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Apple wins permanent injunction against clone Mac maker Psystar - Page 3

post #81 of 116
Quote:
Originally Posted by DJRumpy View Post

Actually it does come with a EULA, when you get your new mac, it has the agreement in the box with the software.

Yes, and its the software that the license is for...not the hardware. This is why you have to agree to the terms when installing Mac OS upgrades or even upgrades for iTunes, etc. You don't buy a license to use the hardware...you buy the hardware itself.

Quote:
ALL copies of OS X that you buy in the store are upgrades since you can only install them on Mac hardware,

That's ridiculous. It's a full version of OS X. Where it can be installed has nothing to do with the term "upgrade." It would only be an upgrade if you were required to own a previous copy of OS X for it to work. As it stands, you could have a hard drive or Mac with no OS on it. You could buy OS X and install it, clean. In fact, I do it all the time. That's what a clean install is.

Quote:

and you always get a license for OS X on every new Mac.

Well...yes, but that really has nothing to do with the discussion. It's more pricing/marketing. Macs come with OS X, which is really more of a license to use OS X (as I think you stated). However, since the Mac can run other OSes, Apple doesn't have to sell it that way...they just choose to (and for good reason). In other words, you're really buying two products. Apple is just pricing them together.

And, as I've mentioned before, don't forget that Macs can run Windows. Does Apple grant you a license to use Windows? Of course not. Does Microsoft prevent you from running Windows on your Mac? No. Therein lies the problem for Apple. When you buy Windows, you can install it on any machine capable of running it. When you buy OS X, you are only allowed to install it on a Mac. You can't even build your own machine.

Quote:


As to Psystar, they could never actually produce any receipts for OS X from what I recall. Did that change over the course of the trial?

I hadn't heard. I don't think it matters either way. They were still re-selling Apple products and infringing on trademarks. As I said, if they sold the machines as merely being capable of running Mac OS X, that might be different.
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post #82 of 116
Quote:
Originally Posted by SDW2001 View Post

That's ridiculous. It's a full version of OS X. Where it can be installed has nothing to do with the term "upgrade." It would only be an upgrade if you were required to own a previous copy of OS X for it to work. As it stands, you could have a hard drive or Mac with no OS on it. You could buy OS X and install it, clean. In fact, I do it all the time. That's what a clean install is.

You seem to be missing the point. You cannot buy a Mac without buying OSX. Therefore, any subsequent version of OSX that you buy is by definition an upgrade to a version which came installed on your Mac. The fact that you are able to install it on a hard drive which you have wiped is of no consequence. The fact that the installer does not check for a previous version is also of no consequence. It is still an upgrade.
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post #83 of 116
Quote:
Originally Posted by Dr Millmoss View Post

You seem to be missing the point. You cannot buy a Mac without buying OSX.

So what? The two are not one in the same. You can run other OSes on the Mac. It's just that Apple chooses to include it.

Quote:
Therefore, any subsequent version of OSX that you buy is by definition an upgrade to a version which came installed on your Mac.

Yes, but it's not "just" an upgrade. Before intel, you could upgrade an OS9 machine too. That's because it's a full version.

Quote:
The fact that you are able to install it on a hard drive which you have wiped is of no consequence. The fact that the installer does not check for a previous version is also of no consequence. It is still an upgrade.

No, it's not. You are buying a copy of OS X and the license to use it. Let's put it this way: I'm upgrading if I change my car's tires, seat covers, stereo, etc. I'm not upgrading if I buy a new car. The new one functions completely independent of the previous one. Same with OS X.
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post #84 of 116
Quote:
Originally Posted by SDW2001 View Post

So what? The two are not one in the same. You can run other OSes on the Mac. It's just that Apple chooses to include it.

No, a Mac is the hardware together with the OSX. Neither alone is a Mac. Is this not obvious? You are mistaking what is possible for what you are permitted to do under the license. Your car analogy simply does not fit the situation.

BTW, please do not try to deconstruct my arguments. I wrote four, short sentences, all on the same subject, supporting the same point. Surely you can respond to it as such.
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post #85 of 116
Quote:
Originally Posted by Dr Millmoss View Post

No, a Mac is the hardware together with the OSX. Neither alone is a Mac. Is this not obvious? You are mistaking what is possible for what you are permitted to do under the license. Your car analogy simply does not fit the situation.

BTW, please do not try to deconstruct my arguments. I wrote four, short sentences, all on the same subject, supporting the same point. Surely you can respond to it as such.

Exactly. He assumes because that's teh way that Microsoft works, that all software must be the same, when nothing could be farther from the truth. Microsoft isn't a hardware manufacturer for PC's. They sell the OS, but they have no hardware for it in the PC market. They license the OS for resale from all sorts of vendors and manufacturer's. It is ALWAYS a separate product.

A Mac is a closed system, much like a Microwave, an MP3 player, or a TV. The software that makes it function comes with the hardware. You wouldn't buy a Microwave expecting that you would then have to go out and by the OS to make it actually function.

Honestly at this point, I don't even know what SDW is actually arguing for or against. He's all over the place from Hardware, to software, EULA's to marketing.

The simple fact, is that Apple can license the OS to whomever they choose, and they choose not to license it to anyone but Mac users. ALL OS X licenses sold in retail are upgrades. When you buy a Mac, you get OS X with it. Any subsequent license purchases of the OS would be upgrades to the existing OS. You cannot force a manufacturer to license their software to someone if they choose not to. If you happen to get their OS running on another piece of hardware, good for you, but don't expect they will suddenly start selling you licenses as a result, and you certainly can't force them to either. Apple sets the terms of the license, NOT the buyer. If you don't like the terms, don't buy it. Make no mistake though, you are not buying the software, you are buying a license to use the software within the terms of said license.
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post #86 of 116
Quote:
Originally Posted by Dr Millmoss View Post

No, a Mac is the hardware together with the OSX. Neither alone is a Mac. Is this not obvious? You are mistaking what is possible for what you are permitted to do under the license. Your car analogy simply does not fit the situation.

BTW, please do not try to deconstruct my arguments. I wrote four, short sentences, all on the same subject, supporting the same point. Surely you can respond to it as such.

I'll respond as I deem appropriate. I didn't change your meaning.

I don't know that I agree about what a "Mac" is. I think that what can be done with it is very important. Since it's not tied to OS X completely, the two are somewhat separate.

Regardless, the point was in reference to OS X being an "upgrade" when purchased at retail. This is not true. The disc contains the full OS. There are options to upgrade or do a clean install. It's not an upgrade just because a "Mac" includes OS X to begin with.
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post #87 of 116
Quote:
Originally Posted by SDW2001 View Post

I'll respond as I deem appropriate. I didn't change your meaning.

I don't know that I agree about what a "Mac" is. I think that what can be done with it is very important. Since it's not tied to OS X completely, the two are somewhat separate.

Regardless, the point was in reference to OS X being an "upgrade" when purchased at retail. This is not true. The disc contains the full OS. There are options to upgrade or do a clean install. It's not an upgrade just because a "Mac" includes OS X to begin with.

If the two are separate, then you could buy just the Mac without the OS from Apple. Obviously that isn't the case. Just because Microsoft's OS is not tied to the hardware, doesn't mean every manufacturer out there must follow the same business model. As to the upgrade argument, it's irrelevant. Psystar isn't licensed to use OS X on non-Mac hardware. They tried your argument, and lost in court.

upgrade
- 6 dictionary results
Upgrade
up⋅grade
  /n. ˈʌpˌgreɪd; adj., adv. ˈʌpˈgreɪd; v. ʌpˈgreɪd, ˈʌpˌgreɪd/ Show Spelled Pronunciation [n. uhp-greyd; adj., adv. uhp-greyd; v. uhp-greyd, uhp-greyd] Show IPA noun, adjective, adverb, verb, -grad⋅ed, -grad⋅ing.
Use upgrade in a Sentence
See web results for upgrade
See images of upgrade
–noun
1. \tan incline going up in the direction of movement.
2. \tan increase or improvement: an upgrade in the year's profit forecast.
3. \ta new version, improved model, etc.: The company is offering an upgrade of its sports sedan.

Doesn't seem to mention if the software is complete in and of itself.
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post #88 of 116
Quote:
Originally Posted by DJRumpy View Post

If the two are separate, then you could buy just the Mac without the OS from Apple. Obviously that isn't the case. Just because Microsoft's OS is not tied to the hardware, doesn't mean every manufacturer out there must follow the same business model. As to the upgrade argument, it's irrelevant. Psystar isn't licensed to use OS X on non-Mac hardware. They tried your argument, and lost in court.

upgrade
- 6 dictionary results
Upgrade
up⋅grade
  /n. ˈʌpˌgreɪd; adj., adv. ˈʌpˈgreɪd; v. ʌpˈgreɪd, ˈʌpˌgreɪd/ Show Spelled Pronunciation [n. uhp-greyd; adj., adv. uhp-greyd; v. uhp-greyd, uhp-greyd] Show IPA noun, adjective, adverb, verb, -grad⋅ed, -grad⋅ing.
Use upgrade in a Sentence
See web results for upgrade
See images of upgrade
–noun
1. \tan incline going up in the direction of movement.
2. \tan increase or improvement: an upgrade in the year's profit forecast.
3. \ta new version, improved model, etc.: The company is offering an upgrade of its sports sedan.

Doesn't seem to mention if the software is complete in and of itself.

If you mean upgrade as in "better features and functionality," then we don't disagree on that. But, that is not how you used it the first time. Now, you're just trying to win an argument.
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post #89 of 116
Quote:
Originally Posted by SDW2001 View Post

If you mean upgrade as in "better features and functionality," then we don't disagree on that. But that is not how you used it the first time. Now, you're just trying to win an argument. That's really a waste of time.

Or perhaps the rest of us simply understand what an 'upgrade' means. What's included in the upgrade is irrelevant as long as it IS an upgrade.

From our standpoint, and the courts apparently, you're just being purposely obtuse.
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post #90 of 116
Quote:
Originally Posted by DJRumpy View Post

If the two are separate, then you could buy just the Mac without the OS from Apple. Obviously that isn't the case. Just because Microsoft's OS is not tied to the hardware, doesn't mean every manufacturer out there must follow the same business model. As to the upgrade argument, it's irrelevant. Psystar isn't licensed to use OS X on non-Mac hardware. They tried your argument, and lost in court.

You get it, he doesn't. But then, a lot of people don't seem to get it. I'm not sure what people who don't get it expect, but it seems they expect either (1) Apple to adopt Microsoft's business model, or (2) some sort of restriction in the OSX installer that prevents them from doing what the software license already prohibits them from doing.

Of course (1) leads to the destruction of the Mac and Apple as we know it; and (2) creates a pain in the neck for all of us, just to satisfy those who think that if something is possible, they have permission to do it.

Apparently this debate must go on and on, even after Psystar got themselves completely thumped in court as their reward for testing both of these theories. Still, some are never going to get it.
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post #91 of 116
Quote:
Originally Posted by DJRumpy View Post

Or perhaps the rest of us simply understand what an 'upgrade' means. What's included in the upgrade is irrelevant as long as it IS an upgrade.

From our standpoint, and the courts apparently, you're just being purposely obtuse.

No, you clearly don't understand what it means. And yes, it does matter if it's "just and upgrade" or an "upgrade to functionality and features." The former definition is what you used to argue that one cannot install OS X on certain hardware. But OS X as sold at retail does not meet that definition. It can be installed with or without a previous version of OS X. What's included is completely relevant. Some software does meet that definition. If you don't own the previous version, you can't purchase the upgrade. OS X is not at all like that.



Quote:
Originally Posted by Dr Millmoss View Post

You get it, he doesn't. But then, a lot of people don't seem to get it. I'm not sure what people who don't get it expect, but it seems they expect either (1) Apple to adopt Microsoft's business model, or (2) some sort of restriction in the OSX installer that prevents them from doing what the software license already prohibits them from doing.

Of course (1) leads to the destruction of the Mac and Apple as we know it; and (2) creates a pain in the neck for all of us, just to satisfy those who think that if something is possible, they have permission to do it.

Apparently this debate must go on and on, even after Psystar got themselves completely thumped in court as their reward for testing both of these theories. Still, some are never going to get it.

I do get it. You simply refuse to read what I'm writing. You're also using a straw man. I don't want Apple to follow Microsoft's business model. Killing the clones was a good and necessary step. However, I disagree that Apple should be able to legally prevent you from modifying your machine to run the OS that you purchased. You don't have to agree with me. It's just my opinion.
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post #92 of 116
Quote:
Originally Posted by SDW2001 View Post

I do get it. You simply refuse to read what I'm writing. You're also using a straw man. I don't want Apple to follow Microsoft's business model. Killing the clones was a good and necessary step. However, I disagree that Apple should be able to legally prevent you from modifying your machine to run the OS that you purchased. You don't have to agree with me. It's just my opinion.

I have read what you have written, including the above -- which is additional convincing evidence that you don't get it.
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post #93 of 116
Quote:
Originally Posted by SDW2001 View Post

No, you clearly don't understand what it means. And yes, it does matter if it's "just and upgrade" or an "upgrade to functionality and features." The former definition is what you used to argue that one cannot install OS X on certain hardware. But OS X as sold at retail does not meet that definition. It can be installed with or without a previous version of OS X. What's included is completely relevant. Some software does meet that definition. If you don't own the previous version, you can't purchase the upgrade. OS X is not at all like that.

Please point out the official definition which supports you statement. something from Websters or a similar site? Please enlighten us as to the difference between 'just an upgrade' and an 'upgrade to functionality and features'. Do you realize how ridiculous that sounds?

So Websters, the Courts, and Apple are all wrong and all this time they should have been following your legal advice, just like Psystar? Worked out great for Psystar by the way. Just because you dislike something, doesn't make it illegal, or mean that the dictionary will change it's definition to please you.

Quote:
Originally Posted by SDW2001 View Post

However, I disagree that Apple should be able to legally prevent you from modifying your machine to run the OS that you purchased. You don't have to agree with me. It's just my opinion.

Also, please enlighten us. Exactly how is Apple limiting your ability to install another OS's on a Mac? I'll help you out. They aren't. If your implying that Apple is limiting what you do with a non-Apple piece of hardware, they aren't there either. Modify to your hearts content. Don't confuse people modifying their PC hardware with violating the Apple license.

You seem to think that you have purchased OS X. You haven't. You purchased a license. Apple sets the terms of the license, not you. If you can't understand the basic premise of a license then nothing said here will enlighten you. It does not grant you all permissions of ownership. It grants you whatever rights the owner deigns to grant you. You don't dictate the terms of the license you purchased, the owner of those licenses does. In this case, they said you cannot just install it wherever you please. Don't like it? Then don't buy a license.

Do you understand the difference between buying something outright, and purchasing a license to use it?
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post #94 of 116
Quote:
Originally Posted by DJRumpy View Post

Don't like it? Then don't buy a license.

I think it all boils down to this. Why buy a copy of OSX in the belief that you can do something with it that you know the license expressly forbids? It escapes me how anyone could feel as though their rights were being trodden on somehow, when they have the perfect right to simply decline to spend the money.
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post #95 of 116
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Originally Posted by Rot'nApple View Post

That may be true. I'm not a lawyer. I just found this definition from this site and it looked good...

the site: http://definitions.uslegal.com/p/precedent/

the definition: Precedent means deferring to a prior reported opinion of an appeals court which forms the basis in the future on the same legal question decided in the prior judgment. The requirement that a lower court must follow a precedent is called stare decisis.

Precedent means that the principle announced by a higher court must be followed in later cases....

The term "precedent" doesn't apply in this type of legal action. This is an injunction against a particular company in a particular instance, preventing it from doing a particular thing. There is nothing to stop another company from stepping up and doing the exact same thing (although it would be stupid) or from psystar from coming up with a new way to do business without violating the court order.

Precedent applies in situations where the court is interpreting a law, and is only precedent in the circuit in which the case was heard. Besides, the doctrine of "separate but equal" was once considered precedent. The ability to change precedent at will is one reason everyone gets all uptight about appointing appellate judges.

That much I know; what I don't get is why Apple users consider clones a bad thing. I'm not trying to provoke anyone, I just don't get that point of view.
post #96 of 116
Quote:
Originally Posted by Marklemagne View Post

That much I know; what I don't get is why Apple users consider clones a bad thing. I'm not trying to provoke anyone, I just don't get that point of view.

Because it would destroy Apple and everything we appreciate about their product. Good enough reason?

BTW, thanks for the explanation of precedent. I've been saying much the same thing myself, but have limited knowledge in this area.
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post #97 of 116
Quote:
Originally Posted by Marklemagne View Post

That much I know; what I don't get is why Apple users consider clones a bad thing. I'm not trying to provoke anyone, I just don't get that point of view.

Welcome to the forum. I dont many, if any, are opposed to clones. Id say most of us are opposed to illegal clones. It has nothing to do with the option be available but supporting Apples right as company in a free market to choose who and how to license their OS.

Outside of that, Psystar winning would have done nothing but hamper the ease of use that is currently associated with owning a machine running Mac OS X. There is no way that Psystar could have won by winning.
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post #98 of 116
I'm opposed to Mac clones on principle, if only because I doubt very much that a licensing scheme could be structured in a way that doesn't severely reduce Apple's profitability. A best, they would be creating competitors for their own products and competing with themselves. That's a bizarre business strategy with little chance of succeeding. Apple tried it once, and look where it got them. Palm tried it, and look where it got them.
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post #99 of 116
Quote:
Originally Posted by Dr Millmoss View Post

Because it would destroy Apple and everything we appreciate about their product. Good enough reason?

BTW, thanks for the explanation of precedent. I've been saying much the same thing myself, but have limited knowledge in this area.


I certainly understand your view; I see it more like natural selection: competition invariably improves the species.

To me it's merely an academic exercise and an interesting conundrum that goes back to the question addressed above of what makes a mac a mac -- hardware, os, or the combination? To the unsophisticated user like me it's the os. That's why I like my mac. How it differs inside the box from a pc or a Commodore Pet is outside my area of expertise and not important to me. Others are free to disagree and shake their heads at my ignorance.

While most of us like the company the way it operates now, simply saying cloning will end Apple as we know it is not sufficient. The board of Apple has a fiduciary duty to stockholders to maximize profit. Odd as it seems, in the courtroom (and to some extent the marketplace) the needs of shareholders are more important than the wants of customers. The board must be able to demonstrate why its current business model is best for those shareholders or someone who isn't happy about his or her financial returns is gonna sue.

It's the Wall Street version of a nuisance slip-and-fall lawsuit and it happens every day.
post #100 of 116
Quote:
Originally Posted by Marklemagne View Post

I certainly understand your view; I see it more like natural selection: competition invariably improves the species.

To me it's merely an academic exercise and an interesting conundrum that goes back to the question addressed above of what makes a mac a mac -- hardware, os, or the combination? To the unsophisticated user like me it's the os. That's why I like my mac. How it differs inside the box from a pc or a Commodore Pet is outside my area of expertise and not important to me. Others are free to disagree and shake their heads at my ignorance.

While most of us like the company the way it operates now, simply saying cloning will end Apple as we know it is not sufficient. The board of Apple has a fiduciary duty to stockholders to maximize profit. Odd as it seems, in the courtroom (and to some extent the marketplace) the needs of shareholders are more important than the wants of customers. The board must be able to demonstrate why its current business model is best for those shareholders or someone who isn't happy about his or her financial returns is gonna sue.

It's the Wall Street version of a nuisance slip-and-fall lawsuit and it happens every day.

You misunderstand. Apple current business model is primarily a hardware one. The bulk of their revenue comes from this. Opening the market to clones would essentially chop of their primary revenue market. Yes, they could gain some money from licenses, but not the premiums they get now. It makes no sense for them to do so. Apple is thriving in a recession. They don't need to 'fix' anything at the moment.
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post #101 of 116
Quote:
Originally Posted by DJRumpy View Post

You misunderstand. Apple current business model is primarily a hardware one. The bulk of their revenue comes from this. Opening the market to clones would essentially chop of their primary revenue market. Yes, they could gain some money from licenses, but not the premiums they get now. It makes no sense for them to do so. Apple is thriving in a recession. They don't need to 'fix' anything at the moment.

This.

Apple has already gone down the "clone" path before and it damn near killed them. Apple doesn't have the market share to start dividing it up on the hardware side. It'd be completely different if apple had 50% of the market. They have less than 10%. If apple were to stop the hardware + software combo package, I believe they'd lose more than they'd gain. That is one of the biggest features that makes this work.

 

 

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post #102 of 116
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Originally Posted by emig647 View Post

This.

Apple has already gone down the "clone" path before and it damn near killed them. Apple doesn't have the market share to start dividing it up on the hardware side. It'd be completely different if apple had 50% of the market. They have less than 10%. If apple were to stop the hardware + software combo package, I believe they'd lose more than they'd gain. That is one of the biggest features that makes this work.

According to the Wiki, it didn't nearly kill them. It brought in a decent profit at the time, and actually helped to keep them afloat. According to Jobs, the timing was just not right. Had they opened it up sooner in the market, they might have ended up where MS was, but it was simply too late in the game for clone licensing to be as profitable as selling the hardware was.

Source

"By 1995, Apple Macintosh computers accounted for about 7% of the worldwide desktop computer market. Apple executives decided to launch an official clone program in order to expand Macintosh market penetration. Apple's clone program entailed the licensing of the Macintosh ROMs and system software to other manufacturers, each of which agreed to pay a flat fee for a license, and a royalty for each clone computer they sold. This generated quick revenues for Apple during a time of financial crisis. From early 1995 through mid-1997, it was possible to buy PowerPC-based clone computers running Mac OS, most notably from Power Computing. Other licensees were Motorola, Radius, APS Technologies, DayStar Digital, UMAX, MaxxBoxx, and Tatung. In terms of exterior styling, Mac clones often more closely resembled generic PCs than their Macintosh counterparts.[8][citation needed]
[edit] Jobs ends the official program

Soon after Steve Jobs returned to Apple, he backed out of recently renegotiated licensing deals with OS licensees that Apple executives complained were still financially unfavorable [9]. Because the clone makers' licenses were valid only for Apple's System 7 operating system, Apple's release of Mac OS 8 left the clone manufacturers without the ability to ship a current Mac OS version and effectively ended the cloning program.[10] Apple bought Power Computing's Mac clone business for $100 million, ending the Clone era.[11]

Jobs publicly stated[citation needed] that the program was ill-conceived and had been a result of "institutional guilt," meaning that for years, there had been a widely held belief at Apple that had the company aggressively pursued a legal cloning program early in the history of the Macintosh, consumers might have turned to low-priced Macintosh clones rather than low-priced IBM/PC-compatible computers. Had it pursued a clone program in the 1980s, in this view, Apple might have ended up in the position currently occupied by Microsoft-an extremely powerful company with high profit margins and a wide base of consumers perpetually dependent on its system software products. Jobs claimed it was now too late for this to happen, that the Mac clone program was doomed to failure from the start, and since Apple made money primarily by selling computer hardware, it ought not engage in a licensing program that would reduce its hardware sales.
"
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post #103 of 116
Quote:
Originally Posted by DJRumpy View Post

According to the Wiki, it didn't nearly kill them. It brought in a decent profit at the time, and actually helped to keep them afloat. According to Jobs, the timing was just not right. Had they opened it up sooner in the market, they might have ended up where MS was, but it was simply too late in the game for clone licensing to be as profitable as selling the hardware was.

I never said "cloning in all history would have killed them.". I certainly believe that cloning before M$ was in full swing power (much by 1995), they would have stood a much better chance of being profitable and probably would have a bigger footprint today.

However, onto when they did clone. It was only profitable during the first few months. After that UMAX, PowerComputing and Motorola were outselling them in a big way. I had a Umax S900, my friend had a PowerTower Pro, and Apple's machines just couldn't keep up with price : performance with those machines.

Either way, the main point here is that what makes apple great is firm control on the hardware. If many different machines started coming into play, support and stability would be a nightmare. Many different drivers would have to be updated for each update and random conflicts would appear. It hasn't been a cakewalk for the OSX86 community as some may believe.

 

 

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post #104 of 116
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Originally Posted by DJRumpy View Post

You misunderstand. Apple current business model is primarily a hardware one. The bulk of their revenue comes from this. Opening the market to clones would essentially chop of their primary revenue market. Yes, they could gain some money from licenses, but not the premiums they get now. It makes no sense for them to do so. Apple is thriving in a recession. They don't need to 'fix' anything at the moment.

I argue this somewhat differently. While it's true after a fashion that Apple makes most of its money by selling hardware, Apple is not really a hardware company. If they wanted to be a hardware manufacturer, they could have followed in the footsteps of Dell, and the other Windows OEMs. Apple is a computer company. What they sell is the combination of hardware and software. Except for the brief, disastrous detour into cloning during the '90s, Apple has always been a computer maker, not a hardware maker, and not a software seller.

The only reason anyone thinks that Apple ought to operate their business in any other way is because of IBM's massive mistakes during the 1980s, and how those mistakes, compounded by some quirks of history, turned Microsoft into a powerhouse. The truth is, Apple can't recreate that sequence of events. They tried once, and it nearly killed the company -- and not just "as we know it," but completely.
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post #105 of 116
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Originally Posted by Dr Millmoss View Post

I argue this somewhat differently. While it's true after a fashion that Apple makes most of its money by selling hardware, Apple is not really a hardware company. If they wanted to be a hardware manufacturer, they could have followed in the footsteps of Dell, and the other Windows OEMs. Apple is a computer company. What they sell is the combination of hardware and software. Except for the brief, disastrous detour into cloning during the '90s, Apple has always been a computer maker, not a hardware maker, and not a software seller.

The only reason anyone thinks that Apple ought to operate their business in any other way is because of IBM's massive mistakes during the 1980s, and how those mistakes, compounded by some quirks of history, turned Microsoft into a powerhouse. The truth is, Apple can't recreate that sequence of events. They tried once, and it nearly killed the company -- and not just "as we know it," but completely.

A good point. I would go even further to say they are no longer a Computer company either (even having gone so far as to remove the 'computer' from the company name.
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post #106 of 116
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Originally Posted by DJRumpy View Post

According to the Wiki, it didn't nearly kill them. It brought in a decent profit at the time, and actually helped to keep them afloat. According to Jobs, the timing was just not right. Had they opened it up sooner in the market, they might have ended up where MS was, but it was simply too late in the game for clone licensing to be as profitable as selling the hardware was.

Please note that this article never says that the clones brought in any profit for Apple, let alone, a decent one. Apple's market share before cloning was actually higher -- over 10%. The cloners were supposed to open up new markets for Apple, but none of them advertised outside of Mac publications, and instead they just stole market share from Apple. While this was bad enough, when Apple's market share numbers were publicized, they typically did not include the clones, so the situation for the Mac looked even worse than it was. The clones were very much a factor in Apple's downward spiral during the '90s, both financially and in terms of their mindshare.

The timing for creating competitors for your own products is never right. It's an inherently bizarre strategy that has no place in a business plan.
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post #107 of 116
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Originally Posted by Dr Millmoss View Post

Please note that this article never says that the clones brought in any profit for Apple, let alone, a decent one. Apple's market share before cloning was actually higher -- over 10%. The cloners were supposed to open up new markets for Apple, but none of them advertised outside of Mac publications, and instead they just stole market share from Apple. While this was bad enough, when Apple's market share numbers were publicized, they typically did not include the clones, so the situation for the Mac looked even worse than it was. The clones were very much a factor in Apple's downward spiral during the '90s, both financially and in terms of their mindshare.

The timing for creating competitors for your own products is never right. It's an inherently bizarre strategy that has no place in a business plan.

Actually it does: "This generated quick revenues for Apple during a time of financial crisis. "
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post #108 of 116
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Originally Posted by DJRumpy View Post

Actually it does: "This generated quick revenues for Apple during a time of financial crisis. "

Revenues are not profits.
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post #109 of 116
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Originally Posted by Dr Millmoss View Post

Revenues are not profits.

Revenue is Revenue. From what I'm reading, Jobs was hesitant to allow cloning because he was afraid the same thing that happened to IBM would be repeated at Apple. A valid reason to disallow it in my mind. It appears Jobs nipped it in the bud before they found out one way or another as to what impact it would have on Apple.

Don't get me wrong. I think he made the right choice. Although it may have given Apple a larger share of the market, the machines being pushed out wouldn't have been an Apple, which defeats the purpose. I'd rather they make it on their own strengths.
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post #110 of 116
Quote:
Originally Posted by Dr Millmoss View Post

I argue this somewhat differently. While it's true after a fashion that Apple makes most of its money by selling hardware, Apple is not really a hardware company. If they wanted to be a hardware manufacturer, they could have followed in the footsteps of Dell, and the other Windows OEMs. Apple is a computer company. What they sell is the combination of hardware and software. Except for the brief, disastrous detour into cloning during the '90s, Apple has always been a computer maker, not a hardware maker, and not a software seller.

The only reason anyone thinks that Apple ought to operate their business in any other way is because of IBM's massive mistakes during the 1980s, and how those mistakes, compounded by some quirks of history, turned Microsoft into a powerhouse. The truth is, Apple can't recreate that sequence of events. They tried once, and it nearly killed the company -- and not just "as we know it," but completely.

Technically Id classify any one who designs their own HW as HW company, their own SW as a SW company and anyone who does both as both. MS is a HW company with their MS Table, Zune and Xbox, but we see MS focus is on SW sales for the PC. Dell is a SW company with the crappy apps they install on their PC builds, but its obvious that is just a paltry attempt to make their PC HW sales.

That said, no one has the synergy Apple has with HW and SW. i would classify Apple as a HW company first and foremost if I had to choose just one since that is where their major profits come form and because there is no software or service that is sold that is not designed around selling more of their HW and making you happier to use their HW.

They are certainly a HW, SW and services company that is very skilled in two out of three and improving on the third. I think Alan Kay said it best, people who are really serious about software should make their own hardware, but in Apples case that quote should be reversed.
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post #111 of 116
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Originally Posted by DJRumpy View Post

Revenue is Revenue.

He has a point. You can be selling in droves with record revenue but if your expenses are more than the revenue you are taking in then you are still losing money.

Quote:
Don't get me wrong. I think he made the right choice. Although it may have given Apple a larger share of the market, the machines being pushed out wouldn't have been an Apple, which defeats the purpose. I'd rather they make it on their own strengths.

Absolutely the right choice. I never understood the concept of the clones. It seems short-sided, at best. The only way that would work is to stop making the PC HW altogether and open up licensing to everyone to compete directly with MS. Theyd increase marketshare by 10x nearly overnight but I am not certain their PC division would be any more profitable.

Pulling everything back in, restructuring and rebuilding from the inside out is always a smart move. Its work for many a country and government.
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post #112 of 116
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Originally Posted by solipsism View Post

He has a point. You can be selling in droves with record revenue but if your expenses are more than the revenue you are taking in then you are still losing money.

The point, was that it was generating revenue in place of no revenue at all. We can't go back in history and look at what would have happened if they did X instead of Y. We can only guess. At the time, Apple was in dire straights. Was it due to cloning? That was simply a guess. What we do know is that their business model was failing before the cloning program was initiated. It did bring in revenue at a time when it was sorely needed. Perhaps not as much as they had hoped. Revenue was not the reason that Jobs gave for killing it however. I happen to agree with his IBM reasoning if that is indeeded the real reason they killed it. Hindsight is always 20/20, and we saw what happened to Big Blue during the Clone Wars (no pun intended...ok, maybe a little pun...).
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post #113 of 116
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Originally Posted by DJRumpy View Post

The point, was that it was generating revenue in place of no revenue at all. We can't go back in history and look at what would have happened if they did X instead of Y. We can only guess. At the time, Apple was in dire straights. Was it due to cloning? That was simply a guess. What we do know is that their business model was failing before the cloning program was initiated. It did bring in revenue at a time when it was sorely needed. Perhaps not as much as they had hoped. Revenue was not the reason that Jobs gave for killing it however. I happen to agree with his IBM reasoning if that is indeeded the real reason they killed it. Hindsight is always 20/20, and we saw what happened to Big Blue during the Clone Wars (no pun intended...ok, maybe a little pun...).

But that's not true. Clone licensing may have been generating revenue, but at the expense of profits. Apple's market share was literally cut in half by the clone experiment. The revenue generated by licensing could not offset the profits Apple lost by giving up that much market share to competitors, competitors which they had created by their own hand. It was a dumb idea from word go.

The reason why it was killed had nothing to do with IBM, which was far from an analogous situation if only because IBM never licensed clones. As I recall, Jobs called the Mac cloners "bloodsuckers" which is precisely what they were, since none of them made any effort to expand the Mac market beyond its existing base, but instead poached Apple's market. This was so obvious at the time. It was also obvious what a huge mistake it was to license, because Apple had no way of controlling the cloner's marketing. It all devolved into a huge battle over licensing fees, which led to the collapse of the entire program, which was frankly inevitable from the start, since it was such a bad idea. Sadly it also took down the CHRP project, which might have been a really good thing for the PPC had it survived.
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post #114 of 116
Quote:
Originally Posted by Dr Millmoss View Post

But that's not true. Clone licensing may have been generating revenue, but at the expense of profits. Apple's market share was literally cut in half by the clone experiment. The revenue generated by licensing could not offset the profits Apple lost by giving up that much market share to competitors, competitors which they had created by their own hand. It was a dumb idea from word go.

The reason why it was killed had nothing to do with IBM, which was far from an analogous situation if only because IBM never licensed clones. As I recall, Jobs called the Mac cloners "bloodsuckers" which is precisely what they were, since none of them made any effort to expand the Mac market beyond its existing base, but instead poached Apple's market. This was so obvious at the time. It was also obvious what a huge mistake it was to license, because Apple had no way of controlling the cloner's marketing. It all devolved into a huge battle over licensing fees, which led to the collapse of the entire program, which was frankly inevitable from the start, since it was such a bad idea. Sadly it also took down the CHRP project, which might have been a really good thing for the PPC had it survived.

[Citation Needed]

Seriously, though, I'd like to read up on it. Surely some of that history still exists on the web somewhere...
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post #115 of 116
I can attest to the clones only advertising to the current users. Each one of my cataloges at the time (Mac Warehouse, MacMall, MacZone, etc) all put the clones on the first few pages. The only place I'd see the clones was where there was a mac magazine. The whole purpose of the project was to expand the market share, but they just attacked apple's market share. It was obvious they were attacking it, their computers would be two to three hundred dollars cheaper than apple's for very similar performance. It was a very interesting time for sure.

 

 

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post #116 of 116
Some of us remember this period all too well. You'd open up your MacWorld or MacUser magazine and see it filled with ads from PowerComputing, UMAX and Motorola -- but you'd never see them anywhere else. The cloners were simply not making any effort to sell these Macs to anyone but existing Mac owners. So what was the use, as far as Apple was concerned? I think most Mac users quickly got over their initial excitement about having the choice when we could see what it was doing to Apple.

EDIT: Links to some stories from that time:

http://news.cnet.com/Motorola-haltin..._3-203146.html

http://news.cnet.com/Power-called-mo..._3-202902.html
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