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."

Comments

Worked for ...

[SirSlud]

Worked for MS :) /flame on

Re:Worked for ...

[rovingeyes]

Whoever modded the parent as flamebait is a moron. AFAIK, piracy is probably the best form of advertisement. Let me give you an example. Back in college, my roommate used to visit every goddamn warez site he could find. He downloaded all the softwares and tried them. Didn't matter if he needed it or not. Now he is a consultant where in his job is to suggest which apps to use for a job. Guess what, some of the weird obscure apps found their way to profitability because of this guy.

Now I am not saying that piracy will definitely lead to sucess or will create a career for you like my friend. But my guess is there are lots of guys sitting in their dorm with fat internet pipes just downloading stuff. To me that is advertisement. And besides you don't lose any money there as these guys will never buy the software in the first place but businesses do.

Apple is a Hardware Company

[jonoid]

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.

Re:Apple is a Hardware Company

[dmayle]

Remember back in 1997, when Apple almost died? Steve Jobs had to kill the clones because Apple could not compete with the cheap hardware

People talk about the Jobs reality distortion field, but I've never seen it more in effect than with regards to the "clone wars".

Apple has a product Y that requires widget X to run. In this example, product Y is the computer, and widget X is the operating system. If every competitor making product Y has to buy widget X from you, than you control the competition. If your competition is squeezing you out of the market for product Y, you are either not charging enough for widget X, or you are charging too much for product Y. Plain and simple.

You don't need an advanced math degree to see this. What was killing Apple was not the clones, but the poor management. Jobs came back, but he didn't have to kill the clones to keep Apple afloat. He had to kill the clones to make sure Apple remained a hardware company. And, since Jobs likes the control, he killed the clones.

I think, however, that Steve has grown over the years. Now that he's got more experience under the belt, he's got the perspective of age, and I think he's learned how to manage a multi-billion dollar company. He likes to be agile, and he's doing what is necessary to make sure Apple is. He's taken the hardware division, and made sure that it's not dependant on one type of product (adding iPods). If the market for computers tanks, or at least, the market for Apple computers tanks, the hardware division has a place to go.

At the same time, he's making the software division capable of surviving without the hardware division. If the hardware division goes belly up, the software division is no longer reliant on it to sell product. They can easily adapt OS X to commodity hardware and give it a shot that way.

Finally, Steve has created a web services division. For the moment it only makes money off the distribution of music, but the huge showcase of movie trailers should show that the plan is there for movie distribution as well.

Oh, and one thing I almost forgot to mention, iLife. I used to wonder who was going to be first to the subscription based model of OS sales, and I thought it would be Apple (with .mac). I mean, look how the updates are coming more frequently. But then I realized that Apple has no need. With iLife, they get to have their cake and eat it to. Users pay each time there is an upgrade, and they pay the subscription fee as well. Steve Job's success has nothing to do with a calligraphy class, or dropping out of college. It has to do with the fact that he is a marketing genius.

Re:Intel CPU != PC

[mr_gerbik]

"Also Apple is at heart a hardware company."

Wrong. From the lips of Steve Jobs himself: "The heart of Apple is OSX."

How can you call Apple a hardware company? Because they put everything in a well designed box? All the components are 3rd party... Apple doesn't make processors, Apple doesn't make memory, Apple doesn't make harddrives or video cards or sound cards. They buy them from hardware companies, put them in a shiny box and then run *their software* on it.

Re:Intel CPU != PC

[squiggleslash]

The way the developer boxes are currently looking, together with the way existing Apple Macs are designed (PCI, USB, et al), suggests to me that we're looking at something that will be a PC from Apple in less than a year. There will be differences between a Dell device and an Apple device, much as there is between Dell and Gateway.

My guess, if I had to put money on it, would be:

- It'll be "legacy free", that is, no PS/2 or serial ports. It will have USB High Speed, IDE, and maybe Firewire, just like their current line up.

- They'll do several single board machines without PCI, similar to the motherboard in a PC laptop in hardware spec.

- The architecture will essentially be that of a PC clone. This'll ensure they can use off-the-shelf components for lower cost machines.

- They'll probably use EFI instead of BIOS.

For reasons why, see the JE linked to in my .sig.

There are a lot of comments that have come out of Apple, together with actual actions, that demonstrate where this is heading. If they wanted to produce a non-standard machine that just happened to have an Intel CPU in it, they wouldn't be making a lot of the decisions they're making. There'd be no reason to abandon Open Firmware. There'd be no reason to change the disk partition format. There'd be comments from Apple to the effect Windows is unlikely to run. What you'll have in a year will be a machine that may well run many industry standard PC operating systems out of the box.

Apple _is_ profitable!

[Trurl's Machine]

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?

I don't think so..

[Mean_Nishka]

And I also don't think we'll even see a 'leaked' development version in the wild anytime soon. Apple is distributing the dev kit installed on hardware and not on CD. I would venture to guess they are doing that for a reason.

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.

Re:Brainstorm1!!!

[Marillion]

That's the difference between a System and a Runtime Environment. The bundled software is the added value that OS X has over anything else like Debian, Fedora, ***BSD. 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.

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.

10.4 Could Be a Bad Try-Before-You-Buy Experience

[Shuh]

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.

Re:Brainstorm1!!!

[VarmintCong]

Funny - Don't they call that "anticompetitive behavior" when Microsoft does it?

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 was one of those BeOS downloaders

[SethJohnson]

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

Re:But why miss the opportunity?

[Foobar of Borg]

Increased mindshare doesn't always work, though. I remember in college, Apple was donating computers to some universities. I cursed about having to use them in physics and engineering labs as a student, and then heard a lot of my students cursing about having to use them when I was a TA.

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.