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Mac Clone Maker Psystar Files For Bankruptcy
Posted by
kdawson
on Tue May 26, 2009 03:35 PM
from the taking-the-pressure-off dept.
from the taking-the-pressure-off dept.
StikyPad was one of several readers letting us know that Psystar has filed for Chapter 11 bankruptcy protection. We've discussed the Mac clone maker's battles with Apple extensively. The company apparently has over $250,000US in debt, and states that it cannot turn a profit in the current economy. "The Chapter 11 filing will temporarily suspend Apple's copyright infringement suit against Psystar, which is currently before the US District Court of Northern California. But once the bankruptcy protection is sorted out, the copyright case will resume." And PC Mag is reporting that, on the other side of the Atlantic, two new clone companies are just getting started. Like PsyStar, FreedomPC and RussianMac promise to deliver PCs with OS X preloaded.
Related Stories
[+]
Apple: First Psystar Mac Clones Ship 466 comments
An anonymous reader writes "According to Gizmodo, Psystar has begun shipping its Macintosh clones, thus proving that the company is not a hoax. Initial impressions seem to be positive, though Software Update does not work."
[+]
Apple Files Suit Against Psystar 805 comments
Reader The other A.N. Other, among others, alerts us to the news that Apple has filed suit against Psystar, the unauthorized clonemaker. (We've been discussing Psystar from the start.) The suit alleges violation of Apple's shrink wrap license and trademarks, and also copyright infringement. News of the lawsuit, filed on July 3, first surfaced on a legal blog. There's speculation that the case has been sealed.
[+]
Psystar Antitrust Claim Against Apple Dismissed 256 comments
CNet has a report that a federal judge has dismissed Psystar's antitrust suit against Apple. Observers had said that the counter-suit embodied the Mac clone-maker's best chance of prevailing and staying in business. We've been following Psystar and the dueling lawsuits since the beginning.
[+]
Apple: Psystar Wins a Round Against Apple 660 comments
Daengbo writes "'A federal judge last week ruled that Psystar Corp. can continue its countersuit against Apple Inc., giving the Mac clone maker a rare win in its seven-month-old battle with Apple.
He also hinted that if Psystar proves its allegations, others may then be free to sell computers with Mac OS X already installed.'
Apple is currently suing Psystar over its sale of Mac clones."
[+]
Hardware: New Mac Clone Maker 'Quo' To Open Retail Store 296 comments
bughunter writes "Cnet is reporting that Mac clone maker Quo Computer plans to open its first retail location, selling Mac clones, on June 1st. To start, Quo will offer three desktop systems: the Life Q, Pro Q, and Max Q. While details of the components are not yet available, founder Rashantha De Silva said they are looking at Apple's system configurations for guidance. Pricing has also not been finalized on the desktop machines, but the company is looking to start pricing at less than $900. While Quo is starting off with the desktop machines, De Silva said it is looking at offering an Apple TV-like media server and a smaller computer similar to the Mac Mini. He acknowledges that Quo will likely face opposition from Apple, much like Psystar. 'They probably will (sue us),' De Silva said. 'There are others doing this, but we have a different attitude. There are thousands of people in the "Hackintosh" market, but many of them are creating bad products. I don't think anyone wins in that environment.'"
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Sorry guys, but... (Score:5, Funny)
Windows just isn't ready for the desktop yet. It may be ready for the coasters that you nerds use to sit your colas on, but the average computer user isn't going to spend hours in the dos cli configuring irq numbers and io addresses, dealing with constant crashes and manually installing networking support just so they can get a workable graphic interface to check their mail with, especially not when they already have a free alternative that works perfectly well and is backed by major corporations like Redhat and Canonical, as opposed to Windows which is only supported by Microsoft. The last thing I want is a chair-flinging gorilla (haha) providing me my OS.
Re:Sorry guys, but... (Score:5, Funny)
get a workable graphic interface to check their mail with
Okay, you get on that pronto. I'll create a GUI interface using Visual Basic ... see if I can track an IP address.
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Re:Sorry guys, but... (Score:4, Funny)
Okay, you get on that pronto. I'll create a GUI interface using Visual Basic ... see if I can track an IP address.
Actually that made me smile... FYI: source [youtube.com]
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Re: (Score:3, Informative)
CAUTION! OP contains a GOATSE Link!
CAUTION! OP contains a GOATSE Link!
CAUTION! OP contains a GOATSE Link!
Re:Sorry guys, but... (Score:4, Funny)
Don't click that link!
It's a screenshot of Emacs!
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$250 K ? Must be a typo (Score:5, Insightful)
The company apparently has over $250,000US in debt.
That must be a typo - could they mean $ 250 million USD ? Most companies would not
choke on $ 250,000 worth of debt.
Re:$250 K ? Must be a typo (Score:5, Insightful)
That must be a typo - could they mean $ 250 million USD ?
It's not a typo.
Most companies would not choke on $ 250,000 worth of debt.
Most large corporations might not choke on that much debt, but they don't constitute most businesses. Considering that Psystar probably has little to no revenue coming in and no real future it's not surprising that they will just cut their losses without taking on more debt.
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Re:$250 K ? Must be a typo (Score:4, Informative)
What kind of an idiot CEO decides with a very small company and almost no capital, to lock horns with one of the largest companies out their with a very. . . let's say 'speculative' business proposition at best? I suppose, maybe, if you're going to test the waters, perhaps doing it as a small company with no assets might actually be very cunning, because if you lose, Apple really isn't able to take anything. . .but at the same time, without sufficient funds, there's little chance you can survive the legal battles you first have to face in order to try to attain a ruling from the Courts that your business doesn't actually infringe their copyrights.
(I mean, if I pay Apple for Mac OS X, in order to put it on a different computer, I fail to see how that has infringed their *COPY* rights - the copy is legal; they shouldn't have any say in what I do with that copy or what hardware I run it on, once the copy is licensed, but. . . it was obvious Apple would try to stop them with a lawsuit, and they'd have to fight the total GARBAGE law known as the DMCA,, before they could ever get to the point of, hopefully, getting a ruling that they weren't infringing).
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Re:$250 K ? Must be a typo (Score:4, Insightful)
If you're blowing through venture capital (i.e. not your own money.) the entire time, why not take on as many lawsuits as possible and ride the gravy train for as long as you can continue to do so? Hell, give yourself a nice bonus for being so brave as to challenge such a large and established corporation. After all, if you're successful, think of all the money that you'll be able to pull in with your new (and booming) business that can't be touched*.
I don't know if that's the case, but there are some [wikipedia.org] good examples of where this has happened.
* Or so they would like to think. [slashdot.org] 99BottlesOfBeerInMyF presents a reasonable argument as to why they were screwed even if they won.
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Re:$250 K ? Must be a typo (Score:5, Interesting)
Unless they wanted to choke... as stated earlier, an important side-effect of bankruptcy is the disruption of all outstanding litigation... Maybe Apple was getting too close to finding the money behind PsyStar?
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Mod Parent Interesting (Score:5, Insightful)
This is a point worth considering. A similarly important point, where is the money coming from for the non-U.S.clones?
The most simple explanation is $250,000 in debt happens very quickly once the lawyers bills start hitting the books
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Re:$250 K ? Must be a typo (Score:4, Informative)
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Re:$250 K ? Must be a typo (Score:5, Interesting)
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Re: (Score:3, Insightful)
250K in debt, assets frozen, and sales blocked by court order, how does a bank expect them to pay? ...and who would invest in a company about to be ass raped by Apple lawyers?
Re: (Score:3, Insightful)
The same people who would invest in a company about to be ass raped by IBM's lawyers?
Re:$250 K ? Must be a typo (Score:4, Insightful)
From a purely non-techy viewpoint, the arguments are a lot less clear and can be spun a myriad of ways in the SCO v. Linux debacle.
However, the Apple v. Psystar is much more clear-cut. It also helps that Apple themselves defined much of the legal territory they are going to depend upon down the road when they sued Franklin Computer et. al. back in the Apple ][ clone days.
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Re: (Score:3, Funny)
The makers of Preparation-H. And the makers of icepacks and those weird donuts pregnant people sit on due to "flare-ups".
Got to support demand for your products somehow.
On a related note, did you know that prep-H is great for removing dark circles under the eyes after a late night of WoW? (Protip for a subset of slashdotters)
Re:$250 K ? Must be a typo (Score:5, Funny)
On a related note, did you know that prep-H is great for removing dark circles under the eyes after a late night of WoW? (Protip for a subset of slashdotters)
You mean the subset that are concerned about their appearance?
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Re:$250 K ? Must be a typo (Score:4, Insightful)
Well it depends, doesn't it? Even if they only have $5K in debt, but have practically no income, can't get credit, and have no assets to speak of, then they're bound to go belly-up sooner or later. It's really a question of when the bank turns off the credit, and this credit crunch isn't really over.
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If I owe a bank $250 K, I have a problem . . . (Score:5, Insightful)
. . . if I owe a bank $250 million, the bank has a problem.
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Re:If I owe a bank $250 K, I have a problem . . . (Score:5, Funny)
. . . if I owe a bank $250 million, the chinese have a problem.
Fixed that for ya.
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Re:If I owe a bank $250 K, I have a problem . . . (Score:4, Funny)
. . . if I owe a bank $250 billion, the federal reserve has a problem, and my bank executives get $25 billion in bonuses.
Another variant.
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Why? (Score:5, Insightful)
If you want OS X that bad why not just buy a Mac?
Re:Why? (Score:5, Insightful)
Depends on how unsupported it is.
Macs use commercial hardware like everyone else does. They aren't so customized in every detail that they are in all ways incompatible. That was one of the reasons for coming to x86 and the PCI motherboard. Better support options.
As long as the hardware has been vetted for Mac, it doesn't have come from Mac.
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because OSX is good, Apple hardware not so much (Score:3, Insightful)
Basically it boils down to this (As a prepare to build my hackintosh, parts in the mail),
I can get a great tower computer with lots of expandability for $1100 (Includes the cost of the OS). To get an equally expandable tower from apple (with room for more than 1 hard drive) would cost me $2500. The larger and growing larger hole in the mac lineup is the tower. as an apple investor I find it inexcusable.
For me its this or a windows box, both have the tools for my photography and programming.
.
Re:because OSX is good, Apple hardware not so much (Score:5, Interesting)
I'm an Apple investor too, and I'm not so appalled.
The differences between, say, the iMac and Mac Pro:
1. > 4GB of RAM
2. > 2 CPU cores, and they're faster
3. PCIe slots
4. 4 internal hard drives
5. Up to 2 internal optical drives
Now, I'm sure this is going to be controversial, but I'll pose the question anyway:
What would you really want to use those PCIe slots for that you couldn't find reasonably equivalent functionality via USB or Firewire? Bonus points if there are mac drivers available.
If the answer includes Gigabit Ethernet (note that we'd be talking about a *second* GigE port, since the iMac comes with one), Fiber Channel or RAID, then doesn't that imply that you'd be better served by either the Mac Pro or an XServe anyway?
What else is on the list?
SCSI? Really?
Fusion powered 3d graphics card? Are gamers really clambering to run awesome 3D games under OS X?
TV tuners and video capture? There are plenty of those for USB, FW or Ethernet.
What I'm saying is that the "mid tower" you describe *likely* doesn't differ significantly from the iMac except for not having a built-in display, those PCIe slots and extra optical and internal drive bays - and in the case of the optical and/or hard drive bays, FW800 is an alternative. And I am honestly struggling to think of why those PCIe slots are missed.
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Re:because OSX is good, Apple hardware not so much (Score:5, Insightful)
I can certainly understand that you want an expandable machine, and want to run OS X, and want it to be under $1500 -- those are pretty reasonable desires from a power-user computer owner. But I'm not sure you outrage is justified as an investor -- Apple seems to be doing pretty well selling non-expandable machines in the mid-range, and they have been for years. If Apple was primarily in the market for budget-oriented power-users it would be silly to not offer a cheaper tower, but they're not, and it's probably not a great business strategy for them to try; there's a very real chance it would hurt their sales and confuse their marketing in the other, well-established, successful market segments where the currently operate.
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Re:Why? (Score:5, Insightful)
It never ceases to amaze me that so many people (and so many of them are Apple fans!) think that Mac OS is an unportable piece of shit. It isn't.
When it comes to device independence, Mac OS (both classic and X) is right up there with Linux and *BSD. Sure, all the device drivers haven't actually been written but it's pretty damn clear that most of Mac OS functionality has been separated from the drivers.
Back in the 90s I ran Mac OS 7.x as a task on my Amiga, and it wasn't unstable at all. A Mac emulator was pretty much really just a collection of virtual drivers (drivers from MacOS' point of view, and OS calls from AmigaOS's point of view). It not only worked, but it worked well.
And the existence of modern x86 Hackintoshes shows that Apple didn't somehow get incredibly inept and start hard-coding specific Mac-hardware-du-juor dependence when they made OS X. Just how incompetent do people think Apple's programmers are? Do you think they're going to tell Steve, "no, you can't release any new Mac models, because we didn't make the OS portable enough that we can get it running on your new toy by writing a few drivers"?!
Give it a rest on the stupid, inane, and naive comments that hardware diversity is somehow related to OSes being flaky or broken. That's not how any of today's OSes work (even That One Exception (you know who) can't legitimately blame their flakiness on hardware diversity).
If anything, I've found that the more general you make things, the better they tend to work. And that's not some great insight; it's something everyone knows, including Mac OS X's developers.
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Desperate Times (Score:5, Funny)
Clearly they only have one chance left to survive. They must clone Steve Jobs!
And now litigation stops w/Apple (Score:5, Insightful)
Until out of chapter 11.
Re:And now litigation stops w/Apple (Score:4, Interesting)
actually, the bankruptcy filing will releav exactly who is funding them. In the pending court case, the investors could be protected, but in SEC investigations, and in bank records that are required to be made public durring a bankruptcy, this has to come to light.
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Re: (Score:3, Funny)
The question is: how come (Score:5, Interesting)
That is the biggest question. They couldn't undercut Apple in the market segment which could mean that Apple's are well priced for what they have to offer? Too little people interested in non-Apple Mac products which could mean that they didn't offer the same service as Apple does or their products were of lower quality? Or did their management just drink all profits that should've been used to expand the company and pay for in-house lawyers?
Re:The question is: how come (Score:5, Interesting)
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Re:The question is: how come (Score:5, Informative)
Don't you actually have to sell something to make a profit? Has anyone actual obtained proof that Psystar actually shipped any products?
They shipped. What sort of proof do you want? The relevant forums are full of people who received them talking about them. Then there are the blogs of people who got them. The news coverage. The review sites... pretty much all confirm they were shipping (until the court ordered to stop).
I mean, at this stage, asking for proof psystar actually shipped any products is on par with asking for proof Alienware ever shipped anything before being bought out by dell.
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Mac clone companies (Score:3, Interesting)
Mac clone companies will never make it. Macs are over priced, but people pay that premium because they want an Apple product. Apple and it's products are in line with the Fashion industry. They are stylish to have.
To have a clone Mac is like someone buying a watch (or hand bag) off the street vendors in New York, except you don't even get the Mac logo that tells everyone how cool you are because you own a Mac. :D
Re: (Score:3, Informative)
Macs are over priced, but people pay that premium because they want an Apple product.
Or, they just want to use OS X and have barely any other legal option.
Re:Mac clone companies (Score:4, Insightful)
Mac clone companies will never make it. Macs are over priced, but people pay that premium because they want an Apple product.
You must have missed the clone companies in the 1990s.......they were eating Apple's lunch.
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Re: (Score:3, Informative)
Re:Mac clone companies (Score:5, Insightful)
"Macs are over priced, but people pay that premium because they want an Apple product."
Your statement seems to contradict itself. If something were overpriced then it would cost more than the market would pay for it, slowly leading to the demise of the manufacturer. But as you note, Apple products seem sell reasonably well, even at a perceived price premium. That would lead me to conclude that, from a market perspective, their products are not truly overpriced.
If a company offers a product that the market percieves as superior, people will pay more for it. This applies to everything from dairy products to automobiles to consumer electronics. The fact that Apple is able to sell products for a reasonable profit isn't really much of an argument against them or their products.
Now if you'll excuse me, I'm going to drive my over-priced Honda home and watch my trendy, over-priced and fashionable Sony HDTV. (no, not really)
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Nothing of value was lost... (Score:5, Interesting)
You can build a Hackintosh yourself. Bootloaders and such are out there - you can run Leopard on a regular PC, as long as you are careful to only use supported components. Amazingly enough, Apple has been remarkably nonchalant about this. So why do they have such a big problem with Psystar?
Running OSX on a white-box PC takes technical know-how and a willingness to put up with some level of brokenness. This is the polar opposite of 99.9% of Mac buyers, who want their computer to just work - that's why they bought a Mac in the first place. So Hackintoshes do not meaningfully decrease Mac sales - indeed, they might even (very) slightly increase Mac sales because they get people invested in the Mac ecosystem. (Once you've wrangled with getting OSX to run on your white-box PC, only to have to do it again for the next point update, the convenience of a real Mac starts looking like a pretty darn good upgrade.)
The problem with Psystar is that they were promising to make their white-box Mac clones easy to maintain, thus destroying the selling point of a real Mac.
Re: (Score:3, Insightful)
It will be interesting to see if the Microsoft, etc. conspiracy rumors around Psystar are validated.
Why would Microsoft be funding Psystar? How would weakening the effectiveness of software EULAs help Microsoft?
Re:Now,now, nothing to see here move along. (Score:5, Insightful)
PC assembly is a fairly low margin business; but there are plenty of companies, large and small, that make a living at it. Psystar had the advantage of massive word-of-mouth and R&D done for them by the hackintosh enthusiasts. Were it not for the legal trouble, I would assume that (barring specific incompetence) they could have carried on for a fair while.
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Re:Now,now, nothing to see here move along. (Score:5, Insightful)
I dunno. The "Apple suing them in the face" problem was a pretty serious one, and is probably what did them in in the end; but their business model is by no means a certain failure.
I don't understand this opinion. So let's say in the best case, most realistic scenario Pystar and these other companies get the relevant provisions of Apple's OS X licensing declared unenforceable and they are removed from the license. They are now in the business of competing with Apple to sell hardware, while having to buy the OS from Apple. If they become moderately successful, what is there to stop Apple from no longer selling boxed copies of their OS and thus killing them?
Seriously. Selling boxed copies of OS X is a small part of Apple's business. They could switch to online distribution for upgrades and use DRM to prevent them from installing. End result, Pystar and their ilk die and Apple's customers are inconvenienced with DRM. Gee, thanks guys.
Or, Apple could go a more drastic route. They could simply ditch selling new versions of OS X and provide them free of charge to all Mac owners. It would barely dent their profits and lower their support and development costs considerably. Or they could take a middle road and sell a yearly service like their ".mac" service and include in that service upgrades to the OS and network services like e-mail, but provide no other upgrade path for individual licensors. Either way Pystar dies and Apple moves on without worrying about being undercut.
The way I see it, if Pystar and the like succeed, all they do is drive Apple to change policy enough to kill them. Any business model built upon being successful but not too successful lest the company you rely entirely upon kill you, is a doomed business model.
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Re:Now,now, nothing to see here move along. (Score:4, Informative)
Or Apple could take advantage of the TPM chip that's been present in Macs since almost immediately after they moved to the x86 platform.
As I understand it they stopped including a TPM chip after a short time citing cost and lack of interest from developers. A quick Google search finds this: Tom's Hardware Article [tomshardware.com] provide a source for such a claim (end of the first paragraph). Another response to your post claims Apple uses TPM to lock down OS X, but I've never heard any knowledgeable source make such a claim. Here's a detailed article [osxbook.com] explaining about Apple's use of TPM as a tool for cryptography and how it has never been used as DRM on OS X.
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Re:Now,now, nothing to see here move along. (Score:4, Informative)
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Re:Now,now, nothing to see here move along. (Score:5, Insightful)
Apple would be violating anti-trust laws by not selling their operating system & upgrades separately, period.
I have two comments here. First, to be violating antitrust laws Apple would have to have a monopoly in one of the relevant markets. I suspect you know very little about antitrust laws, but on the off chance you are not clueless, what market do you think it is that Apple has monopolized? Second, writing the word "period" followed by the punctuation mark "." is redundant. I understand in speaking using this technique but it does not apply in written communication. Please stop it.
Psystar's case was legally winnable, but they didn't have the backers for winning in court.
Do you know what Pystar's case was about? Even if it was winnable, my post explains why it doesn't matter.
It might fair better for European clone makers since anti-trust laws will be enforced more correctly against non-European companies, i.e. Apple.
The EU antitrust laws are about the same as ours and I still don't see the monopoly you are predicating such action upon. Further, you specify non-European companies as though that makes a difference, which anyone with a clue knows is irrelevant. Please do a little research and see the hundreds of European companies the commission has taken action against before making such slanderously uninformed claims.
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Re:Now,now, nothing to see here move along. (Score:4, Insightful)
Psystar had the advantage of massive word-of-mouth and R&D done for them by the hackintosh enthusiasts. Were it not for the legal trouble, I would assume that (barring specific incompetence) they could have carried on for a fair while.
I agree that they had major name recognition, but that recognition equated to them being labeled "the guys who are pissing off Apple by making clones" and not "the guys who are making awesome, cheap Mac clones that I want to buy". The members of the /. community that enjoy Macs do so because of the technical merits (UNIX underpinnings, efficient GUI, etc. [don't flame me]). The rest of the world likes Macs because they're "cool" and they don't necessarily define that "coolness" explicitly. So, if a /.er wants the technical advantages of having a Mac without the price, they go for a hackintosh. The problem there is that a /.er is probably just going to build that hackintosh him/herself rather than pay Psystar for one. Not only is it cheaper, but you get to learn something in the process. The rest of the world would see a Mac clone and say "that's not a Mac! It's not cool!" and move along.
When I hear "normal" people complain about Macs, what I hear consistently is "I wish Apple would make a cheaper Mac", not "I wish some other company would step in and compete with Apple to drive down the price." What I'm trying to say is that the market for pre-built hackintoshes is tiny. Of all the people I know, both technical and nontechnical, I can't imagine any of them buying one.
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Re:All fun and games till Apple goes trusted (Score:5, Interesting)
Apple has promised there will not be chip level lockdowns in OS X, or any future apple OS. their OS runs on commodoty hardware, they only license it to run on Apple Brnaded systems (currently). It;s been rumored for years that Apple is partnering with dozens of vendors and plans to release an OS X approved spec and sell OS X on shelves opposite Windows (likely on a price tier competitive to Home Premium, but including iLife).
Apple has not released OS X for open systems for 1 primary reason: they don;t want to support your junk kit, and they don;t want to get the blame for OS X having stability issues. If manufacturers are allowed to be held to the same wishy washy standards as micsoft, then not only would OS X be seen to be just as unstable, but it would likely be sold on many systems that don't really meet the minimum specs of iLife, and would provide a lack-luster performance.
The hardware market has been shrinking (unified drivers, fewer verndors, better driver certification, open standards). In a couple of years, especially once dedicated GPUs become the norm across all systems, and when comodoty $500 PCs have significant specs, I expect to see Apple come pre-configured, OEM, on select systems, but by that point, Apple hardware should also be slightly more in line price-wise (on several systems, Apple is actually currently cheaper than the competition, especially in the pro and server lines, but on the low end there's still a premium for the design and software).
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Re:All fun and games till Apple goes trusted (Score:4, Insightful)
Lets do ignore that the last time they allowed clones, they got their lunch eaten.
I agree, stability would be an excellent reason. But the pure truth of the matter is, even with the change to Intel, Mac's are priced more on brand name than the cost of the parts that go into them.
Apple can't compete against a company that can produce cheaper products because Apple considers one of it's strengths to be it's "Designer Computer" status.
Apple will never (in it's current incarnation and under Steve) allow anyone but Apple sell Apple computers. Period. They can talk all they want about how in the future we'll have jetpacks and a "Dell Mac" on every desk. But when it comes down to the brass tacks, it'll never happen and they certainly are not basing their business plans on the idea that it could.
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