Attack of the Clones! Options

Yes, but Apple already had "inconvenience" with 10.4.1 and 10.4.3. They took it a step further in 10.4.4 by encrpyting binaries and I think most clued-in people expect them to do more to secure Leopard (10.5).

Of course. My expectation is that virtualization in Leopard, and the OS itself, will be much more dependant on EFI, and Apple specific EFI modules, than 10.4. So I’m guessing that's where the extra annoyance in building hackintoshes will come in.

For every extra annoyance Apple adds, it further reduces the value of any illegal clone. There is no doubt they will continue to lock things down, my apologies for implying otherwise. However, I don’t think Apple is diluted into thinking any measure they take will stop the inevitable from happening.

Actually, people who work in the IT sector here in Asia know how much it really cost to put together something like this. The people selling 500 dollar PC will not settle for anything below a 50% markup on the entire unit including the OS .

If you have never been to the IT hub of Asia, you really will be amazed at the "grey market" vendors and how much they get actually get the hardware for. I baught a 2.8ghz processor for 150USD 3 yrs ago and still going strong at 3.2ghz. I imagine the fastest P4 today can be baught for just under 150USD and the person buying by the 100's will get a very good discount. Sometimes it makes you wonder if you really paid the right price on your hardware, dudn't it?

Now think about the normal 9-5 people buying this system for 500 bones but actually cost 250.. It's a pretty good profit if you ask me.

My expectation is that virtualization in Leopard, and the OS itself, will be much more dependant on EFI, and Apple specific EFI modules, than 10.4.

Yes, my thoughts exactly which is one reason why I am trying to encourage this community to switch to EFI:

http://forum.osx86project.org/index.php?showtopic=13493

http://forum.osx86project.org/index.php?showtopic=17067

"PowerPC G6 Macintosh", "Apple G6 Macintosh-Clone Computer", seriously, it sounds gay as f***.

Yeah, I thinking about calling these guys up and asking them if they could thrown in a can of Cheese Whiz to make it more appetizing.

Well, if Apple is smart they will legitimize the clones by using the courts to stop those who infringe by OS copying and they then sell a legal OS for the clones, for something like Win XP sells for, complete with their dual booter, They can make a standard items out of it....stores would love it. It would remove the stores from the risk of selling OS copies. Businesses would love it...most businesses will not use clone software and the high price of Apple hardware has kept their numbers down for years.

After all, look at how rich Microsoft got selling an OS(plus some other stuff).
Apple could also sell a boot bios....another high profit item.

That way Apple would get a piece of the action on many clones sold as long as they kept their lawyers busy writing letters to enforce their rights.

This would have the dual function of:
1 Increasing the critical mass of Apple compatible hgardware out there...very important
2 Bringing Apple a reasonable profit on every clone sold

I realize the technical nature of this forum, which is excellent, but I feel a lot of the business is not being addressed here. Over half, as in MOST PC's are actually "White Box" generic, not Dell, HP, add top 10 & you get under 1/2 shipping PC's... and even MS is aware that while they charge per OS on even cheap boxen, most say India, China, are not paying anything... and they can't afford to anyway!

MS & Intel make all the $ on a $499 PC. ( obviously they are huge companies ) Over 1/2 the cost... Dell is having big problems in offering dirt cheap boxes, and hoping to upsell, which has not translated well of late... Portable computers represent like 40% of PC's sold. You cannot make one at Fry's, can you? Dell has a $599 Laptop which loses $ on every sale... they say it's marketshare move, so losing $ this Quarter also, in a long term strategy ( loyal 2 dell?) Market doesn't see it either...

So now, while I know desktops sell more units than portables, these high end desktops, laptops are over 80% of profits... the low end is a distribution channel for MS/Intel - no one else makes a penny... So, Apple isn't concerned about $500 PC's - Mac Mini has dual processor and less ugly... but largely wants to avoid losing money in a race to bankruptcy...

That said, looking at where companies earn money, Dell bought Alienware so they can sell desktops for $5,000, not a lot of units, but the only profitable part of this market... Gateway went under.... selling in the low end... IBM sold off it's PC business which never earned a profit in a decade... it sold PC's to offer the rest of a computer contract, and made over 50% income on "services". Now Lenovo is not IBM... it's suicide... untenable....like getting seniority as a suicide bomber.... it's a very small field....LOL

So, Apple has said (over & over) they have chosen to compete in the profitable part of the biz. No sub $500, why lose $ on every unit? Yet the high end, may be only a small part of the millions of PC's sold, but ALL the profit... This was over 500 million profit last Q, iPod also stays away from super cheap bottom feeders... let them fight over pennies... if they want features, there is competition there....

If you look at the desktop PC market as the barren wasteland of financial ruin, it has been for a while.... and laptops are larger & larger % of computers.... there seems almost zero risk in licensing dirt cheap PC's that are not profitable ( unless subsidized distribution by foreign govt's Japan, Korea, Taiwan, China)

So, why not sell OS X @ $129? Low end cant afford this in $299 PC's, but Apple pays all R&D from just retail OS sales - pays for itself @ 2million easily.... it's likely not a threat to Apple in places people can afford to, buy Apple, and in places they cannot, make something.....

For Lock-in strategy, DRM isn't really a good idea.... see iTunes, iPod, ITMS as a perfect strategy - you have no choice to easily replace that on no name MP3 players... and people choose iPods. Simply offering what no one else will....

Just FYI

So, why not sell OS X @ $129?

Again, I think it is quite obvious that Apple will inevitably license OS X.

Here are the questions that I think are most relevant:

(1) Will Steve Jobs permit the licensing OS X?

(2) How is Microsoft likely to respond to OS X licensing?

(3) Can licensed OS X achive a significant market share, like 30%, of over the long term?.

Again, I think it is quite obvious that Apple will inevitably license OS X.

It goes further than licensing just the OS. EFI will slowly transfer parts of what was in the OS back to firmware. To run OSX you'll need Apple firmware. To get Apple firmware, you'll need to run an Apple approved platform - and to get an Apple approved platform, you'll likely have to license an Apple hardware design -- all leading up to an IMac with a Dell(1) sticker on it (or for the white box crowd, an Asus(2) mobo claiming "Made for Apple") and more income for Apple.

.1 - Insert PC vendor of choice here.
.2 - Insert motherboard manufacture of choice here.

That said, I have serious doubts about Apple ever entering OSX into the white box market. Even allowing other OEMs to produce Macs could seriously effect the perceived value of a Mac.

I still find it improbable that Apple will ever license OS X out to any white box manufacturer. It's not going to happen. The fact remains that marketshare would not increase by a large enough margin.

The cloners will either be stamped out by Apple legal or by Apple locking the OS tighter and tighter.

It goes further than licensing just the OS. EFI will slowly transfer parts of what was in the OS back to firmware. To run OSX you'll need Apple firmware. To get Apple firmware, you'll need to run an Apple approved platform...

This is what I mean by _licensing_ OS X, as opposed to just selling it for any PC. I am not not talking about "white boxes" but rather licensing the likes of Sony, HP and Dell to use Apple's firmware to Mac-clones with OS X.

- and to get an Apple approved platform, you'll likely have to license an Apple hardware design -- all leading up to an IMac with a Dell(1) sticker on it (or for the white box crowd, an Asus(2) mobo claiming ...

I think you are missing the significant of the fact that Apple has gotten out of the motherboard and chipset design business and now relies on Intel to do that work.

I still find it improbable that Apple will ever license OS X out to any white box manufacturer. It's not going to happen. The fact remains that marketshare would not increase by a large enough margin.

It might not happen while Steve Jobs is running Apple, but it is bound to happen. To understand this all you have to do is realize that the money is in it. Specifically, Microsoft has proven (if nothing else) which business model is better. That is of course licensing (or selling) the OS, while letting Dell-like companies try to wring profit out the intensively competitive hardware business.

Moreover, it is likely that switching to Intel is part of a larger Apple strategy to license OS X.

I am sure lots of people still do not get this, so here are a few more hints:

(1) Silicon Graphics declared bankruptcy this week: http://www.mercurynews.com/mld/mercurynews/news/14535154.htm Compare its business model with Apple's.

(2) When NeXT began failing it selling hardware and switch to being a software only business to survive.

It might not happen while Steve Jobs is running Apple, but it is bound to happen. To understand this all you have to do is realize that the money is in it. Specifically, Microsoft has proven (if nothing else) which business model is better. That is of course licensing (or selling) the OS, while letting Dell-like companies try to wring profit out the intensively competitive hardware business.

Moreover, it is likely that switching to Intel is part of a larger Apple strategy to license OS X.

I am sure lots of people still do not get this, so here are a few more hints:

(1) Silicon Graphics declared bankruptcy this week: http://www.mercurynews.com/mld/mercurynews/news/14535154.htm Compare its business model with Apple's.

(2) When NeXT began failing it selling hardware and switch to being a software only business to survive.

Do you realize the irony of using NeXT to support your argument? NeXT Step's attempt and failure to remain profitable as a software only business is precisely why Jobs will never do it.

You guys can wish it all you want but it is not going to happen.

If the macbooks are anything to go by, the Intel powered towers Apple releases will be price competitive with other "similarly configured" PCs even before factoring in the software and that it comes with a pro level OS.

If all this materializes, your arguments in favour of licensing will all but disappear especially if they come out with faster chips on the mac towers before everyone else and perform better under windows (from motherboard tweaks) than similarly configured PCs.

Apple can and should simply sell the OS at the OEM level to people who make Green Apple boxes(as against Intel white boxes). It is my understanding the OEMs pay around $85 for Win Xp, but it varies with volume, Dell pays less. Apple can sell at that price to OEMS and make lots

No need to licence them, just sell the OS and make a buck and seed the low end with apple users.
They will need to make a marriage of machine specs to OS price. So if people want to make $3000 Apple clones, they will pay more for the OS.

Apple sorely needs to get it's box share up. Currently it is about 1.3% as you count boxes and about 2.6% as you count dollars due to the higher price of Apples. Yes Apple inflates it's figures.

Then let low end buyers work up to better Apples or not. Apple will have it's OS sale $$ in it's hip pocket and margins on the OS are 95%....a lot more than hardware.

Will Jobs do it? Hard to say. Jobs is not very bright. The recent ipod success was preceded by many years of horrible marketing failure that took Apple from 100% share all the way to the present sorry state. Most of these monopolistic Apple practices that ruined Apple were done by Jobs, although Scully and others marketing genii kept t it after they booted Jobs.

So Jobs is a 1 trick cowboy, computers are still not that bright a star. Ipod hails the freight

Apple can and should simply sell the OS at the OEM level to people who make Green Apple boxes(as against Intel white boxes). It is my understanding the OEMs pay around $85 for Win Xp, but it varies with volume, Dell pays less. Apple can sell at that price to OEMS and make lots

No need to licence them, just sell the OS and make a buck and seed the low end with apple users.
They will need to make a marriage of machine specs to OS price. So if people want to make $3000 Apple clones, they will pay more for the OS.

Apple sorely needs to get it's box share up. Currently it is about 1.3% as you count boxes and about 2.6% as you count dollars due to the higher price of Apples. Yes Apple inflates it's figures.

Then let low end buyers work up to better Apples or not. Apple will have it's OS sale $$ in it's hip pocket and margins on the OS are 95%....a lot more than hardware.

Will Jobs do it? Hard to say. Jobs is not very bright. The recent ipod success was preceded by many years of horrible marketing failure that took Apple from 100% share all the way to the present sorry state. Most of these monopolistic Apple practices that ruined Apple were done by Jobs, although Scully and others marketing genii kept t it after they booted Jobs.

So Jobs is a 1 trick cowboy, computers are still not that bright a star. Ipod hails the freight

I work as a developer and I can tell you that there is no way a company the size of Apple could survive on 85 dollars per copy. They would not be able to sell enough copies to pay for development costs and support costs.

Your figures do not add up. I'm sorry but you do not have any idea about the costs involved in development of software let alone an OS.

They should sell osx and here is why. They might lose some dough in lost mac sales but lets look at who makes software for osx. Apple makes all the video editing apps, they make ilife,iwork, and a host of other programs. They also would increase the number of machines running itunes and that will improve ipod sales. Apple also updates their os ever couple of years the updates are minor but they sell the new os for 150 bucks. Thats a lot of cake.

I think you are missing the significant of the fact that Apple has gotten out of the motherboard and chipset design business and now relies on Intel to do that work.

Just because apple contracts out the design and construction, doesn’t mean it's not their own.

Even the PPC Macs didn't use Apple components.

They should sell osx and here is why. They might lose some dough in lost mac sales but lets look at who makes software for osx. Apple makes all the video editing apps, they make ilife,iwork, and a host of other programs.

But most of the people interested in those applications would likley just buy a Mac.

They also would increase the number of machines running itunes and that will improve ipod sales.

See: iTunes for Windows.

Apple also updates their os ever couple of years the updates are minor but they sell the new os for 150 bucks. Thats a lot of cake.

The great majority of people who buy a PC never upgrade the OS. They used what came on the machine.

Apple stands to sacrifice its unheard of margins in PC sales if they license their OS. If other OEMs can sell OSX, it greatly reduces the perceived value of a Mac.

If Apple is able to grab a majority of the PC market then you might see it forced to license its OS, but until then, I doubt it will happen.

Let's look at History. Macs have been slowly becoming PCs and now Macs are PCs.

Apple used to use it's proprietary Video connector, then switched to VGA.

For awhile it was DVI, then switched to ADC and then back to DVI-D.

For a long time Macs used SCSI and PCs used ATA or IDE.

Since the 604e and G3's, Mac use ATA and ATAPI for HDs/DVDs.

And for the longest time, it was either a 680xx or a PowerPC chip and now we know what they use now.

The next step is obviously licensing the OS after it's hardware sales start to dry up, but I could not count on that until the OS that comes after Leopard.

Now is not the time because of SSE2/SSE3. Which Pentium III's do not have. As these old PCs are replaced with newer onces with both SSE3 and EFI, then Apple can consider licensing.

I would be willing to bet that PC Manufacturers will start "cloning" Apple's specs and release Tower's that are have simliar guts of an EFI Intel Mac.

However, Leopard may not even run on an ordinary PC. If no one is able to crack it, you could expect Apple to release the version or two after Leopard. Who know what Cat that will be. If Apple can make those virtually uncrackable then Apple will hold the key and decide whether the time is right for WORLD DOMINATION.

GT

The next step is obviously licensing the OS after it's hardware sales start to dry up

The problem is, Apple did try allowing cloning in the past and it caused their hardware sales to dry up.

The amount Apple would need to charge for a license of the OS and firmware to make up for the loss in hardware sales wouldn't allow any cloners to be competitive, so no cloners would pick it up.

The problem is, Apple did try allowing cloning in the past and it caused their hardware sales to dry up.

The amount Apple would need to charge for a license of the OS and firmware to make up for the loss in hardware sales wouldn't allow any cloners to be competitive, so no cloners would pick it up.

They wouldn't have to charge for use of their firmware, since they're now using EFI. It's not something propietary like OpenFirmware, and can most likely be easily tailored for use on Dell's and the like, If Apple so chose to. What they would be licensing, would be the OS software itself, most likely in the form of custome tailored OEM discs, much like current copies of windows.

Just my 0.02

They wouldn't have to charge for use of their firmware, since they're now using EFI. It's not something propietary like OpenFirmware

Apple does have custom EFI modules (and are expected to add more) that they would likely charge a licence fee for -- if they ever did licence the OS.