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  • Does the World Really Need Mac Clones?

    November 24th, 2009

    From Day One of the arrival of the Apple Macintosh in 1984, many insisted Apple was missing the boat by not licensing its crown jewels, the Mac OS, to other companies. This theory had it that Apple would benefit big time as more and more computers bearing their operating system became available.

    As some of you might remember, however, the Mac OS was actually free in those days. The few people who actually got online, and could afford to remain there for hours retrieving the files at a time when there was a hefty charge for such things, could legally download the files and copy them to floppies. If that wasn’t possible, you could always visit a friendly dealer, a Mac users group or a friend to make copies for you.

    In the 1990s, that stopped, as Apple decided that the Mac OS should be a separate, standalone retail product, even though it was still designed strictly to run on Macs. However, that didn’t stop an occasional enterprising company from buying up old Apple ROMS, bundling them into their own hardware, such as portables, and selling unofficial clones.

    At a time when Apple’s leadership lacked a long-term game plan, they relented and decided to actually license the Mac OS and reference hardware designs to several companies, small and large, to spread the joy. Certainly there were loud cheers both from the tech media and customers who felt they could now buy computers running the Mac OS without paying what was then a real Apple Tax, a far higher price to buy a real Mac.

    I suppose Apple didn’t consider the laws of unintended consequences, because the contracts were poorly crafted. Indeed, I would think that the executives who negotiated those deals should have been fired forthwith, although I suppose most of them departed anyway when Steve Jobs returned to the company.

    In any case, such aggressive startups as Power Computing went after Apple’s core market of content creators with a vengeance, building cheap hardware that happened to run the Mac OS and undercutting Apple at every turn. In the quest for rapid growth and short-term profits, I suspect Power Computing’s executives didn’t realize that they, and other licensees, were cutting off Apple at the knees and would ultimately kill the company, and the operating system they licensed.

    Steve Jobs put a stop to this deal from hell in a very smart fashion. The contract licensed Mac OS 7, so he renamed the next version as Mac OS 8 and crafted a proposed contract with terms far too onerous for any of the existing licensees or any potential licensee to accept. Apple bought Power Computing in a $100 million all stock transaction, the main benefit of which was Power’s wonderful online order system. That formed the basis for Apple’s online store, by the way.

    In any case, with the clones history, Apple shored up its bottom line, shuttered poor-performing products and development initiatives and reemerged as the huge success story it is today.

    Despite the ongoing demands by some elements of the tech media that Apple needs to open up its ecosystem and allow third parties to legally use its operating system, it’s clear to me that it won’t happen anytime soon or ever. Apple continues to make record profits, and sales of iPhones and Macs continue to grow at rates that surpass most of the competition.

    How can you argue with success?

    Well, I suppose if you’re running another company, saddled with the garbage that Microsoft continues to foist on you, there must be a huge incentive to license a different operating system, and it’s clear to me that Dell, as a key example, would jump at the chance if Apple decided to let them install Mac OS X on their PCs. Indeed Michael Dell has already been quoted in one email that he’d be delighted to do so if the opportunity arose.

    However, in the retail marketplace, Apple’s products are unique. Although they use industry-standard parts for the most part, their products continue to set the trend for style and they are even environmentally friendly nowadays. So when you buy an iPhone, an iPod, a Mac or any other Apple gadget, you are getting something that not only looks pretty, but works beautifully with one of the best reliability rates in the industry.

    Except for a handful of premium PCs from Sony and some specialty makers, the average PC looks dull, undistinguished, and has little beyond a nameplate to separate it from the competition. Does Apple really want the Mac OS to run on such products? Besides, Apple would likely confront the same nightmare that Microsoft regularly deals with, making the operating system run properly in tens of thousands of possible system setups over which they have no control whatever.

    More to the point, Apple is in the business of making money, and they’d have to sell may times more software licenses before they’d earn enough profits to match what they lose from hardware sales. That’s because cloners would undercut Apple’s products at every turn, and sacrifice profits in order to build market share. In other words, Apple would likely put itself in the same perilous position that existed in the mid-1990s before Steve Jobs stopped the cloning.

    This hasn’t kept hobbyists from building their own Hacintoshes. In the end, some of these people might even decide that it’s less irritating and time-consuming just to buy regular Macs. There’s also the issue of Psystar, that little company that continues to flout Apple’s user license, despite losing out in court. Whether they are a stalking horse for a bigger company, or just a handful of eager young people who threw the dice and hoped it would pay off, they will be gone soon.

    Yes, there would be lots more options should Apple decide to license its operating systems. But it’s just not going to happen.

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