Defiant Psystar back selling Leopard computers
Psystar is back online selling "white box" Macs with a few subtle changes, and one employee has already played the monopoly card.
As you might recall, Psystar's Web site was overwhelmed Monday after it was found to be selling cheap computers with Mac OS X Leopard preinstalled. This caused quite the commotion, as Apple does not license its operating system to other hardware makers, and specifically prohibits (PDF) end users from installing Mac OS X on anything other than an "Apple labeled" computer.
Psystar's OpenPro Computer, which is available with Mac OS X Leopard preinstalled.
(Credit: Psystar)Ars Technica noted that Psystar made several changes to its Web site while it was down Monday. First of all, the product is no longer the OpenMac, it's the Open Computer. Psystar's owner, Rudy Pedraza, told Ars that Psystar did that on their own to "avoid any issues." Wonder what those might be.
The company is also now offering the "OpenPro Computer" in addition to the Open Computer, which might remind you of a certain desktop computer sold by a certain California company that uses a piece of fruit as a logo. That machine costs $999, can be upgraded to quad-core processors, and is available with Leopard preinstalled.
And, in perhaps the most necessary change, they changed the nails-on-a-chalkboard "not non-safe" phrase attached to the description of whether or not you should install Mac OS X updates to your Open Computer. Grammarians, rejoice.
None of those changes will allow Psystar to escape the basic question about its business model: Apple doesn't permit the installation of its operating system on anything but its hardware. One Psystar employee told Information Week that this requirement means Apple is behaving like a monopoly. "What if Microsoft said you could only install Windows on Dell computers?" the employee told IW.
Psystar is positioning itself as the "open" computer company. The Open Computer uses techniques--hacks, really--developed by the OSx86 project to free Leopard from the confines placed on it by Apple.
"Psystar has assembled a system that is completely operational with Leopard called the Open Computer. We call it the Open Computer to reflect the opening of what has previously been a hardware monopoly," the company wrote on a Web page describing the Open Computer.
Since they brought it up, let's review the basic definition of a monopoly, shall we? And remember, there's nothing illegal about having a monopoly, it's only when you use that monopoly for nefarious purposes that you get pinched.
The business section of Answers.com says, "A monopoly is a market condition in which a single seller controls the entire output of a particular good or service. A firm is a monopoly if it is the sole seller of its product and if its product has no close substitutes. Close substitutes are those goods that could closely take the place of a particular good; for example, a Pepsi soft drink would be a close substitute for a Coke drink, but a juice drink would not."
Debate the aesthetics all you want, but I'd argue that Windows and Linux are, for the purposes of personal computing, close substitutes to Mac OS X. They can run a personal computer. They can connect you to the Internet. They can run a basic suite of productivity applications.
You may prefer Mac OS X for a variety of reasons, but Apple's requirement that you can only run Mac OS X on Apple hardware doesn't prevent you from using a personal computer. If the only other substitutes were Palm OS phones or AIX servers, maybe you would have a beef.
Answers.com goes further to say: "The fundamental cause of monopoly is barriers to entry; these are technological or economic conditions of a market that raise the cost for firms wanting to enter the market above the cost for firms already in the market or otherwise make new entry difficult."
This is not the only computer in the universe.
(Credit: Apple)If Mac OS X was the only operating system in the entire universe, and Apple required you to use its hardware, lawyers would have a field day. That's because the barriers to entry into the personal computing business would be impossible to overcome, since a license for Mac OS X is not for sale.
The meat of Psystar's sales pitch is that they can sell you a Mac for cheaper than Apple. So let's consider the third element of a monopoly: the ability to set prices.
Again from Answers.com: "The major difference between a monopoly and a competitive firm is the monopoly's ability to influence the price of its output. Because a competitive firm is small relative to the market, the price of its product is determined by market conditions.
There's a long-standing argument about whether or not Macs are more expensive pound-for-pound with Windows PCs. But however you slice it, Apple doesn't have the ability to force people to pay astronomical prices for the Mac; if Macs cost four times as much as similarly configured Windows PCs, no one would buy them.
Companies are free to charge somewhat more for a similar product if they can prove to people that there is a value attached to that price. If they can't demonstrate that value, people won't buy the product. No one cares that Porsche charges more for the Cayenne than Volkswagen does for the Touareg, and those are practically the same car. That's because Porsche demonstrates more value with a better interior, cushier options, and the cachet associated with driving a Porsche.
The Psystar employee, identified only as "Robert," said the company had no plans to stop selling Open Computers with Leopard preinstalled, and hinted Psystar would be willing to fight Apple. However, Pedraza, who is likely in more of a position to decide those things than Robert, declined to comment to Ars on Psystar's next steps. Apple likewise declined to comment on Psystar or any possible action it might be considering.
I think they're tilting at windmills, but I'd be very interested to see if Psystar has the wherewithal (and the cash) needed to finance a legal test of Apple's end-user license agreement for Leopard. Courts have ruled on specific provisions within EULAs, but it doesn't appear that the general concept has really been tested under U.S. law. Maybe it's time.
But until that day, companies are not required to sell products simply because somebody wants that product.
Tom Krazit writes about the ever-expanding world of Internet search, including Google, Yahoo, online advertising, and portals, as well as the evolution of mobile computing. He has written about traditional PC companies, chip manufacturers, and mobile computers, spending the last three years covering Apple. E-mail Tom.
Intellectual property is definitely something worth protecting, but does how many people actually think Macs are comparably priced for the hardware?
If so, what is that definition?
I thought the article's definition seemed accurate. Thanks.
"...but...how many people actually think Macs are comparably priced for the hardware?"
IMO, Macs are mostly worth it...but its not just a question of 'hardware', but the total, holistic hardware+software package.
I use Windows every day at work, so its not like my decision has been an ignorant one. Long story short, I have found the Mac to be worth more because for me personally, it results in fewer BS problems that steal my free time from productive stuff.
And from strictly a hardware standpoint, we do really have to watch our comparisons to make sure that we're really comparing relative equals.
For example, the hardware equivalent of the $2799 Mac Pro (default configuration, which includes dual 2.8GHz E5440 quad core Xeon "Harpertown" CPUs) from Dell runs roughly $4000.
(the Dell is a Precision T7400 with dual E5440 2.8GHz Harpertowns, but at 1333MHz FSB instead of 1600MHz; 320GB HD & DVD burner = $3,982)
Cite: http://tinyurl.com/3k3weo ... but for some reason, Dell's link isn't being faithful to the selected configuration: it is downgrading the CPUs to the E5430 (2.66GHz) configuration, which knocks 2 * $240 = $480 off the price. See the "All Options" tab. To configure your own from scratch, go here: http://tinyurl.com/3edmsg
-hh
One of the reasons why Macs are so stable is because the OS is tailored to the hardware. One could argue that Linux is stable and is not tied to any hardware. However, the reality is that OSX is exponentially more refined for the mainstream consumer, and the fact is that the mainstream consumer is where profits are generated.
However, this is sure to make an interesting battle on philosophical and legal levels. And its fantastic PR for Psystar so kudos to them for getting noticed! May the games begin!
Should be interesting to watch play out.I don't think that ultimately it would hurt Apple, as long as people bought the OSX software, even though Apple relies on hardware sales. People who want to do this already can download a pirated version if OSX and do it that way instead.
US Code: Title 15,2
"Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court."
AT&T for example was allowed to monopolize because they argued one telephone system would be better (also how some utility companies monopolize by area.)
However, monopolies in themselves are pretty much illegal. Even if they were legal, no monopoly would last long under your "nefarious" rule because controlling a market is nefarious in itself.
This is why Pepsi and Coke would never throw a knock out punch to each other. They have a perfect situation where they are both making money and use each other as protection against a monopoly.
It also pains me to read an article that constantly uses answers.com as a source.
As for whether or not Mac is monopolizing, I don't think so, and I'm very much anti-mac. But you are a bit mistaken on the law. There are government-granted monopolies, and government monopolies which are legal. However, if a company takes control of a market without the governments ok, its illegal.
"While it is not illegal to have a monopoly position in a market, the antitrust laws make it unlawful to maintain or attempt to create a monopoly through tactics that either unreasonably exclude firms from the market or significantly impair their ability to compete."
Having a natural monopoly, because you patented a technique or product and you're the only one who has figured it out, is not illegal.
As far as Psystar goes... I just don't see them lasting more than a few weeks. It would be very interesting to see EULA's tested in court... but I just don't see it happening in this case.
I hope Leopard has the cojones and money to give Apple a run for its money!
company go out and develop their own operating system and
hardware to sell. Then they won;t have to steal something from
Apple. Your whole line of reasoning is ridiculous.
It WILL happen, whether "we" like it or not!
an integrated product, in this case a computer or a phone with
their own software that runs it. We are granted a license to run and
purchase and/or download upgrades to the software running on
our hardware. You can buy any computer you want. But if you
want a computer that runs Mac OS X you have to purchase an
integrated Apple solution.
Unless you think that buying parts from various vendors and putting them together is somehow different than any other OEM because they also produce the OS.
Besides, it doesn't really matter how you label Apple. It's COMPLETELY immaterial.
Apple sells a product. That product has an EULA that restricts how the customer can use it. Is it or is it not legal to violate the terms of that EULA to modify the product and resell it?
I believe that is the only relevant legal question here... Of course, Apple can use a fleet of attorneys and lots of money to bury Psystar and make sure this never sees the light of day in a court. Let's face it, if the courts ruled that EULA's were invalid when restricting what would normally be considered fair use, that would be very bad for Apple. Why risk it?
As a side note... even if EULA's were tested and found invalid, Apple could still arguably stand on the DMCA. And don't get me started on THAT subject.
The reason is that people here are using the wrong analogy. It's not a Honda engine that must be used in a Honda-badged car... it's intellectual property.
The better way to think about it and why Apple will prevail in a lawsuit is this: A photographer can sell rights (read Licenses) of his copyrighted photos (read Software) to any number of parties that he wishes. He can also specify exactly what those rights allow in terms of time frame, type of media, location, etc. For example:
In return for $xxx and other valuable considerations, I grant you the right to use xxx photograph for a 1/8 page ad, no larger than 8 inch x 10 inch, in the New York Times for the weekend of xxxxx.
In the example above you have a very specific time frame, publication (or location), and even size. Provisions such as this in licensing intellectual property have been upheld in court. Also, think about a software site license restricting use of said software to a particular address. Those have been upheld as well.
It's only natural to be able to dictate platform as well. I predict a win for Apple although I'm against it in principle.
http://www.youtube.com/watch?v=AEVMGgUvpSY
Now, will someone answer me this: why doesn't someone just create some software to run the Mac OS on a PC, the same way that Mac OS can run Windows on a Mac box (and by most reports, Macs run Vista faster than a native PC box - go figure.)
Seems like an easier solution than building the box and saying it will run Mac OS until the next upgrade.
The parts aren't counterfeit, unless you think that only Apple can buy XEON processors etc.
As long as the buyer realizes that Apple won't support it I don't see a problem with this.
Maybe it will force Apple to be a bit more open which will benefit everyone.
made to go in Automobile X, Y or Z, and the warranty issue is
the OEM for X Y Z if an Aftermarket part is present.
Apple does not make OS X as an "Aftermarket" product, so the
above does not apply.
A better analogy would be if someone with a Ford Mustang
wanted to add a Porsche-designed-for-use-in-Porsches ABS
braking system to his car.
The question is: does Porsche have the right to deny support to
the guy who hacked their product to install it into his Ford
Mustang?
-hh
the Apple universe as a separate market. I don't think that
argument would fly in any court of law. Apple sells their
products in several markets (PC, mp3 player, cell phone) and
they most certainly aren't a monopoly in any of those markets.
All this chatter about EULA and Apple's "closed" system is just
wishful thinking on the part of the geek squad crowd. This
Psystar outfit will be sued out of existence and without much of
a fight either.
Personally, I think APPLE is stupid here. They should just worry about the OS and allow people, like myself buy the OS so I can install it on MY PC of choice. I was very very interested in MAC OS when I heard APPLE was going to switch to the Intel CPU. I finally thought maybe I would buy it and learn it, even have my company write software for it. But when I heard you had to buy Apple Intel hardware - I said NEVER MIND.
I just don't think they will be (highly) successful as the legal bully in the WinTel Mindset/Market world as they were in the MAC only world. To many forces against trying to have an xclusive OS and HARDWARE business model and to LEGALLY hold that right perpeturally.
No doubt, there is legal grounds here to finally put Apple in a position they are not use to.
An OEM copy of Windows is locked to not just one vendor's PC, it's locked to a single piece of PC hardware.
Likewise, Microsoft has limited certain versions of Windows to not be run on a virtual PC.
Seems Microsoft and Apple are doing the same thing. So how can one be guilty and the other innocent?
Trying to restrict the user's use of a product, the hardware that it uses and the very activities of the what the user does with the product, such as copy his or her own DVD's, has become endemic.
Microsoft has actually been one of the companies in the forefront of this privacy busting spree which serves to additionally diminsh the "human resources", that is the "consumer" that purchases their product.
It is time that the courts blast open the air trite (sic) legaleese, agreements and convoluted proscriptions, caveats and don't do dis and don't do dats that have cropped up every time we buy a consumer electronic device or software.
YES, Microsoft is in on it too with their attempt to tie their operating system to specific hardware - but of course I STOPPED using Microsoft quite some time ago, switched to Linux and have been doing well ever since.
As an additional indication that all is not well with what Microsoft policies are doing, their are BILLIONS of dollars and fines levied against them by the European Union for anti-competitive tactics and it is high time that we make clear to every corporation, NO MATTER HOW BIG, NOW MATTER HOW "SUCCESSFUL", that they are not laws unto themselves and CANNOT do whatever they please.
Perhaps the biggest problem is that unlike most other computer companies Apple doesn't provide their resell partners much profit margin even on their high end units to make it worth most retail stores to carry any macs. In a lot of markets unlike recently you would have a hard time finding any retail store to play with a demo unit. Even with good reviews it is hard to sell a $1K+ product sight unseen.
Apple really needs not only a mini tower, but they also really need a tablet. While the Macbook Air is really a niche product it has sold quite briskly. There is the modbook, but I think a lot of people would prefer an officially supported Apple Tablet.
I don't know that Apple needs to license the OS to other vendors, but they definately need to a much larger line of desktop and laptops.
Have you ever opened and looked inside a MacPro system? If you're comparing the smooth edges and virtually screw-less architecture of the MacPro chassis to a PC chassis with sharp edges that can cut your fingers, and surface metal rusting inside that can only remind you of a SPAM can, then I can argue no further. But those extra dollars spent on a Mac is quite obvious just by looking inside one.
And I haven't even touched on the software....
If you'd just added in the 20" glass LCD monitor, a warranty, free software updates, the keyboard, mouse, etc. you might have spent a couple hundred bucks more for a shiny new iMac. And Apple will guarantee that it works.
You're willing to throw out the guarantee and/or warranty and all that implies for a couple hundred bucks? That's just sad.
(slightly upgraded):
OpenPro Computer
Memory: 2GB DDR2 RAM
Processor: Core2Quad/2.6GHz (+ $400.00)
Hard Drive: 150GB 10000RPM SATA
Video Card: GeForce 8600GT 512MB
Case: Silver
Installed OS: OS X 10.5 Leopard (+ $155.00) OPN15505-PRO
Price-$1,554.99
This is from Apple's website for the Mac Pro:
Start building your Mac Pro with our suggested configuration:
Two 2.8GHz Quad-Core Intel Xeon ?Harpertown? processors
2GB memory (800MHz DDR2 fully-buffered DIMM ECC)
ATI Radeon HD 2600 XT graphics with 256MB memory
320GB Serial ATA 3Gb/s 7200-rpm hard drive1
16x double-layer SuperDrive
Ships: Within 24 hours
Free Shipping
Price-$2,799.00
Now, on the surface, the Apple is $1245.00 higher. What a rip,
right?? There is a couple of things you may want to keep in mind
here though. The Apple Mac Pro is using Xeon processors, which
most people know cost more and are faster than core 2 duos.
The Mac Pro is also upgradable to 32 GB RAM. The Pystar site
doesn't say, but I have my doubts. When Pystar equips the Open
Pro with a Xeon chipset, then we can have a better comparsion. I
do agree, that would be nice if Apple had Core 2 Duo mid-range
tower, but they don't. That is the only real niche (price-wise) that
the Pystar's fill, as far as I can see. The real point of my
statement is that I wish people would dig a little deeper before
accusing someone of being a rip off.
Apple, Macs, and Mac users.
You're so transparent.
What's that sound?
It's the PA system at BestBuy - Geek Squad guys, you're break is
over.
No go wax that neeto VW and be on with it.
If you feel you must steal from Apple for the common good, consider the dull products you would be left with without Apple. Better yet, try to do better than Apple in your own garage. Its not easy is it? While Apple itself has a bit more pride than they deserve, they have earned market differentiation. Pay up and shut up.
In any case, what you fail to understand that NO ONE has a PERPTURAL EXCLUSIVE RIGHT to ideas and/or patents. The government only gives inventors a RIGHT or CLAIM for the sole purpose of eventually relinguishing it. Read the US Constitution.
That this means is that inventually you can be LEGALLY clone. The different now with APPLE entry into the INTEL and WINTEL market, is that they really can't do the same thing like they did before. If I buy SOFTWARE I should be able to run on the HARDWARE I chose. Its a muddy area, I acknowledge, but only because you do have a legal right with patents - i.e. the TPM chip. But once that PATENT expires, you no longer have the rights stop competitors or for the industry to better mankind with BETTER versions of what APPLE did with their stuff.
Now I could throw in a cheap shot about under-aged third world/slave labour but just this once I won't
on any Intel box for $699 (for example) and make a heap load of
(more) money. For that matter, they could take the OpenStep
route and port OSX to Sparc and other RISC chips. People will
still end up buying Macs because Apple will probably continue to
innovate on the hardware side and make great products.
I don't think Apple can lose in this battle no matter how you
look at it.
its the OS that makes the difference and thats what people want.
- Hope They Sell A Few
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by open-mind
April 15, 2008 4:23 PM PDT
- Not because they're tremendously cheaper (they're not). But rather because they are filling the huge gaping hole that Apple has chosen to leave in their product line: an entry level tower.
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Reply to this comment
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Showing 1 of 3 pages (166 Comments)The comparisons between Apple and Psystar hardware are silly, since Apple's current-low end tower is an 8 core Xeon, and the Psystar is not a Mac Mini or iMac replacement.