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Is Piracy the Pathway to Apple Profit?
An anonymous reader writes "Over at Apple Matters Chris Seibold writes an interesting piece hypothesizing that Apple's strategy may bank on people pirating OS X for their Intel boxes."
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Worked for MS :) /flame on
"Old man yells at systemd"
Serisouly, this very same issue has been discussed in ever Apple story on /. in the last week (yes, in every last one of the about million stories there were.)
And if you remember the story about the OSX for Intel torrent (which seems to have been fake), you'll find about 500 comments about this very issue.
Seriously, this is getting boring.
Why not just wait till the first Apples with IntelInside hit the market, then we'll know for sure.
Piracy of the OS means that its userbase will increase exponentially. Then there are more people to lock in and sell other products to. I guess a few of the people who switch to OS X will also start to like iWork and some of the other apps that OS X allows them to run. More people using Apple's software will only benefit Apple.
The people who run pirate copies will probably be the people who would never buy it anyway since they already have Windows... probably the same people that think they got Windows for free with their computer.
Follow me
Ok so where exactly did Steve Jobs say it would be a PC inside. He said Intel CPU's. Now given they are taking over a year to redesign the insides from PPC CPU to Intel CPU I doubt it'll be stock PC hardware in there.
Also Apple is at heart a hardware company. If they start using off the shelf PC type architecture why buy a Mac when all you need is the O/S?
I reckon it'll be Intel CPU's, but still speciallised hardware so you still have to buy hardware from Apple.
No, I don't think so. Ignoring the huge sweeping generalisations that are bound to happen in this thread, I add my own -
... marketshare. Nope, this won't work anymore.
Peaople of a certain mindset:
When you can't pirate something you buy it or don't use it. Apple gains in hardware and software sales.
When you can pirate something you use it for free. Apple gains in
Apple is a Hardware and Software vendor. When MS 'allowed' Windows 3.1/95 to be copied so freely (read without restriction) they were, and with a few exceptions still are, a Software company only. Apple has the additional issue of not selling much Mac hardware now until the Intel Mac comes out, surviving on reserves, software and the iPod.
Apple has a lot more to lose if it tries this. That and the world has moved on; these are different times.
Since TFA seems to be down already, I assume it is talking about allowing the release of Tiger for Intel to propogate on BitTorrent networks. Perhaps Apple is allowing for this to give curious Windows users a taste of OS X and it's suite of apps, but this certainly would not continue when the final version is released.
Apple could not easily survive as a software company. Apple has been a hardware company for it's duration. Remember back in 1997, when Apple almost died? Steve Jobs had to kill the clones because Apple could not compete with the cheap hardware. Arguably, Apple is in a much stronger position to sell software due to it's larger user base, better public image, etc., but I don't think Apple would profit as much.
Apple is a hardware company that might be hoping that some users download the torrent, fall in love with OS X, and buy an Intel Mac in a year. Or maybe this whole thing is overzealous speculation on the part of imaginative bloggers. Either way, Apple will remain a hardware company and provide an integrated computing solution that is clean, solid, and attractive.
Or maybe IBM just couldn't supply the chips that they promised. Nothing to see here...
How is Apple going to use the DRM features of a chip I do not have to prevent me from installing OSX on my P4? Am I missing something?
;-)
There's a couple of methods they could use:
1. Have Mac OS X check for the presence of an authorization chip ala NES Carts. If no chip is found, refuse to install.
2. Make the OS rely on OpenBoot features. Since PCs have a BIOS instead it would be difficult (if not impossible) to install OS X without swapping out your BIOS.
3. Replace all the crappy PC hardware (e.g. chained interrupt controllers, A20 gate, etc.) and replace it with something more sensible. OS X would then only run on a machine with sensible hardware.
4. All of the above.
Javascript + Nintendo DSi = DSiCade
Pathway to Apple Profit?
Apple needs no pathway to profit - it is profitable as a hardware company. They need software only as a selling point for their hardware. Releasing MacOS X compatible with standard non-brand PC's would undermine their hardware sales - and it would be a pathway to ginormous losses like they had in 1997 and 1998, when they allowed cloning. They are profitable since then precisely because Jobs killed clones. Do you seriously believe he did it only to reintroduce Mac cloning ten years later?
It's no secret that the reason for Apple's comeback was the iPod, who's popularity was primarily due to rampant music piracy. Come on, does anyone really think a college kid purchased 10,000 songs for their iPod at $0.99 each?
Apple is also a company used to having their software run on a pre-determined combination of hardware and software. I suspect these dev kits are no exception. Even if it somehow leaks out, I highly doubt it will work on any 'ol wintel PC simply due to a lack of drivers.
www.lonseidman.com
The RIAA knows this, but they are deliberately ignoring it because they are more concerned with control of the product before profitability. They have the data which shows that music sharing increases sales. But for them the issue is about control of the distribution, so they can be the arbiters of who's "hot" and who's not. They have many artists' careers to control and profit from. Surrendering that control renders them effectively useless, so they will spend millions prosecuting 14 year olds to intimidate people away from making their own decisions about what music they want.
Apple (and Microsoft) basically have one product they're responsible for, and they want that product to succeed both PR-wise and financially, so they'll take advantage of things like "quality control" and "customer preferences" .. you know, those evil capitalist things that actually involves paying attention to the customer.
It's not a lie. It's the truth with lossy compression.
Without those apps, OS X-x86-Lite would likely suffer the same fate as those who "tried" RedHat only to reinstall their orginal Windows because it wouldn't do anything for them.
This is a boring sig
Although there is a MacOSX developer-version that will run on a particular Macintosh "P.C.," it may not run on your regular vanilla P.C.
But what's worse is that it might run on vanilla P.C., but badly. I can see it now: punks downloading Mac OSX "for free" and having it either crash, or have Quartz disabled, or otherwise run funky. Then the fallout on many a P.C. site/blog will be all about how OSX is crap and can't run well on a Dell.
In short, this could turn out to be bad publicity, if there is such a thing.
I think for a lot of people, myself included, switching to a different operating system would mean having to discard the thousands of dollars of software I've purchased in the past and repurchase it. It would take at a minimum a whole software generation (however long that is) for OSX to overtake Windows in the market for that reason, I would think.
Up, Up, Down, Down, Left, Right, Left, Right, B, A, START
as a demonoid member (where this torrent is supposedly tracked from) i can say this torrent is no longer on demonoid (most likely because it was a fake/virus/etc) so i would say dont wast your energy trying to grab it, as there is no chance of downloading it.
Noone writes jokes in base 13!
Apple is also a hardware company, they make most of their money by selling the only computers that can run the software that they sell (by my estimates Apple currently owns, oh, about 100% of the Macintosh market).
Open-source OS X and you not only lose your OS Revenues, you lose the hardware monopoly.
What's left? iPods and iTunes downloads? Hard to afford the Steve's Gulfstream on that revenue.
Somehow, I doubt that OSX will be available on ordinary PCs. Ther is SUCH a variety of PC hardware, this would be unlikely.
Gee, you have a nVidia card? OSX only supports ATI.
Whoops. nForce chipset. Sorry.
Looks like your Athlon 64 does not support SSE3. Now, you software will crash for your amusement. Enjoy!
It is not that Apple could NOT support all of those devices. It is just that Apple is not likely to put the work into it, because they want people to buy THEIR hardware. I suppose that you MIGHT be able to build a PC made just to run OSX (using the components that have drivers), but that would have to be deliberate. Or, you could get lucky and have just the right hardware, but that would be unlikely.
Oh, one more thing. Don't expect 3rd party drivers for mobos. If it is impossible to buy OSX by itself, no mobo manufacturer will support it. Video cards MIGHT be another story. I can imagine nVidia and ATI writing their own Mac drivers if this x86 thing takes off.
Of course, this is just my opinion. I could be VERY wrong about this whole thing.
"-1 Troll" is the apparently the same as "-1 I disagree with you."
The bundled apps like iPhoto, iDVD, iCal or iTunes make the system useful, out of the box, to your average Soccer Mom or Nascar Dad.
Funny - Don't they call that "anticompetitive behavior" when Microsoft does it?
If I follow your logic, then Dell isn't a hardware company, and probably HP neither. They too buy ram, processor, harddisks, screens, etc. Then they make a custom case, custom keyboard, and that's it.
For the moment, Apple is both a hardware and software company.
Its nothing people! It means nothing to anyone that does not already own a mac or who was going to buy one in the next 5 years.
Those people are probably a little miffed.
Apple will have lots of its OS in ROM like the old days. No ROM, No play. So no whitebox OSX support. It wont boot, it wont work. So forget about it.
Apple is not going to make OSX run on any old wintel hardware. They dont want to support all the buggy hardware out there. And the hardware manufacturers do not want to write OSX drivers for their chipsets, video cards, capture cards, and everything else.
So move along. Its over.
Dont worry. MS will get around to making their software tolerable, and then you wont be as interested in OSX anymore.
So be patient.
Oh, and Apple would be making a big mistake if they let Windows run on their boxes. Once users are spending more time in windows than in OSX, Apple has nothing left to sell.
I think the ideal may be more along the lines of 30% Apple, 30% Windows, 30% Linux, 10% (Something mysterious and new???)
Ideal??? Apparently, you don't remember the good ol' days of the Commodore/AppleII/PC clones/Amiga/PCjr/Tandy. Some people would have to run multiple computers at the same time because vendors didn't make software on all platforms. It was a nightmare for software developers, for IT people, and for users. Back in that day, if you wanted to buy boxed software, you had to read the minimum system requirement very very carefully because there were so many different platforms and configurations. You couldn't just buy a piece of software at some shithole like Wal-Mart and be sure that it was going to work on your PC.
So, to sum up... we already saw this in the 80's. And you see where it evolved to?
I don't respond to AC's.
Yes, when a convicted monopolist bundles software as a tactict to further consolidate their hold on an industry, it is called "anticompetitive".
If you aren't a monopoly, you can bundle 'till the cows come home.
I don't see why Apple would leak the software on purpose like some claim
Some (most?) people don't use pirated software, and so you still get their money, whereas if you gave it away, no-one would pay. And a lot of people who use warez wouldn't pay for software anyway. Instead of them stealing somebody else's, they steal yours, and you increase the visibility of your product.
my password really is 'stinkypants'
That's because Aple doesn't command the large share of the market. If Apple had 90%+ of the market, then it would be anit-competative behaviour. Like it or not, the rules change when you become the dominant market force. It was the same for IBM in the 60's and AT&T in the 70's
Atlas stands on the earth and carries the celestial sphere on his shoulders.
I really like your post and wish to add a little to it if I may. If you are a virtual monopoly like microsoft is it would be illegal to sell your software at such a price as to drive out competition. However, if you sell demos that happen to get cracked and this drives out the competition then its all legal and you can't get sued in a trust case. So, IMO that is what MS strategy is. OH NOES!! they stole our software and gave it away to our competitors potential clients Drat!!
If we take the experience with the IBM PCs in the 80's as our template I think it is easy to see that cloning and piracy don't contribute to the success of individual hardware companies.
IBM owned the PC market up until the late 80s but the evolution of cloned hardware destroyed their business. It was Microsoft who made their fortune from cloned hardware not IBM. Microsoft may have benefited from software piracy but they held a unique position of being able to get reliably paid for their products by large institutions like OEMs, corporations and government entities. Pirated copies of their software didn't effect their principle revenue streams because MS didn't have a reliable mechanism for getting people who did pirate to pay in the first place.
I don't see Apple benefiting from clones (de facto or formal) or pirated software. Cloned hardware would cannibalize Apple's own sales. Clones would not functions as well as real Macs which would damage the brand. Trying to recoup by selling the OS and other software like iLife would require serialization and all the headaches that entails in addition to support issues.
Perhaps Apple could gain an edge by capturing the small but influential "hacker" market. People who enjoy futzing with Linux might be willing to suffer the headaches of running MacOS X on unsupported hardware. Beyond that, however, I don't see much advantage.
The same rationalization is floated at all the warez and P2P sites, and it just doesn't hold water. The network effect may be real (up-front loss in sales yields free advertising and subsequent monetary transaction), but it is neither as large or as desirable as they make it out to be. First, if you can download game ABC from the network, play through it in 2 weeks for free, what incentive do you ever have to buy it down the road? What is the point of letting 100,000 people get your game for free only to convert 1,000 of them -- when it's more likely that 5,000 would have forked over the cash had it not been so easy to Google or torrent? Productivity and utility software is a little harder, because its long life usually means that there are several upgrades/updates that invalidate a pirated code, and give someone another chance to "go straight", but there are no hard statistics either way. No, the "lost sales" never quite jive with the numbers the BSA always publishes, but you have to be naive to think that warezed software is anywhere close to effective in getting users to fork over money.
Next, the software industry does not rely on piracy to sell product -- the argument is crap. There are plenty of ways to leverage the network effect without shooting themselves in the foot: time or feature limited demos, shareware, light versions, free framework/pay-for plugins, competitive upgrades, bundling, educational discounts, site licenses, support contracts, etc. etc. These companies desperately want to put their software in front of you, they want you to learn it, love it, advocate it, but they aren't dumb enough to give you the keys to the store without something in return. Adobe Photoshop will still be king even if it wasn't splashed over all the P2P networks, because it's a professional tool and businesses will still fork over the big money to buy it -- regardless of whether Jimmy warezed it or got the $50 version at the campus bookstore. Jimmy isn't the market, and he's deluding himself if he thinks he's doing Adobe a favor.
No, Apple isn't going to rely on warezed versions of the MacOS to build marketshare -- they already have iPods, iTunes, pretty iMacs, and plenty of rabid press to remind people how user-friendly the Mac is. They will produce consumer-friendly x86 iMacs, they will continue to make great laptops, and they will continue to push the MacOS against Longhorn. They will probably license the MacOS to bundle with other x86 computers (HP, Sony) to get even more people on board (but not for free).
Now, the technical hurdles involved in tying the hardware to the OS and vice versa are pretty large. In the end, Apple will be unable to stop people from running Windows on their Mac-branded hardware (Apple still gets their hardware cut) or from running the MacOS on their commodity hardware (Apple still gets a software cut) -- Darwin and Windows hackers will see to it. It doesn't mean they will embrace it, let alone turn a blind eye to piracy as a way to build marketshare, but they will pick their battles and make sure to grab a little revenue where they can. Ideally, when Longhorn ships, people will go to CompUSA or Fry's, and see it sitting next to Tiger on the shelf -- they will think back over all the virus/trojan/worm hassles they've had with Windows, and then decide how to spend their $129. Now thatis the network effect in action.
Think about iTunes -- it's a pretty good solution that makes it easy to find, try, and buy cheap music. Apple has put up reasonable barriers so that they can still get the music industry on board without alienating users. You can certainly buy an album on the cheap, burn it, and give it to your friends or post it to P2P -- but how many people actually do that? It's not worth the hassle for moderate quality music. Sure, the freedom is there to reassure users, but Apple sticks to the corporate line that piracy is bad and easy/cheap is good. Now, the MP3 market may have been forged by P2P, but Apple has done a pretty good job making it profitable without giving away the keys to the store.
Matt Slot / Bitwise Operator / Ambrosia Software, Inc.
I do remember BeOS R5 PE. I installed it on my PowerComputing 150. The problem with their business model wasn't that they gave away a version for free. I think the problem was that there weren't a lot of compelling applications available for BeOS. It was way cool. It did real multitasking-- that was the big 'gee-whiz' for me.
This situation with Apple is different. They've already achieved a critical mass of applications for MacOS X. If people were to install a free version, they'd recognize the credibility of the OS in day-to-day use. BeOS just didn't get over that hurdle.
Seth
$5 / month hosted VPS on linux = awesome!
I have spent many an hour at book stores just sitting and reading, Barnes and Nobles to be specific. And while I rarely buy from them, I do buy from them normally when I buy books. Same principle.
A blog about stuff.
Either way, Apple will remain a hardware company and provide an integrated computing solution that is clean, solid, and attractive.
This gets modded insightful? Should be modded redundant.
Apple just a hardware company? They develop and ship the best OS, as well as a few apps, including what some say are the easiest/most clear and powerful video editing apps.
Dell is a hardware company. Gateway is a hardware company.
Apple produces an operating system, MAJOR applications, as well as nicely designed (though some models pricey) hardware.
Now, of course, MACs are quite good, but back in the day their hardware was always screwing up for seemingly random reasons. It made a lot of people curse Apple to the ends of the Earth.
So, if you try this as a company, make sure your product doesn't suck.
Similar to the upcoming US election results
Jobs: "Been there, done that, got the 'buy us now before we go out of business' t-shirt."
The "other" business model was NEXTSTEP. They did what all the talking heads told them to do: give up proprietary hardware and go to the "vast" x86 market and sell the operating system, as OPENSTEP.
It was disasterous because they couldn't keep up with the vast array of weird PC hardware, the PC manufacturers had no desire to help them write drivers (and they barely do for the much larger Linux market) and there just wasn't remotely enough revenue to support continued OPENSTEP.
This, despite the fact that OPENSTEP was enormously better than the contemporary Windows---a larger gap certainly than MacOSX is from Windows XP.
I'd love to be able to use MacOSX on cheap hardware. But I also know it's not going to happen.
Jobs is also a genius because Apple took over a desperate and struggling company and he ended up taking over Apple.
Why is Apple still here and not dead dead dead?
Because of hardware: iMac
Why is Apple now thriving?
Because of hardware: iPod, Powerbooks.
NeXT was doing OK when they still had hardware.
How many times do Steve's nuts have to be zapped until he screams "KEEP THE HARDWARE STUPID!"
Besides, if they go as a real software operating system company they end up in the primary targeting computers of the Borg.
Apple can do pretty well decently competing against HP/Compaq, Sony, Samsung (pods), Creative, etc, and by staying somewhat out of Dell's target market of cheap generic Windows PCs. They know how to do that.
Apple has no experience and no ability to compete successfully against Microsoft, and nobody has ever survived where contracts to OEM PC makers are critical.
If you want to buy cheap software from Jobs, buy a Pixar DVD.
It's ironic that we keep hearing that Linux on the desktop won't take off until the average-joe can install it. And, now, someone is proposing that the same average-joe who can't install linux because it is too hard, is going to figure out how to hack and install OsX?
I don't think so, Tim.