Apple vs. Psystar: Why Must the Startup Persist?

Lora Bentley

Earlier this week, Psystar released yet another Mac clone -- choosing to ignore the copyright infringement lawsuit pending against it in federal court in San Francisco. InformationWeek's Antone Gonzalves points out that the move is a risky one given that Apple is asking the court to require the Florida-based startup to recall the clones it has sold. Never mind the compatibility problems that could crop up running OSX on non-Apple hardware.


Try as I might, I don't understand this one. Why would a small company like this invite trouble from the likes of Apple? And in the middle of a lawsuit, no less?

Gary Kaplan is a partner in the law firm of DeForest Koscelnik Yokitis Kaplan & Berardinelli in Pittsburgh. His practice includes IT law, antitrust and commercial litigation, among other things. Having recently written on "the circumstances and motives that lead to costly, and often wasteful, litigation" in his book, Executive Guide to Managing Disputes, he offered his insight.


In an e-mail, he said,"[Psystar] may be banking on PR pressure to persuade Apple to relent. Alternatively, it may be based on short run expediency and a hope of making it too costly for Apple to maintain full control over its systems, regardless of any right to do so." Either way, he says, the startup is facing an uphill battle.


He explained the short-run gain strategy this way:

Psystar doubtless recognizes that losing the lawsuit will likely end its business. If, however, the lawsuit (including appeals) takes several more years, it can continue to generate revenue (and presumably cover the cost of the litigation). Further, Psystar may be thinly capitalized with modest assets that its owners are willing to gamble and lose. In the event of a loss, it could declare bankruptcy leaving Apple with little in the way of tangible recovery.

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Mar 21, 2009 7:00 AM Martha Williams Martha Williams  says:

Consumer choice is always good especially in this economic climate. People don't tend to look at luxury items in the same way. After all a Mac is just a computer after all. Mac OSX actually runs very well on a variety of different hardware without any issues.  You don't have to search for to find many website dedicated to this.

Apple are scared because it's difficult to justify the high mark up been paid for inferior hardware. Unless of course the "I'm a Mac" cool factor still applies.

For the consumer it's in the best interest that Psystar win.

Mar 23, 2009 10:43 AM Voice Voice  says: in response to Martha Williams

Actually, and somewhat counter-intuitively, in poor economic times, people generally buy either because of an immediate need, or because of the perceived quality and value of a product.  People don't buy cheap because they know they won't be able to afford to replace it.  Instead, people tend to invest the small amount extra to ensure that they get something that will last.

Mar 24, 2009 2:15 AM Brad Brad  says: in response to Voice

hmm, do you have anything to back up this conjecture?

Mar 30, 2009 5:41 AM Brian Brian  says: in response to Brad

Apple software is the only part of an apple that is superior.   Their hardware is now just modified pc hard ware and made by the same manufacturers that make pc hardware.   I can build a pc desktop that is far superior then the apple when it comes to hardware, and now I can run Mac OS on it and have the best of both worlds.   And at a cost that is less then half the cost of the apple branded model.

     Apple does inflate the cost of their hardware due to their license agreement of their software.   Some people will say they are charging extra for "an experience".   I honestly do not feel that there is any extravigant, or signifigant enough of an experience to justify the unrealistic prices that apple charges.  If Psystar wins this case, Apple will be forced to lower their prices of their hardware so that people en masse can actually afford them.  And when that happens, more customers will buy apple over the cloned models and Apple will build up a much broader customer base.  And for those who still purchase the cloned model, Apple will still make money off of the sales of their OS.

    Apple's business model they are fighting so hard to protect was started in a time when computer hardware was so much more expensive to manufacture, and their cometition was pumping out the hardware at a price that apple could not match, and thus began losing business.   Now that Apple really does not manufacture much of their own hardware and have premium top class discounts on their hardware... they can afford to allow some competition.

     Competition never hurt the consumer, and has always benefited the product via ingenuity, change and progress.

     As long as apple keeps their prices unrealistically high when it comes to the average household on lower middle class to middle class income... People will continue to find ways to run their software on pc hardware.

But that is their right to fight to keep a business model that doesnt truly benefit them anylonger.

Mar 31, 2009 1:10 AM Timur Timur  says: in response to Brian

Regardless of the outcome of the lawsuit, Brian's comment highlights the   problem with the quality OS availability. Apple's pricing would become much more sensible, should there emerge an alternative to Mac OS X product, combining the versatility of the Unix with the simplicity and stability of the user interface of X.

Apr 9, 2009 2:23 AM Anonymous Anonymous  says:

I don't think most people realize what the consequences of this are. If apple loses, it won't mean more consumer choice. It might mean less. Apple will just likely stop selling full copies of OS/X. No one can force them to sell the product. It will hurt mac users more than anyone  else, but apple can always just go to upgrade cds and HP style recovery disks, where disks only work with the model of computer purchased and ship with the computer purchase.  Apple has already once nearly gone bankrupt in 1990s when they opened their liscense to open market.

Apr 14, 2009 8:24 AM Seth Seth  says: in response to Anonymous

Anonymous, that's because other companies sold hardware that was a better value than Apple's.  I will admit that Apple makes some very good-looking hardware, but that does not justify the fact that it costs at least twice as much as comparable PC hardware.

I am going to wait until this suit is over before I decide whether to buy a Psystar or not, but the Open(3) with iWork, a 3.0 ghz Core 2 Duo, 4 gb RAM, wireless card, a GeForce 9500GT 512mb DVI/VGA, and a 23 inch Acer monitor from Newegg costs $1300, while the 3.06ghz iMac with iWork, and a worse GPU costs $2248... $1000 more for a cool Aluminium case.

I hope Psystar wins.

Apr 27, 2009 3:40 AM pbg pbg  says: in response to Seth

Apple will lose!

They sell a box retail = I can install it on anything i want, just like Windows!

They no longer make their own proprietary hardware, so they cant say they are being infringed upon in that respect...they use what everyone else is capable of using... all they did was buy a bunch of parts, install them in a box and add their operating system.

They lost this case when they switched to an open hardware platform and even longer ago when they decided to sell the operating system separate from the hardware.

They will lose this case .. PSystar will continue... and more companies will sprout up selling OSx on any hardware. The only thing Apple will do is start charging more for the retail box set... which it should have done long ago. That i dont mind.

Even if by some miracle (pay-offs) Psystar loses, Apple still loses since the know how and hacks will continue... the days of greed are over... more people are catching on to the stupidity of over paying for the sake of a name.


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