neutrino23 said:
I lived through that time but didn't understand why it hurt Apple. If Apple got some license fee for each system they should have been OK.
Then you have absolutely not room to be talking or theorizing about this subject, because the entire point of limiting, then removing, licensing was that the cloners were costing Apple a lot more in revenue than the licenses were bringing in. At some point, the hemorrhaging would have gone critical and Apple Computers, not to mention the Macintosh as anything but the new hobbyist legend (i.e. Amiga), would have been a painful memory.
Read Apple's financial releases since Jobs came back. He's stabilized the company, brought them back to being profitable, and streamlined the production to the point that they're no longer losing insane amounts of money on inventory like they did in the early nineties. On top of that...
Apple makes between 8 and 10 times more on hardware what they do in software.
A little simple math for Q2 2004:
Net Sales - $1,909,000,000
Gross Margin - $530,000,000
Computers Sold: 749,000
iPods Sold: 807,000
Computer Revenue: $1,160,000,000
IPod Revenue: $264,000,000
Software Sales: No record of number of units
Software Revenue: $160,000,000
Average computer revenue: $1,549
Average iPod revenue: $327
As a final note, to make up a loss of only 30% of their sales to cloners (consistent with what happened in the 1994-1997 time period), Apple would need to add $348,000,000 in software and licenses
to break even with current production. Thats more than tripling the current revenue of that particular branch.
My point is a little more abstract. The value of competitive teams is that it is very difficult to pick the winners in advance. If we think of several products that have been discussed but now shown (PDA, sub-notebook, headless iMac) those could have been made by third parties. If they flopped, they flopped. No skin off Apple's nose.
Aside from the fact that Apple's name is attached to the flopped product as the holder of the licensing rights that allowed it to be made, the already-negative perception in many of the PC using populace, and the general fickleness of the news media and their willingness to proclaim Apple's imminent death... Then there's the endless compatibility issues that, while solvable to some degree, begin to degrade the Mac OS experience for anyone who buys one of the cheap machines. The experience of needing to hunt up drivers for my CD-ROM in my PowerComputing clone still haunts me to this day - it's far too much like Windows.
As to how they do this, Apple could try to license OS X to third parties again. I don't know what the problem was last time. If it was just money they could set the license fee for the ROMs to counter the effect of any lost sales directly to the factory.
Nomcompliance with the licensing terms was a big part of it, but the worst of the issues was the greed of the cloners and their attempts to take away Apple's prime business. In the years cloning was allowed, marketshare didn't grow at all and Apple lost roughly 39% of their revenue in the final year of the experiment.
I like the first method best. This way you get product that organically survives. Imagine some little company in Japan making a one kg subnotebook. They might make compromises acceptable to the Japanese customer but which are repugnant to Apple's designers. So what? As long as they get orders they will survive. As long as Apple gets $100 or $200 a system why should they care?
Ewww.
Just... Eww.
What you're suggesting is turning the single best user experience in the computing world into a more expensive, less accepted copycat of the Windows marketing model. Opening the hardware to people using cheap components would ruin OS X and Apple.
[quoteActually, I think they care because they can't compete. If someone made a nice consumer mini-tower with a G5 selling for about $700 who would buy an iMac with a G5 for $1,600 (for example)?[/quote]
Well, there's no risk of that happening, so it's a moot point. The only way to make a $700 G5 tower would be to buy a case and put the processor on the floor of the box, with maybe another component or two. The PowerPC architecture is more expensive than PCs because of economies of scale, and the motherboards are especially affected by this.
Look up PegasOS, if you don't believe me. They sell G4s built on commodity parts that are
more expensive than Apple computers.
Apple's product would be beautiful and perhaps very well made, but many people would sacrifice that. Imagine that if Apple licensed OS X to Dell. What would that look like?
Absolute and utter crap, with more quality control issues than you could possibly imagine at this point. The reason we hear about problems with iBooks is that mac users are more likely to find groups to talk about their issues, not because macs are more likely to fail.
You don't see DellRumors.com out there, do you?
