What if Apple Lost the case to Psystar
Here are my speculations:
1)Now the Mac Clone is legal (actually I have a big question mark here. Maybe even Apple lost the case, it still has the leverage to put a hold to the situation before it spins out of control, similar to what Steve Jobs did in 1997 - killing the clone program by changing the software version number), and OEMs such as DELL and HP will start produce Mac computers with similar or better performance compared to those from Apple, but only a fraction of the price. AAPL sees the revenue from selling Apple branded computers nose dive.
2) Computer operating system development may be the business with the highest entry threshold in human history - the profit only starts flowing in after burning billions of dollars. Now Apple, with an OS that already cost it billions, sees the high margin from bundling it with the hardware vanish, the only option left is to sell more OS licenses, i.e., increase the market share, i.e., a face-off with Microsoft.
3) Nothing depicts the picture of the competition between MSFT and AAPL better than the TV commercials from Apple. Two friendly guys jump on the scene, greeting you with warm and breezy words, 'Hello I am a Mac', and 'Hello I am a PC'. You saw the PC guy got trashed every time but shrug it off and come back with a smile, a little dumb but sure with a big heart. It is wrong if you come to the conclusion that MSFT doesn't take AAPL seriously, the fact is that they play in two different market zones, with MSFT in a broad one and AAPL in a niche one. Now with AAPL forced out of its traditional zone and positioned to fight MSFT in its backyard, there is no reason to expect MSFT to be that big-hearted dude anymore. Remember how it crashed Netscape years ago? That is the exact MSFT that Apple has to fight.
4) AAPL is going to be squeezed from another side. In the sweet old times, their software engineers only need to make sure their code is compatible with a specified range of hardware, which, Apple has absolute control. Now the pressure to increase the market share will force Apple to consider compatibility issues with a range of hardware 10 times wider. Then adding the derivative support and maintenance issues, don't be surprised if you see the cost rocket.
5) You got used to see an Apple that is creative and elegant, but remember nothing comes without a cost. When AAPL has full control over its products and its market, it can afford the luxury to be creative and elegant. However, if it is constantly under the amounting pressure of the competition and the market, can it still sustain this elegance and innovation? I doubt it. More likely, the constant pressure will exhaust their energy and patience to be innovative, drive the change of the company culture, and eventually, lead to the disappearance of their competitive advantage.
I know there is only slim slim chance for all these to happen, but kind of scary.
1)Now the Mac Clone is legal (actually I have a big question mark here. Maybe even Apple lost the case, it still has the leverage to put a hold to the situation before it spins out of control, similar to what Steve Jobs did in 1997 - killing the clone program by changing the software version number), and OEMs such as DELL and HP will start produce Mac computers with similar or better performance compared to those from Apple, but only a fraction of the price. AAPL sees the revenue from selling Apple branded computers nose dive.
2) Computer operating system development may be the business with the highest entry threshold in human history - the profit only starts flowing in after burning billions of dollars. Now Apple, with an OS that already cost it billions, sees the high margin from bundling it with the hardware vanish, the only option left is to sell more OS licenses, i.e., increase the market share, i.e., a face-off with Microsoft.
3) Nothing depicts the picture of the competition between MSFT and AAPL better than the TV commercials from Apple. Two friendly guys jump on the scene, greeting you with warm and breezy words, 'Hello I am a Mac', and 'Hello I am a PC'. You saw the PC guy got trashed every time but shrug it off and come back with a smile, a little dumb but sure with a big heart. It is wrong if you come to the conclusion that MSFT doesn't take AAPL seriously, the fact is that they play in two different market zones, with MSFT in a broad one and AAPL in a niche one. Now with AAPL forced out of its traditional zone and positioned to fight MSFT in its backyard, there is no reason to expect MSFT to be that big-hearted dude anymore. Remember how it crashed Netscape years ago? That is the exact MSFT that Apple has to fight.
4) AAPL is going to be squeezed from another side. In the sweet old times, their software engineers only need to make sure their code is compatible with a specified range of hardware, which, Apple has absolute control. Now the pressure to increase the market share will force Apple to consider compatibility issues with a range of hardware 10 times wider. Then adding the derivative support and maintenance issues, don't be surprised if you see the cost rocket.
5) You got used to see an Apple that is creative and elegant, but remember nothing comes without a cost. When AAPL has full control over its products and its market, it can afford the luxury to be creative and elegant. However, if it is constantly under the amounting pressure of the competition and the market, can it still sustain this elegance and innovation? I doubt it. More likely, the constant pressure will exhaust their energy and patience to be innovative, drive the change of the company culture, and eventually, lead to the disappearance of their competitive advantage.
I know there is only slim slim chance for all these to happen, but kind of scary.
Comments
Here are my speculations:
1)Now the Mac Clone is legal (actually I have a big question mark here. Maybe even Apple lost the case, it still has the leverage to put a hold to the situation before it spins out of control, similar to what Steve Jobs did in 1997 - killing the clone program by changing the software version number), and OEMs such as DELL and HP will start produce Mac computers with similar or better performance compared to those from Apple, but only a fraction of the price. AAPL sees the revenue from selling Apple branded computers nose dive.
2) Computer operating system development may be the business with the highest entry threshold in human history - the profit only starts flowing in after burning billions of dollars. Now Apple, with an OS that already cost it billions, sees the high margin from bundling it with the hardware vanish, the only option left is to sell more OS licenses, i.e., increase the market share, i.e., a face-off with Microsoft.
3) Nothing depicts the picture of the competition between MSFT and AAPL better than the TV commercials from Apple. Two friendly guys jump on the scene, greeting you with warm and breezy words, 'Hello I am a Mac', and 'Hello I am a PC'. You saw the PC guy got trashed every time but shrug it off and come back with a smile, a little dumb but sure with a big heart. It is wrong if you come to the conclusion that MSFT doesn't take AAPL seriously, the fact is that they play in two different market zones, with MSFT in a broad one and AAPL in a niche one. Now with AAPL forced out of its traditional zone and positioned to fight MSFT in its backyard, there is no reason to expect MSFT to be that big-hearted dude anymore. Remember how it crashed Netscape years ago? That is the exact MSFT that Apple has to fight.
4) AAPL is going to be squeezed from another side. In the sweet old times, their software engineers only need to make sure their code is compatible with a specified range of hardware, which, Apple has absolute control. Now the pressure to increase the market share will force Apple to consider compatibility issues with a range of hardware 10 times wider. Then adding the derivative support and maintenance issues, don't be surprised if you see the cost rocket.
5) You got used to see an Apple that is creative and elegant, but remember nothing comes without a cost. When AAPL has full control over its products and its market, it can afford the luxury to be creative and elegant. However, if it is constantly under the amounting pressure of the competition and the market, can it still sustain this elegance and innovation? I doubt it. More likely, the constant pressure will exhaust their energy and patience to be innovative, drive the change of the company culture, and eventually, lead to the disappearance of their competitive advantage.
I know there is only slim slim chance for all these to happen, but kind of scary.
nothing scary. Just that you would be able to use and run OSX and Windows on the same machine and save a real chunk of change. Which you could then spend in your country boosting the economy and dragging us out of the recession. Its a win, win..
nothing scary. Just that you would be able to use and run OSX and Windows on the same machine and save a real chunk of change. Which you could then spend in your country boosting the economy and dragging us out of the recession. Its a win, win..
For me it would be win/lose.
I would be able to buy a cheap machine and run Mac OS on it... which means I would save money (win).
However... Apple's hardware sales would tank (esp. in these tough economic times) and thus Apple would spend less and less money developing the hardware that is, in my opinion, far nicer than that found on the PC market (lose). Apple would be in huge financial trouble and as a result who knows how much money they would spend or be able to spend developing their OS further.
So much of Windows is a poor man's Mac OS. If the Mac OS slowed down its developments and improvements, that would hurt everyone (Microsoft seems almost unable to come up with anything original on its own).
In all, it would be an epic lose for me as I would, with time, end up losing out on great hardware, great design, cool innovation etc.
I might be in the minority, but I would rather pay more and get a Mac running OS X, than pay less and buy a PC running the same software.
For me it would be win/lose.
I would be able to buy a cheap machine and run Mac OS on it... which means I would save money (win).
However... Apple's hardware sales would tank (esp. in these tough economic times) and thus Apple would spend less and less money developing the hardware that is, in my opinion, far nicer than that found on the PC market (lose). Apple would be in huge financial trouble and as a result who knows how much money they would spend or be able to spend developing their OS further.
So much of Windows is a poor man's Mac OS. If the Mac OS slowed down its developments and improvements, that would hurt everyone (Microsoft seems almost unable to come up with anything original on its own).
In all, it would be an epic lose for me as I would, with time, end up losing out on great hardware, great design, cool innovation etc.
I might be in the minority, but I would rather pay more and get a Mac running OS X, than pay less and buy a PC running the same software.
fair points but... you have to remember that Apple actually sells very few computers relative to the total worldwide market.... <5%.
last quarter they only sold 6500 desktop machines per day......worldwide!!!!
to make a business case....
Apple withdraws from computer hardware but remains in the phone and pod business.
they OEM the OS and sell full retail copies standalone at $199 to $249.
There is a tremendous appetite at the moment for a Vista alternative and they wouldn't need to sell too many extra copies to make up the profit difference from not selling the hardware.
Result?
OSX marketshare goes through the roof, MS gets squeezed.Increased brand awareness only helps ipods and iphone sales...Apple TV...DVR could follow and APple becomes THE future of digital media distribution in every area of life...not just portables.
it would be MS' worst nightmare!!!!
Apple needs better hardware the new mac pro should be at least $1000 less and x2 the ram. The imacs need easy to get to HD's in them.
If apple had better hardware then Clones will not be as bad but when you can get the SAME power as the new mac pro for over a $1000 less with X2 the ram and better video some times even with a free display then even if os x costed $200 - $300 it is still a better buy then a apple system.
Not haveing a Apple TV...DVR is the cable co falt for makeing cables cards the big mess that they are now.
fair points but... you have to remember that Apple actually sells very few computers relative to the total worldwide market.... <5%.
last quarter they only sold 6500 desktop machines per day......worldwide!!!!
to make a business case....
Apple withdraws from computer hardware but remains in the phone and pod business.
they OEM the OS and sell full retail copies standalone at $199 to $249.
There is a tremendous appetite at the moment for a Vista alternative and they wouldn't need to sell too many extra copies to make up the profit difference from not selling the hardware.
Result?
OSX marketshare goes through the roof, MS gets squeezed.Increased brand awareness only helps ipods and iphone sales...Apple TV...DVR could follow and APple becomes THE future of digital media distribution in every area of life...not just portables.
it would be MS' worst nightmare!!!!
What the management of Apple sees must be very different from what you see.
1) In the past N years, Apple always has this option to separate OS from the hardware but they didn't do it. Instead, they are now engaged in the battle against Psystar to protect their bundling strategy.
2) Even they don't allow Mac Clone, they still have the option to lower the price of their computer and compete with PC in the lower-end market, again Apple chose Not to.
I have the impression that Apple intentionally avoid a full-blown face-to-face competition with Microsoft. If I am to guess the reason, I'd like to say they don't want to, they don't have to and they are not ready. A simple example, see how much Microsoft spends to develop a 'secure' system, but for Apple OS, there is even no need for anti-virus software. Is Mac really securer? maybe, but if Apple is having the same monopoly position as Microsoft today, I doubt the security issue with Apple would be better. In other words, Apple has to deal with thousands more issues if they become a pure OS player, this doesn't only mean steep increase in cost, but a lot more, and I think they are way from being ready.
A wild guess. Apple would grab all the chances to stick to their bundling strategy for the next 5-10 years and gradually increase their market share. When that reaches 20%, maybe you will see it re-initiate the Mac Clone program and if they do that, the sole purpose would be to dethrone Microsoft.
Btw, if you are an Apple investor, you are very welcome to visit my site . I am in the process of writing a series of Apple stock analysis articles.
6) apple makes a real mid tower at $1000 - $1800. Laptops with 15 or bigger screen at $1000- $1800, $400 - $600 mini laptop, $800 - $1000 laptop, 13" screen laptop with good video, $1900 - $2500 for 17 screen, better video then 9600m in $2000+ systems.
Apple needs better hardware the new mac pro should be at least $1000 less and x2 the ram. The imacs need easy to get to HD's in them.
If apple had better hardware then Clones will not be as bad but when you can get the SAME power as the new mac pro for over a $1000 less with X2 the ram and better video some times even with a free display then even if os x costed $200 - $300 it is still a better buy then a apple system.
Not haveing a Apple TV...DVR is the cable co falt for makeing cables cards the big mess that they are now.
Right. IMO, - Apple markets a reasonably priced mid-tower - the clone problem goes away! Apple makes more money and stays out of court. Lawyers starve. Mac users bless SJ. God's in his heaven. All's right with the world.