost always require the previous major release to install, it will not install on anything earlier than that.
In the Pystar case, the users of these “Retail” versions of OSX have not previously purchased equipment from Apple on which to use that product, therefore Apple’s sole profit is on THAT software transaction. And those users will then expect Apple to support that software – even though they (Apple) have no say in or control over the hardware (Windows OEM) – and those users will also expect Apple to offer them the same “Upgrade” facilities as those who have purchased an Apple hardware product. A blind man on a galloping horse (well, one who still has both eyes and has even some semblance of marketing knowledge) can see that…
You can’t compare an OEM Windows license with an OS X license because the terms of both are very different.
An Windows OEM license gets bound to an motherboard upon install, so you don’t have the right (and possibility) to keep using your Windows OEM License when you buy a new computer. An OS X license can be legally used on one computer and i keep that right even if i buy a new one (if that one is supported, but that problem occurs on windows as well).
That why you can only compare Windows Ultimate Retail with OS X. Windows could still be overpriced, but that is a different matter.
You can’t do an direct comparison between the prices of any software, without considering the volume of sales.
For a very simple example:
price = markup * (R&D_costs / volume + cost_per_copy)
The cost per copy is probably close to $2 (if you include printing sleeves and a small manual or something), and probably doesn’t make much difference in the final price.
The R&D costs are huge – probably millions of dollars. If you only sell one copy of the software you’d need to sell it for an insanely large amount to recover costs, but if you sell a few billion copies then development costs aren’t going to add much to the final price.
The point here is that Apple sell at lot less copies of their OS than Microsoft do, so their R&D costs are going to represent a much large percentage of the final price of the OS; and therefore you might expect the cost of OS X to be a lot higher than the price of Vista.
Of course there’s lots of other variables here. For example, I’d assume Apple spend a lot less cash on OS development than Microsoft do, simply because they don’t need to care if it works on a wide variety of hardware (they only need to support hardware they sell).
-Brendan
Exactly! They support a limited amount of hardware, their development team can be fairly small. They are tightly controlling what is done and what needs to done and they obviously have well developed processes in place for building and QA (ex. they had been building OS X on multiple platforms from the get-go while only supporting PPC in the beginning).
I am sure they automate as much as possible.
This is a very difficult question to answer. We can presume that Apple’s pricing of the OS is chosen to maximize, so far as Apple can determine, Apple’s overall profit. So framed in economic terms, it comes down to, “If Apple sold OS X as a stand-alone product for non-Apple computers, what price would maximize Apple’s profit, and is it less than the price at which Apple sells the OS as an upgrade to its own computers?
Note that this has very little to do with the cost of creating the OS