The Tiger Report: Do You Really Want to Run Mac OS X on a Plain PC Box?
October 4th, 2006Over the years, some analysts have suggested that Apple made a grave mistake in not setting up a real cloning program early on, so other computers could run the Mac OS. If only the company had listened to Bill Gates and others, today Apple might really own the computer market, not just in mindshare, but marketshare as well.
It’s an intriguing thought, but one that is fraught with danger.
When Steve Jobs first announced that Apple would switch to Intel processors, and you and I were reminded that Mac OS was still destined to run only on Macs, some folks tried to change things. They managed to induce the Intel versions of Mac OS X to run on their regular PCs. But that was not a legally sanctioned remedy, and compatibility with peripherals and even many applications was not a sure thing.
Let’s forget the unofficial methods, and look at why Apple doesn’t want to open its operating system and sell it as a retail product that would run on any old PC that, perhaps, meets some basic hardware specs. You see, despite the hopes and dreams that the Mac OS would conquer the operating system world overnight, it would more than likely destroy Apple as a company.
No, this is no extremist posture, and I’m not an Apple apologist. I’m just trying to face reality. And the reality here is that widespread compatibility with third-party computers conflicts with the concept of a lean, mean operating system development machine.
Oh sure, Apple could get it to work reasonably well. They’d also have to expand their compatibility testing big time to account for untold numbers of PC configurations. Even if the list were restricted somewhat, that wouldn’t stop people from attempting and perhaps succeeding at unsupported installations, and you’d end up with chaos. Even Microsoft runs into trouble here from time to time, and it explains why a Mac “just works” most of the time and tends to suffer from fewer system hassles.
The biggest issue, however, is that such a maneuver would simply gut Mac sales, which is still where Apple earns great profits. Now I do not accept the alleged conventional wisdom that Macs are more expensive than PCs. The condition is, of course, that the Mac and the PC are equipped with essentially the same set of options. When you follow those requirements, the Mac can actually be cheaper. But let’s not waste time on that argument.
PC makers, however, sell millions and millions of stripped-down models. Apple won’t go there, simply because there’s little profit in it. Even the number one PC maker, Dell, seems to be retreating from promoting its cheapest products, and is emphasizing its higher-cost business services. Falling sales and profits have forced them to tout a Dell 2.0 program to revise the company’s focus and prospects.
But you can see that Apple’s hardware sales would likely be wrecked by predatory companies who will tout how you can run Mac OS X on a cheaper product. It doesn’t matter if it’s not an equivalent. It will simply take sales away from a real Mac.
Lest we forget, Apple tried an official cloning scheme in the last decade. Forgetting some ill-thought, and perhaps desperate, elements of the contract with third parties, the scheme nearly destroyed the company. No wonder that Steve Jobs killed the program. No it wasn’t done in a fit of rage, but to save Apple Computer.
Today, Apple has shown with the iPod and with the Mac that it succeeds best as an integrated company, one that provides the operating system, a lot of application software, and the hardware.
Sure, things are far from perfect. But it’s not necessarily true that Macs are less reliable these days. Yes, there have been problems, but even if the percentage of defective units is unchanged from what it was years ago, higher sales mean more computers will be impacted. Even a small number of complaints will, if published in the right troubleshooting-oriented sites, spread around the world in a matter of minutes.
Now maybe the day will arrive when Apple will decide to take the huge risk of sacrificing its hardware to really battle Microsoft in the operating system arena. But Microsoft will have to be truly suffering for that to have any real chance of success. The Apple you know and love will otherwise not survive an all-out war.
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Gene:
All of your arguments are on the money. And, Apple could never sell enough of its OS into the market to sustain itself. It would have to raise the price of the OS significntly. It would still not penetrate the enterprise market. The enterprise market is a Windows world and will remain so. The Mac OS would only add levels of complexity that most IT Mangers would not be interested in. The ecosystem revoles around Windows and Office. Not Enterprise IT person could re-invest in the knowledge base and the economics to make such a switch possible or plausible.
Don’t forget that if the installation security stayed the same – that is, none – Apple would sell about 12 copies of OSX for Intel. License the OS for generic use, and every single existing Apple customer would have to put up with byzantine serial number/registration/activation hassles for all of eternity.
While I agree with much of what Gene statesâ€â€with respect to the perils of selling to a broad spectrum of PC hardwareâ€â€I however can envision a third winning option. Apple could restrict the sale of 10.5.x to only machines with the newest Intel CPUs. In addition they could limit compatibility to a careful selection of the best PC manufacturers, say Sony, Toshiba and IBM/Lenovo. This would be like the state of affairs with cell phone iSync compatibility, where there is an official Apple webpage that clearly lists the supported hardware. Most of the sales would be to personal users who have had a simmering interest in the Mac, but there would be some corporate purchases as well by companies that see the potential upside of an OS X with true-blue UNIX underpinnings. The scarcity of virus/spyware mayhem in Mac OS X would also attract some corporate sales. This is what I might consider recommending if I were magically placed on Apple’s board.
Malcolm, basically you’re suggesting that Apple allow its competitors to sell Mac Clones that are very similiar in performance and quality to Apple’s own Macs. That doesn’t make any sense at all. That’s like arming your opponent with your best weapons.
These are the same tired old arguments that have been bantered about for longer than most anyone can remember. If they were ever true, a dubious proposition at best, they certainly are not true now.
Apple is buying essentially the same components as everyone else now. Either Apple’s hardware is able to compete in terms of design, features, and capabilities or it is not. The argument that Apple can not make money as an OS company is, perhaps, the most foolish and patently untrue arguments of all time. That is the same thing as saying that Microsoft can not make any money…LOL.
There are so many companies wanting to use OS X at the present time that it seems almost self evident that the real problem would be supplying the initial surge of demand.
Instead, it is submitted that Steve should keep selling fruit from a cart as a street vendor because of fear of growth.
Steve may not be around for long anyway if he is caught up in the stock options scandal. Then we will see how Apple does. One of the most important, if not the most important, duties of a CEO and Board of Diirectors is succession planning.
Can generating an income upwards of 130 dollars per machine (in high volume), as well as expanding your OS market and mind share, be reasonably construed as supporting your competitors?
Apple already sells you a license to run OSX on a PC – it’s called a MAC MINI. For $599, you get a compact computer that is powerful and by most side by side comparisons to other “mini” PC’s, the mini is about $10-$50 LESS so what more do you want? It comes with OSX, you can load XP. Plug in your monitor, keyboard & mouse and you are set. You even save $100 a year on virus/malware protection PLUS you get iLife – no equivilient available on the PC for THOUSANDS of dollars. You even get a store around the country that will answer all your support questions – as well it being small enough you cna carry it in! What more do you want?
PC Companies that are interested in Mac OS X are not interested in Mac OS X because it is “better” than Windows. Companies are interested in Mac OS X because it gives them a club to hit Microsoft with to get better Windows pricing. Microsoft makes money as an OS Company because they are the only game in town–they have no competition.
Once upon a time, I sat down with calculator in hand and some numbers from financial statements and I figured that Apple would need to sell about 4 times as many OS Licenses as machines in order to make the same money. This assumed that Apple could sell Mac OS X through PC Companies for $100. Malcolm’s dream that Apple could somehow get $130 per machine is priceless. Even Microsoft doesn’t get $130 per machine!
Suppose that happened. What’s the first thing Microsoft would do? Drop their price to $60 per license. Microsoft has a large supply of cash. I remember reading somewhere that if Microsoft didn’t sell anything, they could still run the company for 3 or 4 years just on the cash they have sitting around. They can afford to lower the price for Windows to $10 in order to drive Apple out of the business. And before you say, “Well, the courts would stop them!” the courts didn’t stop IBM from doing that time-and-time again back when mainframes ruled the earth. Hell, the Supreme Court even said it was okay (this was the same day that they broke up AT&T, so the news kinda got buried).
Never get involved in a land war in Asia and never get involved in a price war with Microsoft, I always say.
Plenty of good anti-licensing arguments made on this page. The short answer is no, it would be the dilution of a good experience into something horrendous. And similarly, stop selling in Circuit City/Best Buy. Doing business with retailers as sucky as these two gives you preview at what a licensed OSX world would be like. Apple would have more dignity running half hour infomercials about Macs and OSX, than selling through either outlet.
Malcolm said
The basis of this argument is that people who currently buy Sony or Toshiba computers with Windows would suddenly choose instead to buy one with MacOS X and that there are millions of such people waiting for the opportunity. I find that hard to believe. The first people to buy a Lenovo equipped with MacOS X would be current Apple customers. It was true the last time Apple allowed clones and it would happen again.
Let’s do some simple math.
Based on Apple’s Q3 2006 financial statements they sold 1.327M Macs for $1866M or an average price of $1406 per Mac. Gross Margins were 30% for all products including iPods so we can estimate a gross profit of $422 per Mac.
OEMs pay no more than 40% of retail for software, but let’s say Steve Jobs is able to extract 50% of retail from his OEM partners thus giving Apple an additional $65 per copy of OS X sold to Lenovo or Toshiba. Let’s consider this pure profit because it makes the math easier. In reality MacOS X development and support costs would skyrocket if Apple had to support even one additional manufacturer.
For every lost Mac hardware sale Apple would have to sell 6.5 copies of OS X to an OEM partner to break even on the exchange.
So if Apple decided to stop selling computers and take on Microsoft they’d have to ship over 34 million copies of OS X per year just to keep profits where they already are today.
The title of the article “Do You Really Want to Run Mac OS X on a Plain PC Box?” wasn’t answered in the article itself. While I agree with most of Gene’s opinions about licensing and with many of the comments here, the basic question of whether I WOULD WANT TO run OS X on a non-Apple PC was not addressed.
In my case, I would buy a copy of OS X for PC in a heartbeat, even at $500 or $600. Its not that I think I can save money with non-Apple hardware, but rather that Apple just doens’t make the hardware that I want to use. Even if I had to buy a new machine to get OS X that would be fine too, so long as it was from a vender I trust (IBM/Lenovo or Toshiba, perhaps), and was offered in the market niches that Apple chooses to ignore. I’m not talking about the $200 desktops, but high-end, ultraportable laptops.
My current portable is an IBM/Lenovo ThinkPad X41, it weighs 2.7lbs with its small 3-hour battery, or 3.2lbs with the large 6-hour battery. At 4lbs I can set it up with an extended battery for a total of 9 hours from a single package smaller and lighter than the old 12″ PowerBook. Apple’s closest product is the MacBook at 5.2lbs and 3.5 hours of use (Apple’s claims of 6 hours are way off, my X41 runtimes are what I actually see in real world use). The MacBook is a nice machine, but after three replacements I won’t trust another one, and even if I did, its still far larger and heavier than I prefer in a laptop. If I could buy an X-series ThinkPad with OS X I would, or a Toshiba Portege or SOny Vaio superslim. What about Tablet PCs? Apple doesn’t make one, but OS X could easily accomodate the technology, which in some machines is the same Wacom driver used on their graphics tablets that have supported Macs for years and work great in OS X. Toshiba makes a terrific Tablet PC, and would be even better with OS X working on it.
As for the shadier unauthorized methods, I tried my best to get it working on my ThinkPad. THe closest I’ve been is working display and even sleep function, but no wireless despite using an Atheros wireless card that is identical to many of Apple’s own Airport Extreme chipsets. I’ve tried other installers that gave me wireless but poor video and no sleep function. When someone figures out an installer that just works on my ThinkPad I’ll use it, and I won’t feel bad because I own a retail copy of Tiger for my Power Mac, and I can just downgrade that machine to Panther, for which I also have a license.
Of course for me the easiest thing would be for Apple to introduce an ultraportable. The 12″ PowerBook was close enough that I tollerated the extra weight, but those are gone and no replacement is in sight.
All of Gene’s arguments (and those made by most of you in this discussion) are true and valid — unless government and business had such a collapse of confidence in Microsoft’s ability to provide a reasonable level of security that they felt compelled to look elsewhere for an OS. Apple would be the only viable alternative. Malcome writes “So if Apple decided to stop selling computers and take on Microsoft they’d have to ship over 34 million copies of OS X per year just to keep profits where they already are today” I have no idea if this figure is correct, but let’s assume it is. What would happen if Apple became convinced that it could ship OSX at this level or higher?
I just don’t quite get those fine Mac-users above who have such a negative view of selectively selling OS X retail boxes to PC hardware owners.
David wrote:
Why do you think I meant windows users would initially buy non-Apple machines with OS X instead of Windows? That is not what I was getting at. I meant the Windows machines would sell as they do nowâ€â€with Windows on-board, and interested users could opt to buy a retail OS X Leopard box with a boot-camp-like capability (or a Parallels analog). Even if only 5 to 10 percent of Windows users opted to have the OS X option it would be a huge market. It would simply be gravy-like additional sales of software, which could simultaineously increase the OS X mind-share, which from my point of view is key.
Of course this discussion has been had over and over again over the years. I still think that on balance that Apple would be better off selling OSX for X86 as a stand alone product. Here’s why:
1) Apple, LOVE them, but they are always trapped in small market share numbers. Look at the success of the iPod after it supported Windows. Apple revenue went thru the roof. The numbers of machines in the rest of the PC world are so HUGE that relatively lean and mean Apple makes a quantum leap in revenues any time they can touch the PC world. Don’t think about profit per box, think about a market 25-33X larger, assuming Apple is 3-4% of the market. Even if Apple sells a $150 box to a small percent of tire kickers, its still huge numbers for them compared to existing sales.
2) Apple hardware would not be hurt that much. If you look at the Apple product line, each product is a standout in terms of design and features. They do compete very well with a higher end product from another company. People who buy Macs today are interested in the total experience. They will continue to do so. And note that Apple does not have a desktop product that directly would compete with a white-box PC, The Mac Pro is really a workstation and the mini, is ultra small. The white-box PC user is buying a different kind of machine.
3) A shrink wrap OSX lets Apple enter markets they can’t today. I am thinking Enterprise and China. Ok, the chinese will have it sold on every corner for $2. But that might actually be a good thing given Linux and Windows market-share. Apple has no presence in China – and it is a very important market. Apple should put OSX in a box to get out of the market-share box. Enterprises might pick Apple once in a while and those are huge sales. But they have all these PC’s that they are not going to throw away…
4) Another big win for Apple is in sales of additional services, dotMac. ProCare for example and there is a potential upside of switchers eventually making an Apple hardware purchase at some point. Maybe you use OSX on a PC at work. An iMac at home. Shop at the Apple store and no worries on compatibility or consistency.
5) OSX as a platform and its developers would certainly benefit, and that includes Apple itself in terms of the Pro apps, iWork and iLife. That is a big upside for Apple.
I think people who worry about the hardware sales in isolation are not seeing the bigger picture.
Now a Parallels-like solution for running OS X on a PC would be a win-win in all ways. Apple can control the hardware spec because most of the hardware is emulated, while PC users can get a taste of OS X or run that Mac application on their Windows systems that they can’t otherwise. I’d do it just for Apple Remote Desktop.
Well stated david.
What you seem to be saying is largely in sync with my posts above, and your commentary expands and elaborates nicely on this perspective. This is a realistic strategy for Apple to substantially increase the marketshare, and more significantly the mindshare, of OS X.
Apple is winning all out war. People are running Windows and OS X side-by-side on Intel Macs.
Windows is dead.
People are applying supply-side solutions to demand side problems.
Just because you increase the amount supplied doesn’t mean that suddenly more people will want to buy it. The assumption that OS-X will fly off the shelves if only Apple licensed it to other manufacturers is pretty dubious. Licensing OS-X is a supply-enhancing measure. Increasing Apple’s market share is a demand-side problem.
I mean, who are these PC-toting people who will suddenly switch to OS-X just because Apple makes it available in high end (i.e. Apple-level quality) PCs? If these users want OS-X in a high-end PC, then they should be buying Macs right now.
There is no magic bullet for increasing Apple’s market share. It can be done but it will not happen overnight. They will have to fight tooth and nail for every point of market share gained. It’s not going to be like the iPod where domination came in less than 5 years. Think more like Toyota’s and Honda’s assault on the Big 3. It’s a generational struggle where you target the young; convert them to your brand and hope that when they get older and wealthier you can sell them more expensive product.
To answer Gene’s question as a user yes I would gladly buy OS X to run on my PC. I’ve always been annoyed that I have to buy another computer to run Apple software. But tundraboy makes the critical point. If Apple isn’t grabbing big market share now with their competitively priced systems, then why should we suppose there would be a big demand for OS X in a Dell? Still, there are a lot of valid reasons presented above on why it might be a huge success if only the conditions were right.
Who knows, perhaps if Apple were to box OS X it would be like a perfect storm – like what is about to happen in our congressional elections.
The problem isn’t pricing, its that Apple doesn’t compete in every market. I’ll say it again, where is the Apple ultraportable? Where is the Apple tablet? Those are just two examples where I can buy excellent PC hardware right now, but cannot buy an Apple equivalent. I have a 2.7lb ultraportable and would love to run OS X on it. APple’s answer is to buy a 5.2lb MacBook instead.
Andrew, IMHO you are right, and this is just one of the many reasons why Apple should sell shrink-wrapped OS X boxes to a limited spectrum of non-Apple PCs.
Part of that supply and demand equilibrium relates to costs, specifically switching costs. If a user can experience OSX for sub $200 that is compelling. People want to try something different, but they might not be ready to buy a MacBook or even a mini. They could however forgive a software purchase to see what the other-side is doing. And they might in a moment of frustration with viruses and such, move to mac on a secondary machine, start using iLife, These are the kind of experiences that create demand over time.
I really think the vast majority of people who buy macs today want the total experience, most people don’t want to ever install an OS of any kind. My friend just replaced his Dell with a newer Dell rather than rebuild the OS. This to me is the mainstream computer user.
I also know someone who bought a PC and now regrets not getting a mac. buying a box from apple feels better than calling that PC a total loss or putting it on eBay. For these sort of people OSX could be an easy conversion.
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In most cases, however, I think the shrinkwrap OSX is for hobbiests, enterprises and people, mostly illegally, in developing markets who can’t afford macs anyway.
I didn’t read all of the follow up comments – but I would suspect that like Apple’s model with iTunes/iPod where they don’t profit too much from sales at the iTunes store – but it is used as a supplement for selling iPods_ So they probably work it very similar as they see profit from the sales of their Computers and use their operating system to supplement it_
I would switch over in a heartbeat. I would switch my entire corporation over to Mac OS if I could. I can’t afford to buy all new machines, but I could afford to spend 100-200 on each PC. I am sick and tired of the craptection system of M$. I am sick of the BSOD’s and the exorbitant upgrade fees for the next OS from M$ that is bloated beyond belief. Vista is a nightmare. Craptection makes a small hardware upgrade or OS re-installation due to a crashtacular OS a nightmare. I desperately want to get off the Microsoft trail of tears. I would at least like the option of a realistic choice. Not to spank Microsoft–I don’t intrinsically have anything against microsoft’s XP os, it does some things very well–except of late they are acting too big for their britches and treating their customers like we exist to fulfill their needs instead of the other way around—WE ARE THE CUSTOMERS DAMMIT.
I don’t like to be automatically considered a thief when every single dell PC we own came with an OS key. Yes, I would switch. I would switch to Linux but there is no “single” distribution that I can count on. Somebody needs to OWN the OS. Someone that is the authority. Linux is too frangible–too wild west–to nihilist. But Mac OS has an “authority”–Apple. There would be one entity I could turn to for advice, support, training, etc.
I like the Mac machines, but they are not the hardware I would want to use. We manufacture automation/robots and machines that at an HMI level need to run an OS that is easy for our customers to use. We pick XP embedded because the customers are familiar with the look and feel and it is relatively easy to install on various and sundry industrial type boxes (and they work very well when we disable the normal “desktop” and prevent the users from changing anything–but God help you if you need to reinstall the OS, the Administrative hoops you have to jump through–the ethernet connection to reactivate—the phone holds wating to get a new key when that doesn’t work right). I can’t get that from Apple. There hardware is like works of art–not something that would sit well in an industrial environment.
Oh yes, I would switch. I would train my customers to use the Mac OS. They could find 3rd party books and training as well. I think they would accept it. They already accept some of my XP boxes running my own shell and a touchscreen–in those HMI situations—they wouldn’t even know.
I have considered using Linux in that situation, but which distribution–unbuntu–roll my own—etc. Maybe Jobs will have a stroke and somebody at apple could then fulfill my wishes.