Psystar Files for Bankruptcy

[NEiMac]

Why is it no company wants to just take BSD and make there own apple like operating system, if apple can do surely some other company can handle it, Dell or someone surely could. Anyways, I'm glad they went bankrupt, ripping off apples operating system always seemed stupid to me.

 

[macUser2007]

Yeah and I could go and buy cheaper alternatives from Dell, HP, Acer who have much better computers than the crap coming from these thieves.

So, go do it. Then run Hackintosh on it, if you want.

What's your point?

 

[Goona]

I don't think you are an Apple hater. I see your point about what Apple would have to do to get to a 15% market share and I do agree with you. However, I think this makes the assumption that Apple wants a 15% share, given the sacrifices that would have to be made in order to get there.

At the end of the day, Apple stock has one of the highest values in the tech sector and they are sitting on cash reserves that other companies would kill for. Every year their market share grows and people are buying their premium products even in our current economic downturn. While you or I may want them to release certian products to better suit our needs, the numbers clearly show that they executives at Apple are making good decisions regarding their brand and company.

Why is this so difficult for people to understand.

 

[Veri]

Yeah and I could go and buy cheaper alternatives from Dell, HP, Acer who have much better computers than the crap coming from these thieves.

HP (nee Compaq) never copied the IBM BIOS, you know. They "black boxed" it. Pure coincidence that they had employees who had seen IBM BIOS source listings. And Leibniz's proximity to Newton's drafts when he took a trip to London? Totally unrelated. Apple's proximity to Xerox? Oh, the minor similarity here and there was paid for fair and square. That's why Xerox never raised a legal eyebrow.

Let's face it, Psystar didn't have the intellectual capacity or financial backing to get away with it. This whole debacle is one of legal force and lack of market interest - there's no moral high ground. But it's nevertheless entertaining, because every layman is weighing in to give a legal opinion to defend his set of beliefs about who is right. The dissonance rivals my long-ago attempt to write a tune in a music theory examination. The notes were all there, but the music was wanting.

 

[ericinboston]

P.S. And to nitpick, Apple is certainly above 20% in the Mac world. Probably closer to 100%.

my words were flowing faster than my fingers...but I think everyone knows what I meant.

 

[Goona]

How does it "serve them right"?


It'll be very interesting to see the names of people who have been funding this company though.

It serves them right, they made crap products, tried to use someone's IP to sell their products and they went bankrupt.

 

[*LTD*]

I'm glad you're one of the people that can politely debate topics here.

I find it extremely odd that Apple wants to sit at sub-20% marketshare in the Mac world. I mean, what company strives to make a product line that only has 9% marketshare? Seriously.

Premium products sell on margin, not volume. It's that simple.

Volume seems to be a losing game in the computer industry in recent years, as far as profit is concerned.

Apple has ignored the low end market for a very good reason. Nobody in that market is making any money.

Look at Dell's margins, then look at Apple's. Dell is struggling. Apple gross margins average 33%, while Dell struggles to achieve 18%.

Simply put, Apple's share of the high end market is 70%+. This is where computer profits are being made. It is not in volume. That's a loser's game.

Price as a differentiator doesn't really play a role in the Premium end of the market - at least not as great as in the low end.

 

[dejo]

...but I think everyone knows what I meant.

I would hope so too. In the words of Triumph, The Insult Comic Dog: "I keed, I keed."

 

[Goona]

Dang, this sucks. I liked Psystar's configurations better than Apple's (they had more variety and were cheaper). They actually had a pretty decent tower for under $800. Now we are stuck with Apple's garbage.

So did you actually buy one since you liked them better?

 

[smurfjammer]

Why is this so difficult for people to understand.

Because some people believe that marketshare is the only way to be dominate not by simply through innovation.

 

[gnasher729]

Dang, this sucks. I liked Psystar's configurations better than Apple's (they had more variety and were cheaper). They actually had a pretty decent tower for under $800. Now we are stuck with Apple's garbage.

I rarely got a chance to look at Psystar's systems but for the most part, they were cheaper than Macs but more expensive than PCs...they were designed for folks who were somewhat technical but didn't have the time or knowledge to go about buying $400 in hardware and converting it to a Mac.

Lemme guess, someone's gonna reply telling me to go out and buy one of those really cheap $2700 Mac Pros.

Psystar ran up $250,000 in debt. If we assume highly optimistically that they sold 1,000 computers, then they lost $250 per computer. So they should have charged at least $250 more to just break even. These computers were not cheap. They were just sold way, way below cost. Now imagine you had purchased a Psystar computer with three years extended warranty. You know what you could do with your three years extended warranty now

Yes, it is very easy to sell computers cheaper than Apple if you accept a big loss on every sale.

I find it extremely odd that Apple wants to sit at sub-20% marketshare in the Mac world. I mean, what company strives to make a product line that only has 9% marketshare? Seriously. I doubt Uniden does with their home phones, or Honda with their cars, or Western Digital with their storage solutions. Why the heck would a company, publicly-traded I might add, want to sit at such a low marketshare?

There is one thing you need to learn about market share: The market share numbers that you see published are "unit sales". That means computers sold. The $299 Dell counts the same as the $2499 Mac Pro. That's not what Apple counts. They look at revenue, and counting revenue Apple does a lot lot better than you would think from the unit sales numbers. But revenue doesn't really matter; what matters is profit. And now go and compare Apple's computer profit with Dell's, who sells four times more computers.

Apple wants to maximize profit, and they have a long term view on that. Apple has a strategy that helped them increase unit sales, revenue and profit for the last several years (excluding effects of the current recession). Sure, Apple could change its strategy and increase unit sales massively in the short term. However, there would be a huge danger that they would destroy their growth that way. You are not looking at the long term, Apple is.

 

[ericinboston]

Not necessarily. Since you mentioned earlier that you were not fond of car references, I'll use something else - Rolex. Rolex is a premium timepiece company with a very small marketshare (relative to all timepieces sold). Part of what aids the consumers idea that Rolex is luxury and premium (and therefore worth the high price tag) is the fact that only a few people own them. Part of being a premium product is smaller marketshare.

At the end of the day, I feel Apple values profitablity and stock price above market share (just as any publicly traded company should). I have no doubt in my mind that Jobs & Co. would licence out OSX to everyone and their mother if they felt that that was the best way for their company to be profitable. They have decided not to do that, so I have to believe that their models show that the low marketshare / high profit hardware stratagy is the best for their products.

I get what you are saying on all this...and I do agree to a point. Apple doesn't have to run the company by marketshare alone and of course marketshare itself is not the way to run a company.

But alas, until Apple starts offering some Macs that are cheaper, the friends/family/co-workers I know will not be buying Mac. Just as your rolex watch example where all watches do the same thing, most of these people want to "do the same thing" on a Mac just like they do on their pc...surf, email, photography, word processing, pay bills, etc. And to them, it's alllll the same stuff (and it's true especially since everything is web driven these days and you can use Firefox and Safari and IE cross platform...so it all acts and looks the same). So to them...for their use cases...the average Joe...why spend 2-3x more on a Mac when they can get a pc (just like spending 2-3x more for a watch or a tv or desk lamp?) And no, I don't wanna go down all the perceptions/reasons of why a Mac is better than a pc.

 

[smurfjammer]

That is true, but can you get Software Updates or 10.5.xx updates?

Tell that to the people that actually bought Psystar computers who now have no support or updates.

 

[flopticalcube]

Dang, this sucks. I liked Psystar's configurations better than Apple's (they had more variety and were cheaper). They actually had a pretty decent tower for under $800. Now we are stuck with Apple's garbage.

Only in desktop tower configs. 3 towers vs 1 tower, 1 all-in-one and 1 ultra-small. They had no laptops.

 

[Ansuz]

I get what you are saying on all this...and I do agree to a point. Apple doesn't have to run the company by marketshare alone and of course marketshare itself is not the way to run a company.

But alas, until Apple starts offering some Macs that are cheaper, the friends/family/co-workers I know will not be buying Mac. Just as your rolex watch example where all watches do the same thing, most of these people want to "do the same thing" on a Mac just like they do on their pc...surf, email, photography, word processing, pay bills, etc. And to them, it's alllll the same stuff (and it's true especially since everything is web driven these days and you can use Firefox and Safari and IE cross platform...so it all acts and looks the same). So to them...for their use cases...the average Joe...why spend 2-3x more on a Mac when they can get a pc (just like spending 2-3x more for a watch or a tv or desk lamp?) And no, I don't wanna go down all the perceptions/reasons of why a Mac is better than a pc.

I see exactly where you are coming from and you are 100% right; so long as Apple maintains a high price point then Mom, Dad, Uncle Joe, etc. are going to not choose the Mac due to the "Apple Tax."

My only point has been that Apple is perfectly justified in ignoring the needs of Mom, Dad and Uncle Joe if they choose to. If they don't offer a product that is the right fit at the right price for the consumer then that is their choice. In Apple's case (financially speaking) its seems to be a very profitable decision.

I think that for many of us, we get on Apple's case because we are personally frustrated that other companies offer a product that fills our needs and Apple does not. We want to have our cake and eat it to - we want the product that Dell makes but we want it to run OSX as well. Our frustration is justified but we can't simply take Apple's property and produce the product that we want like Psystar did. We have to accept that sometimes we have to sacrifice our wants because of our means or vice versa.

 

[Goona]

Because some people believe that marketshare is the only way to be dominate not by simply through innovation.

Some people believe marketshare is the end of the world. In fact they would rather you have high marketshare instead of actually making money. I mean if Apple gave their computers away for free, they would greatly increase their marketshare but would also be out of business soon.

 

[ericinboston]

Premium products sell on margin, not volume. It's that simple.

Volume seems to be a losing game in the computer industry in recent years, as far as profit is concerned.

Apple has ignored the low end market for a very good reason. Nobody in that market is making any money.

Look at Dell's margins, then look at Apple's. Dell is struggling. Apple gross margins average 33%, while Dell struggles to achieve 18%.

Simply put, Apple's share of the high end market is 70%+. This is where computer profits are being made. It is not in volume. That's a loser's game.

Price as a differentiator doesn't really play a role in the Premium end of the market - at least not as great as in the low end.

All true...but at the end of the day, Apple needs to "make" money. And they seem to be doing that well right now (but remember, they also sell bazillions of iPhones, music, iPods, etc. so I don't have raw #s and profit/revenue for just the Macs). If the non-Macs fizzle out quickly, what will Apple sell to keep the company afloat? Are they gonna change their name back to Apple Computer? It's kinda hard to put these thoughts in writing...much easier verbally.

 

[Veri]

The laws in most countries allow individuals above a certian age to willfully enter into a legally binding agreement - that is in essence all a contract is. The laws on the book that allow these agreements are what make contracts legally binding. Unless you are able to show why the enforcement of a contract, or a particular clause in a contract, would violate other laws then the courts will rule that contract binding.

I accept what you're saying. What I was trying to get across was that one is only bound by a contract to the extent that either (i) he feels it honourable to do so; or (ii) he feels that the other party will successfully get a court to force him to comply.

A court does not confirm in advance that it's going to make sure both parties comply with a contract, and the complexity and inaccessibility of the law is such that (ii) is far from rubber stamping. In other words, it can only be decided in arrears that you were actually "legally bound".

(Also, on a technical point, you can have terms which are not enforceable but which would not violate any law. For example, prostitution isn't illegal in England - contrary to popular opinion - but no term in any contract requiring someone to have sex is enforceable.)

 

[IWantItThatWay]

So did you actually buy one since you liked them better?

I would've bought Psystar if they were more secure (I knew they were going to go downhill sooner or later). I do not like Apple hardware at all (most people do not) and not only is it outdated, laughable hardware, but it's way too expensive.

Psystar offered a nice $600 Mac. I am not saying Apple should offer a tower Mac for $600 but an $800 Mac with decent specs and possibly a monitor.

 

[farmboy]

Just to point out your failure in this logic: Most contracts are not 100% legal; .....

Actually, the clause is there "just in case"--the contracts may be 100% "legal" (by which you must mean enforceable). So you can't say "Most contracts are not 100% legal" just by the existence of this clause.

As to the others here who just do not get contract law, please do everyone a favor and go back and read the old threads where this issue has been hashed out literally thousands of times.

(Pre-emptively, please do the same if you don't get patents either).

 

[IWantItThatWay]

Only in desktop tower configs. 3 towers vs 1 tower, 1 all-in-one and 1 ultra-small. They had no laptops.

Yet despite the only 3 towers they had way more configurations than Apple (no laptops unfortunately). Apple gives you the crap they want to give you.

 

[smurfjammer]

All true...but at the end of the day, Apple needs to "make" money. And they seem to be doing that well right now (but remember, they also sell bazillions of iPhones, music, iPods, etc. so I don't have raw #s and profit/revenue for just the Macs). If the non-Macs fizzle out quickly, what will Apple sell to keep the company afloat? Are they gonna change their name back to Apple Computer? It's kinda hard to put these thoughts in writing...much easier verbally.

Most of their profit comes from desktops & laptops than iPods & iPhones.

 

[Glideslope]

I would've bought Psystar if they were more secure (I knew they were going to go downhill sooner or later). I do not like Apple hardware at all (most people do not) and not only is it outdated, laughable hardware, but it's way too expensive.

Psystar offered a nice $600 Mac. I am not saying Apple should offer a tower Mac for $600 but an $800 Mac with decent specs and possibly a monitor.

ROFLMAO. You go dude!!!

 

[Tallest Skil]

I do not like Apple hardware at all (most people do not)...

Subjective and unsubstantiated.

and not only is it outdated, laughable hardware, but it's way too expensive.

Incredibly subjective. Also, Gainestown.

Psystar offered a nice $600 Mac. I am not saying Apple should offer a tower Mac for $600 but an $800 Mac with decent specs and possibly a monitor.

When the cheapest monitor Apple makes is more expensive than this vaunted Mac, I'm going to say that they will never make it... because they don't make crap.

 

[dejo]

(but remember, they also sell bazillions of iPhones, music, iPods, etc. so I don't have raw #s and profit/revenue for just the Macs).

Apple Reports Second Quarter Results

And, in particular: Q2 2009 Unaudited Summary Data

Macs accounted for 2945 $M of the quarter's 8163 $M revenue. That's equal to 36% of their total revenues.