Do Psystar deserve to go bankrupt?

As many of you may know the online computer manufacturer Psystar have filed for bankruptcy during their long-standing legal battle with Apple over supplying computers with OS X pre-installed. Specifically, Psystar was intentionally breaking Apple’s EULA by claiming that the proprietary nature of the OS was against fair-play rules of the market place. Apple, in-turn have started a very lengthy and expensive legal retort that not only claims a break of their EULA, but that the methods used to install the OS infringed upon the Digital Millennium Copyright Act, presumably because the PCs in question had to use a hacked version of OS X. This filing for bankruptcy seems to show the court case is slowly coming to end, with Psystar running out of money, presumably because it’s backers may have stepped down. This in itself is an interesting point, as the equity creditors will have to revealed in court, so those who have been secretly supplying cash to Psystar (who, lets face it, are a tiny company who would never have been able to keep this court case running for so long on their own) will be revealed...one can only speculate on who it may be, if it turns out to be a big competitor to Apple I’m sure there will be even more hell to pay.

All this legal mumbo-jumbo aside, the real focus of this blog entry is to consider whether Psystar were in the right not necessarily legally, but morally, to provide OS X on their machines.

First of all the reasons behind Apple’s iron grip on its OS must be considered. I think this may be an easy one, basically it’s because OS X adds value to a machine in a way Windows could only dream of. If Apple produced their products with Windows installed I very much doubt their market share would be anything like it is now, and furthermore I doubt their pricing could be sustained either. The core to the Apple computing arm is the OS, clear and simple, it’s the OS you pay the premium for, and as such Apple don’t want anyone else using it, because despite how nice their products are from a hardware point of view a large percentage of people would stop buying them if they could get the OS elsewhere for less.

Secondly, Apple sells an experience. As Steve Jobs has said ‘those who love software build their own hardware,’ which neatly sums-up Apple’s entire view of the computer market. As anyone in the know will tell you, the majority of BSODs on Windows are due to bad drivers, namely the hardware and the software aren’t playing nice, and one of them inevitably throws a tantrum. The whole of Apple’s ‘it just works’ ethos would come crashing down if OS X were licensed out to other companies, because then OS X would be become completely open to all the Windows problems mac users often claim superiority over.

With this in mind I can see how Apple would have a momentary heart-attack when they discovered some tiny company has taken their OS and are selling it to people on potentially incompatible hardware. Now, Apple are ruthless when it comes to legal-battles, really ruthless, and despite the fact Psystar wont have made even the tiniest of dents to Apple’s revenue stream they went straight after them. But are Psystar really that bad? After all they’re doing what Apple have refused to do for years, make their products affordable for the average user. Macs are seen as luxury items, and as such there is a premium, but sometimes Apple comes across as plain greedy (take their online prices for RAM upgrades). Now I’m all for more affordable macs, but obviously you don’t want the quality to falter either, it’s a balancing act, but lets be honest the one reason holding many switchers back is the price, and I’m pretty certain there’s something Apple could reasonably do about it.

I must say, I quite like the peppy little underdog throwing a finger up to the big companies, however, I also understand that if someone buys a Psystar machine and has a problem using OS X (which was never designed for that computer) they wont blame Psystar they’ll blame Apple, thereby denting the reputation of the OS. Now I’m not trying to sound too much like a fan-boy (though that ship may have long sailed), but what I don’t like are uninformed lies, and someone who buys from Psystar, has a problem, blames Apple and then goes around telling everyone that OS X sucks is lying. It would be like buying a pirate DVD of an incomplete screening of a movie and saying the movie sucked because the image quality was poor and the special effects were bad.

Despite Apple’s reputation for nasty legal battles, I must say I think they were in the right this time. Psystar broke the law, but more than that, I think they were morally unjust in potentially creating poor computing experiences on the back of Apple’s OS. In addition, the continuing claims by the company that they didn’t do anything wrong, and that because of their size they didn’t have to keep financial records are a joke. It’s going to be interesting seeing who’s been behind them all the way, but as far as I’m concerned Psystar got everything they deserved.

What’s your view? Comments are always welcome (as long as they are posted in a considerate nature, this is a debate not an argument). Don’t forget to check-out my full blog at http://martynmcfarquhar.blogspot.com for additional content that wont be appearing here.

Tags: apple, mac, osx, psystar

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Comment by Daniel Roop on September 14, 2009 at 4:27pm: I think everyone has missed the point. We have a free market and Apple has chosen a different path from that of Microsoft. Apple sells a closed source OS installed on closed source hardware. Microsoft sells closed source software that runs on open source hardware. It is my view that a great machine running Windows will run every bit as well as an Apple running OSx. It is also my view that Microsoft's strategy brought affordable computing to the masses in a way that Apple never could with its closed source harware and software marketing strategy. My first workhorse computer was a CP/m based Kaypro with 64K (not megs), a 5.25"floppy and 10mb partitioned into 2 5mb partitions. It cost $6,000 Canadian. If Jobs had had his way, we would be spending more not less, than this.

Comment by John M. on June 3, 2009 at 1:39pm: Alright, but what I want to know is: if it's Apple's OS, why don't they have the right to specify what hardware they'll let it run on? I don't see how you can call them anti-competitive since if you have Intel-compatible hardware, you have lots of OS choices (Linux distros, Windows, BSD) other than Apple. And since they sell their computers as a package deal (OS + hardware), why can't they be the ones to stipulate what's in the package? Psystar was basically an attempt to force Apple to do something they really don't need nor have the desire to do; compete directly with Microsoft and force them to write "better" software. (To me, it's kind of like trying to force BMW to sell 5-series sedans at Chevy Impala prices.) As long as Apple has such a huge mindshare, and can sell their products at a premium, they'll be happy to keep to 5 - 10% of the market for new PCs; they make a healthy profit, and Microsoft has no real reason to try and crush them. That's why MS is more worried about Linux than Apple.

Comment by Dan on May 30, 2009 at 9:33am: It's all pretty simple really, the mighty $teve Job$ and Apple can beat up whomever they want, because they can. Like to see Microsoft try that. And you KNOW arrogant $teve Job$ couldn't stand anything less then an elitist "I'm better then the rest of the world" reputation. His junk is made in China anyway.

Dan

Comment by Dafz Thomas on May 29, 2009 at 3:43am: I think Psystar deserves it simply because they could be destroying the OS' reputation. And firstly it would be nice to have OS X on any computer but the problems windows has, will come to OS X in that matter. So I think that Apple should team up with companies like GIGABYTE, MSI, ASUS etc, to make "mini" drivers very slowly to get the OS compatible with all hardware. This is a long shot but could be possible. And this is what Microsoft are doing with Windows 7, is that their talking to many hardware companies to get their OS to be compatible with just about any hardware out there.

Comment by luis contreras on May 28, 2009 at 3:59pm: to be honest every time i saw the Psystar ads on youtube i thought it was a scam.. the machines looked like toys and it never crossed my mind to buy one..this kind of reminds me of a guy that got busted for selling Ferrari cars but with a cheap motor in it for about 5 times cheaper than a real ferrari.

Comment by Sharron on May 28, 2009 at 2:23pm: Apple's policies, whilst in some ways being logical, were also anticompetitive. It is wrong that they should have the right to withhold osX from other hardware-builders, as well as software developers.

Apple's products remind me of the kind of quality engineering one would see aboard the space-shuttle, and even without osX they could demand a higher retail price than other systems. - Although their hardware is indeed highly overpriced nevertheless.

Whilst you have a valid point about driver issues; the quality of the overall software profile would come with the territory, inasmuch as only Apple themselves would produce the real Macoy; anything else would be an imitation and subject to quality flaws parallel to the price paid for the system.

Whilst it is true that Psystar's accounting leaves a lot to be desired in terms of US Law and the judiiciary, it would appear to my mind that Apple have only won - if this is indeed the case - by throwing enough weight around due to their comparative size.

I really don't think an Apple victory proves anything other than the moral that a small player such as Psystar shouldn't wage war against a giant that it has no chance of beating in the long run. History tells us in at least 9 cases out of 10, that although the smaller player may win a number of battles, they'll eventually lose the war.

-Anything else is usually fiction and produced by Hollywood. End of story.

Comment by Martyn McFarquhar on May 28, 2009 at 11:21am: I'll freely admit that the point about incompatibility was conjecture on my part, however, it is based on the knowledge that OS X is not designed to run on anything but Apple systems. This basically means that to get OS X working an any non-Apple system the OS needs to be hacked. I believe that this is regardless of whether you build a hardware replica of a mac, though I could be wrong, have a search for 'hackintosh' systems and you'll see the problems with getting OS X to run. I will admit though that there may not be any problems with OS X on Psystar machine, my point was basically to present a 'what if...' scenario as a backup to Apple's logic behind pursuing Psystar. Though of course it probably all comes down to money and greed anyway, but Apple's had things stolen off them before by trusting peopl ('cough' Microsoft 'cough') and they obviously don't want that to happen again.

Comment by wade on May 28, 2009 at 9:14am: i think you made a great point about apple's reputation. nice entry!

Comment by chip.black on May 28, 2009 at 9:00am: 1. I don't support using copyright laws to support anti-competitive practices that run counter to our
anti-trust laws.
2. If you had statistics that show Psystar equipment isn't compatible with OSX I'd accept that part of
your argument. But you don't you're basically saying "something bad might happen." That's not
evidence. That's stacking the deck with imagination.

Whether or not Psystar broke the law is for the courts to decide. The deserve to have their day in court, they do NOT deserve to be out-spent into the Stone Age by huge corporate pockets. Because that's what anti-trust is all about. Our anti monopoly laws aren't about preventing corporations from owning every possible alternative. They about promoting good capitalist competition. WE, We the People do not "deserve" to be subject to big corporations using money to buy "justice" instead of having to prove their case in court. Therefore we should oppose the idea that Psystar deserves to run out of money before they can stand up to Apple in court.

Comment by gypkap on May 28, 2009 at 7:18am: My PC runs Windows Vista; my wife's PC is a Mac running OSX. There's nothing particularly outstanding about her Mac other than the pretty logo on the cover, especially not the odd Mac user interface with its bouncing icons and so forth. Oh yes--and the fact that she can't install OSX on any other personal computer other than recently manufactured Macs. Older Macs are no longer supported by Apple.