In the 1980s, Bill Gates told Apple’s CEO at the time, John Sculley (the former soft drink executive), that he should license the Mac OS. As far as Gates was concerned, Apple would own the market.
Well, what really happened was that Sculley, in his infinite stupidity, actually licensed some of the Mac OS to Microsoft, and that gave them a wedge to build Windows and, along with clever marketing, bait and switch and smoke and mirrors, allowed Gates and company to become the world’s largest software maker.
Apple finally relented and began to license Mac OS clone computers in the mid-1990s. They hoped to expand the market for the company into segments they couldn’t hope to reach all by themselves. However, the ill-considered program allowed other companies to go after Apple’s core markets with a vengeance, with faster and cheaper hardware.
That and other foolish decisions nearly did the company in, and you can well understand why Steve Jobs killed cloning with the finesse of a master slasher shortly after he took over as “interim” CEO. A leaner, meaner Apple became a major success, and most of you know the rest of the story.
With the arrival of Intel-based Macs, many felt it would be pretty simple to induce Mac OS X to run on ordinary PC hardware. In fact, it is, although it requires a few command line tricks to get it to function. There’s plenty of online information on the process, so I won’t bother to summarize it here, except to say that installing Mac OS X on non-Apple hardware violates the user license.
Apple didn’t bother to go after the small number of individuals who built Mac OS clones, mostly as hobbies. They didn’t even call out the lawyers against Macworld’s Rob Griffiths when he did the very same thing for a feature article, since it was done purely as an experiment, and not as the beginning of a venture to sell such products in the retail marketplace.
Psystar, however, a Florida-based company, is in hot water with Apple because it tried to turn a hobby into a commercial enterprise. While attorneys may evaluate the pros and cons of the legal position of the two opposing sides, let’s look at the practical consequences if Apple were to allow official operating system licensing.
Now we know that the major PC makers would love it. There is a widely-quoted email from Michael Dell admitting that his company would be delighted to offer Mac OS X to their customers, and I’m sure the executives from HP, Acer and other PC makers would agree.
It is not going to happen, however, except in the unlikely event that Apple loses that lawsuit it filed against Psystar. Indeed, if it did suffer a defeat in the courts, that might mean the end of Apple as you know and love it.
You see, Apple succeeds largely by providing integrated solutions, with the hardware and software tightly knit to provide a carefully-tailored user experience. Where Microsoft licensed its PlaysForSure technology to allow third party consumer electronics makers to build their own digital media players to compete with the iPod, it was an abject failure. In the end, Microsoft tried — and failed — to duplicate Apple’s strategy with the Zune, which meshes its own hardware and software solution.
So it’s not just vertical integration, but doing it right that counts, and that is why Apple succeeded first with the Mac, then with the iPod and now with the iPhone. While they all suffer from the usual number of software defects, everything is designed to work together and they usually perform seamlessly. That’s why Apple’s products get the “just work” label, because it happens to be true most of the time.
The other factor is that Apple earns the lion’s share of its income from hardware. Mac OS X retail upgrades provide only a fraction of their earnings.
If Apple were to license Mac OS X, perhaps they would sell several times as many upgrade packages as they do now, but with loads of cheap PCs running the operating system, sales of Mac hardware would seriously suffer.
This doesn’t necessarily mean that Macs are overpriced. Despite that repeated claim, when you compare both the hardware components and the bundled software, Macs and PCs are usually comparably priced. Sometimes one is more expensive than the other, sometimes the reverse. As you move up the line, Apple even does better. As I’ve mentioned previously, for example, a Mac Pro is way cheaper than a Dell Precision Workstation with the equivalent options.
The second issue is one of compatibility. By having to test its operating system for a relatively small number of systems, Apple can build its operating systems faster and with greater reliability. One of the huge problems Microsoft confronts regularly is that its products must run on tens of thousands of possible configurations. They are forced to hire more quality control people, and it takes far longer for them to release major Windows upgrades. And that doesn’t even consider a less efficient development environment.
It’s also important to mention that Microsoft gets most of its Windows income from OEM sales direct to manufacturers. Sales of upgrade kits play only a minor role in their financial picture. If they had to depend on the latter, and not on those tight, legacy contracts with PC makers, they wouldn’t do near as well.
In the end, cloning may expand the audience for Mac OS X, but it would seriously cripple Apple, and, in fact, seriously hurt their prospects for future prosperity. That’s not what they want, and I suspect that’s not what you want either.
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