Mac Clone Maker Psystar Files For Bankruptcy 366
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.
$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.
Why? (Score:5, Insightful)
If you want OS X that bad why not just buy a Mac?
And now litigation stops w/Apple (Score:5, Insightful)
Until out of chapter 11.
RussianMac FTW (Score:1, Insightful)
Let's see Apple try to sue them. Jobs will get whacked on the way to the Moscow courthouse.
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.
Re:$250 K ? Must be a typo (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:$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.
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.
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.
.
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.
Re:$250 K ? Must be a typo (Score:3, Insightful)
The same people who would invest in a company about to be ass raped by IBM's lawyers?
Re:Who Bankrolled Psystar? (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.
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
Re:because OSX is good, Apple hardware not so much (Score:2, Insightful)
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.
Re:Know what's going to happen if this keeps up? (Score:2, Insightful)
Or they simply won't sell retail copies of OS X, which is how Psystar was doing this.
Which will leave only the people who are violating their copyrights, something far more easily pursued (if they sell in Europe, the US, or Japan.)
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.
Re:because OSX is good, Apple hardware not so much (Score:3, Insightful)
Well in fairness, there's nothing wrong with the hardware Apple offers, and it's not even that terribly overpriced. It's just-- like you said-- there's a hole in their lineup. It would be nice if they offered an expandable mid-range tower.
But then, part of the problem there is that they don't really care to let people expand. That's my theory. It's not so much that they want to force you to buy a new machine, but if you can upgrade your sound card and video card, suddenly Apple has to support an endless number of various configurations.
That's fine when it's a pro-level machine and the customer is paying that premium anyway, and the expansion cards are pro-level hardware from manufacturers working directly with Apple. But I don't think Apple particularly wants to have every minor hardware company releasing bargain-bin video cards which Apple will then be forced to support.
Re:Microsoft: (Score:3, Insightful)
They've also built their fortune on making an OS you can install across x86 hardware (and even some other platforms).
It's not so much the EULA as a whole that's in question here as much as it is a specific clause of the EULA - the clause that states the OS may only be installed on a specific manufacturer's hardware. That is not Microsoft's business model so they would have absolutely no interest in helping their arch enemy protect it.
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)
Re:Why? (Score:3, Insightful)
After all, any 3l33t Hax0r can download a hacked copy of OSX from usenet and get it running on their PC.
Maybe. Or maybe they'll find that their PC doesn't have the right set of components - OS X isn't exactly compatible with a wide variety of hardware, you know? What Psystar provides is a system that's known to be compatible with OS X, with prices and configurations that fill the huge, gaping chasm between the Mac Mini and the Mac Pro.
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.
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.
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.
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.
Sunset (Score:3, Insightful)
The larger and growing larger hole in the mac lineup is the tower. as an apple investor I find it inexcusable.
The tower is in its last days as a mass market product. Too much space. Too much power. Too much weight.
Re:Nothing of value was lost... (Score:3, Insightful)
Re:because OSX is good, Apple hardware not so much (Score:1, Insightful)
"What would you really want to use those PCIe slots for that you couldn't find reasonably equivalent functionality via USB or Firewire?"
last time i checked nvidia nor ATI made a USB graphics card
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.
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.
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.
Re:$250 K ? Must be a typo (Score:2, Insightful)
2/ Do something which is going to get you into legal problems, but where the revenue is uncertain
3/ If idea sells like mad and you make millions, goto 5/
4/ If idea doesn't work out[1], goto 7/
5/ Big corp buys small company, uses funds to fuel legal battle.
6/ Keep going until legal costs cancel out profits.
7/ Force small company to file for bankruptcy.
[1] In this case, "Idea" didn't work out, because they weren't competitive, and they overpriced their hardware nearly as much as Apple themselves, didn't give any added value, and didn't give the bling element of original.
Re:because OSX is good, Apple hardware not so much (Score:3, Insightful)
What I'm saying is that the "mid tower" you describe *likely* doesn't differ significantly from the iMac
The main difference is that it could be much cheaper with the same profit margin. The problem with the iMac and AIO desktops in general is that they're more expensive than buying the equivalent pieces individually, so if you don't place a large positive value on the integration then it's not a good deal.
Re:Why? (Score:3, Insightful)
I do think OSX is that great. And since "most other people" don't even know any system but the Windows that came with their PCs, I see no reason to give a flying fuck about whatever they think about this.
Re:because OSX is good, Apple hardware not so much (Score:3, Insightful)
"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."
Future-proofing. Case in point, USB 3. Any slotless-Mac you buy right now will obsolete once the first USB 3 only peripheral ships.
Which means you have to buy a new computer, which is good for Apple, but not for the owner of the Mac with no slot.
And note that I'm responding on 2002 G4 Quicksilver, which came with USB 1, and would have been in the dumpster years ago except for the USB 2 card sitting in the expansion slot.
And there is a SATA card in one of the other slots as well. And I upgraded the video card along the way too.
Re:Now,now, nothing to see here move along. (Score:3, Insightful)
So you expect them to just give up on the rather lucrative sales of OSX to all their old macs? I bought leopard for my 3 year old macbook along with a new hard drive. Thats $150.00 of almost pure profit for Apple, that they wouldnt have gotten from me otherwise, I had restore CD's, I could have used them, but I wanted expose and spaces and time machine. I highly doubt they'd give up that second sale just to spite another company.
All Apple's software sales together make up about 6% of their profits. That includes iWork and all their professional software. OS X is probably less than 1%. It is fairly insignificant in the grand scheme of things. They can eat the cost. They can raise the cost of Macs ever so slightly and people will pay it, especially if the value of macs goes up by having free OS upgrades. Or they can incorporate the sales into the .mac service thus increasing profits by getting people to subscribe to a yearly service when they mostly just want on OS update. Or, as per my first suggestion, they can move to all online sales and lock it down with DRM.
I highly doubt they'd give up that second sale just to spite another company.
Spite another company? I don't recall suggesting any such thing. They're protecting their market for PC's which is about half their income and at the same time preventing the Apple and OS X brands against dilution. They might not do it to stop a very small company, but the larger any such competitor grows the stronger the business case for such a move.
Re:because OSX is good, Apple hardware not so much (Score:3, Insightful)
....that's the Mac I want to buy....
Yes, you and a few dozen slashdot nerds and nobody else. People who need a big professional machine are willing to pay for it and buy a Mac Pro with 2-4 core processors and up to 32 GB of RAM. These people are usually creators of content who wish to use a computer professionally rather than futz with it for its own sake.
Other than nerdy geeky things, an iMac will do everything 99% of normal users might wish to do. Nowadays, most ordinary users are buying laptops anyway. The main reason why Apple has not sicced its lawyers on the Hackintosh community is that the number of such computers and their users is down in the noise and would not be worth the cost. However, as soon as someone tries to build their business on Apple's hard work, they do take note of this and bring out their attack lawyers.
Re:Nothing of value was lost... (Score:2, Insightful)
Exactly.
The bottom line is... that if I want to do the hackintosh thing, I'll do it myself thank-you-very-much. In fact, I've been seriously considering picking up a netbook and doing exactly that. Basically, the only thing holding me back is the wait to see what comes out at WWDC. And even then, I still may just roll my own. But I accept that, in that case, I'm on my own if something goes wrong.
But if I'm actually going to pay a company to build my computer for me; to my mind, I'm not paying just for some drone to pull the parts off the shelf and throw the mess into a box. I'm paying for support and service. Can I get AppleCare for these psystar boxes? If it breaks, can I run it down the road to the Apple store and have a Genius fix it for me? Is psystar going to provide someone to talk me through twenty minutes of the merits and flaws of Parallels vs VMware and let me try both out on a demo machine before I make a choice? Somehow, I think not.
cya,
john
Comment removed (Score:2, Insightful)
Re:$250 K ? Must be a typo (Score:3, Insightful)
The DMCA has not come up in this legal battle that I know of. Apple might, however, add DRM and use the DMCA to stop Pystar and others going forward.
Yes, it has come up. One of the things that Apple sued for was DMCA violation. And Psystar's answer was "Apple is an evil monopolist that puts things into its code to prevent it from running on our computers, and we had to remove it, but it isn't DRM".
Apple's DRM in MacOS X is quite well documented. There is a chip on the Macintosh motherboard containing a 64 bit number which is used by the OS to decrypt several important modules. It is completely unnoticeable to a Macintosh user; it doesn't prevent you from installing any number of copies of MacOS X on any number of Macintosh computers, and it is quite easy to work around (which is why many people think there is no DRM), but it is there; just effective enough to allow Apple to sue anyone copying MacOS X to a non-Macintosh computer for DMCA violation.
That's like the lock on my door that wouldn't physically prevent my neighbours from entering my house if they really wanted to, but it is enough to make it a rather serious crime.
Re:Microsoft: (Score:3, Insightful)
I'm not sure Microsoft is really where it is because of lack of cheap alternatives else Linux, certainly since the later Ubuntu releases would be doing much better.
I think it comes down more to interoperability, businesses buy a machine, it has Windows on it, so they figure they'll just go with Windows server, then they figure they may as well develop with Visual Studio and use MS SQL for their database and so on.
I think it's more about lockin - sure people could get systems with Mac OS X cheaper, but would they really want it if it wouldn't run all the applications they've built in .NET at least without hassle? What about the fact Mac OS X server is a rather poor offering, they'd probably want to keep their Windows servers and how well would they integrate there? What about retraining their techies to deal with any problems that may arise with Macs?
Of course, one business sees their partner or customer business using Microsoft tech. so they use it to so they can interoperate with them easy, this carries on down the line is why so many businesses use MS software. I think the only way to deal with that is if a complete offering can be provided that is at least as good as Microsoft's or simply over time by pushing Microsoft to follow open standards and then building alternatives based on those standards so companies can migrate away one peice of software at a time. Whilst Mac OS X is indeed a fine OS, it's only a small part the puzzle, you'd still likely be running MS office on it and Mac OS X server leaves a lot (too much really) to be desired. For all Micrososft's faults, Visual Studio, .NET and C# really does offer the best combination of development speed, performance, application quality out there so Apple would really need to bolster up their development tools, provide a database offering that integrates as nicely with everything else in the network as MS SQL server does.
I think Microsoft just has their claws in too many markets for people to switch to a new OS regardless of price, even if many people see it as better than MS' OS, it's the whole package that Apple can't provide but Microsoft can. People are in general lazy and unwilling to take an ethical/moral/personal stand if it requires more effort and the full solution model of doing things just caters too well to that.
Re:So XP isn't ready for the desktop either? (Score:3, Insightful)
I went to Best Buy.com and picked the first of each that came up. The printer (Epson PictureMate Dash) probably would have worked on a Mac and maybe would have worked on Ubuntu (the flavor of Linux I use). Without buying it, I can't tell for sure, but the information I found online seemed to show that it would. Neither the wifi card I chose or the TV tuner supported Linux, but then they didn't support Mac OSX either.
So because hardware manufacturers don't support Mac OSX it just isn't ready for the average user?
Re:because OSX is good, Apple hardware not so much (Score:3, Insightful)
But do you really want that much GPU hardware with a machine that only has a single 2-3 GHz Core 2 Duo CPU? Wouldn't you do better with at least 4 cores with such monstrous graphics hardware? Say... like in a Mac Pro?
Re:Now,now, nothing to see here move along. (Score:3, Insightful)
Apple is a business and will do what makes the most business sense. In the face of significant erosion of their Mac business to clone makers or to threats to their brand, that's probably to move away from their currently DRM free, trust the user, policy and towards a DRM lockdown.
Trust the user. You must be new to dealing with Apple.
Apple has been fucking over their users for years.
You're an idiot. It's perfectly legal to run a business so successfully you gain a monopoly. It's only illegal to abuse that monopoly by damaging other markets.
Tell that to Ma Bell. There are many issues involved in anti-monopoly law. The simplest is leveraging your monopoly to take over another market.
Try reading something other than than an Apple press release, you cock-smoking fanboi.
LK