Psystar to countersue Apple for antitrust violations

[gnasher729]

If you go back to the first post, you said, and I quote:

"As I said in another thread, in order for Psystar to have antitrust case, they must prove that "Apple Macintosh Computers" are a separate market over which Apple has a monopoly."

I responded that (a) they need not prove any such separate market and (b) they need not prove a monopoly. A separate market and a monopoly are not elements of the tying claim. Period.

These two things are obviously related. It is quite common that a monopoly goes together with market power. If Microsoft decided to get out of the market and stop selling Windows, then Apple would suddenly be both at least close to being a monopoly, and would have enormous market power. However, if someone just tries to define an artificial monopoly (like Apple's "monopoly" on computers running MacOS X or Dell's monopoly in Dell computers), such an artificial "monopoly" will usually be lacking the market power.

 

[CWallace]

If Microsoft decided to get out of the market and stop selling Windows, then Apple would suddenly be both at least close to being a monopoly, and would have enormous market power.

Not so sure about that.

Enterprise/corporate would likely migrate to Unix/Linux because Apple is very weak in that area. So that would be a very large part of the market right there.

I do agree that Apple would certainly see huge growths in retail and consumer, however.

 

[IJ Reilly]

These two things are obviously related.

They are very much related. A monopoly is just one way to exercise market power. The various forms of collusion are another (cartels, price fixing, etc.). It is easily demonstrated that properly defining the market is absolutely key to proving that a company has violated antitrust laws. For an example of this, look at Judge Jackson's findings of fact in U.S. v Microsoft.

http://www.usdoj.gov/atr/cases/f3800/msjudgex.htm

This document starts out with the section "The Relevant Market," the first paragraph of which ends with the sentence,

Therefore, in determining the level of Microsoft's market power, the relevant market is the licensing of all Intel-compatible PC operating systems world-wide.

This fact established, the next section of the findings is entitled "Microsoft's Power in the Relevant Market."

The key here is understanding that some activities are illegal when market power is found to exist, but perfectly legal when they are not. Monopolies for one are not inherently illegal. Neither is product tying. They are only subject to sanction under the antitrust laws when they are found to be restraining trade in a relevant market. If a plaintiff in an antitrust case fails to identify the relevant market, their case fails.

 

[LittleGuy1234]

Response

Not to belabor the obvious but doesn't the "you" in that clause pertain to the buyer of the software? Or in this case, Psystar?

"You" would be the individual who accepts the SLA (Software License Agreement).

Quoted from the Software License Agreement for Mac OS X:
2. Permitted License Uses and Restrictions.

A. Single Use. This License allows you to install, use and run one (1) copy of the Apple Software on a single Apple-labeled computer at a time. You agree not to install, use or run the Apple Software on any non-Apple-labeled computer, or to enable others to do so.

Quoted from the Official Filing:
48. PSYSTAR denies that it has advised, encouraged, and assisted others to breach the License Agreement; PSYSTAR has not advised consumers to acquire Mac OS X software and install, use, and run it on non-Apple-Labeled computers. PSYSTAR denies that it has unlawfully induced breach of the License Agreement by others.

How could this be in fact the truth? When Psystar offers Mac OS X "pre-installed" on hardware units not bearing an Apple product name such as, "Mac mini, iMac, MacBook, MacBook Pro, Mac Pro etc.".

 

[matticus008]

These two things are obviously related. It is quite common that a monopoly goes together with market power.

Being related does not make two things interchangeable. That's the problem all along.

He said "Apple needs a monopoly"--they don't. When corrected, he said "lots of people don't understand the term monopoly" (no kidding!), and then proceeded to challenge legal definitions, instead of simply admitting that his statement was absolutely incorrect--or not responding at all.

However, if someone just tries to define an artificial monopoly (like Apple's "monopoly" on computers running MacOS X or Dell's monopoly in Dell computers), such an artificial "monopoly" will usually be lacking the market power.

Actually, that sort of "monopoly" has absolute market power. The problem is that the market is misdefined.

I will go back to the first post

That's not the first post. The first post was where you submitted this faulty proposition:

"As I said in another thread, in order for Psystar to have antitrust case, they must prove that "Apple Macintosh Computers" are a separate market over which Apple has a monopoly."

I've only ever been responding to that proposition, and the attempt to backtrack out of it instead of simply moving on, for several days now. It wasn't accidental; it has been a consistent error in usage in all of your posts on the subject. It is wrong. Full stop.

Whether you accept this or not, I really don't care, especially not now, when it's becoming clear that you are more interested in picking a fight than having a discussion.

I'm happy to have a discussion, but not when your clear ignorance and utter inability to accept your improper framing of the issue and improper use of terminology interferes with that.

And yes, absolutely, the definition of markets is essential to antitrust law.

And where do you see some other statement?

Once again, tying is not illegal absent market power over a properly defined market.

It's not illegal simply when it's present, either. But that has never been the question--the issue was your misuse of terminology, and then trying to spin a web to prevent having to confront your simple error. It continues to be unhelpful.

Again, this is a puzzling response, given that I have already said numerous times that monopolies are not required for violations of antitrust law to occur. How many more times do I need to repeat this?

Neither monopolies nor market power are required to commit antitrust violations. Both can constitute anticompetitive practices, but they are not the only ones.

I explained that I have found over years of discussing these issues with people who are "ignorant of legal matters" that the use of the shorthand "monopoly" to describe all circumstances to which antitrust law applies tends to confuse matters. And I'd think you'd agree with this if you weren't so busy being disagreeable.

That's the entire point. You used the word "monopoly" where it did not belong. You then proceeded to attempt to make 'monopoly' and 'market power' interchangeable to save face--and further attempted to redefine antitrust law in terms of market power, again inaccurately. You have not yet recanted those statements, despite your clear error.

Instead, you persist on fighting some other battle in each successive post.

Antitrust law is not premised on market power any more than it is on monopoly power. You return to challenge that which you do not understand--it's not my problem that you can't stand to be corrected, but I won't leave the faulty information, no matter how many posts you make about it.

You've successively misdefined a number of terms, tediously extending the thread, all in defense of a completely indefensible statement.

They are very much related. A monopoly is just one way to exercise market power. The various forms of collusion are another (cartels, price fixing, etc.).

And now you are breaking into new territory. A monopoly can exercise market power, but the more accurate statement is that a firm usually exercises market power to create a monopoly. The "various forms of collusion" (itself a problematic statement) are ways of obtaining market power. If you have market power, you don't need to conspire to raise prices, you can simply do it. This conflation simply must stop.

 

[MagnusVonMagnum]

Apple needs other models of machines like GM needs the ridiculous number of models of cars it has (somewhat off-topic: this is why Chysler and GM have dropped brand names over the years, to tighten up their product line).

Well, that's your opinion and you're entitled to it, but given the cries on Mac forums alone for an expandable Mac that isn't obsolete in 1-2 years, I'd say the possible market for a more traditional Mac (like the old PowerMacs) given the potential switchers from the PC market that clearly prefer such a case design is pretty substantial and it would be foolish to dismiss such ideas as 'ridiculous'. In the end, we are talking about a CASE here and the simple ability to add an extra hard drive without having it sitting on top of the desk or with wires draping across the desk because a monitor doesn't have room for a 2nd drive. Given Time Machine, it's even more dubious a design than in years past.

They don't need to be a jack-of-all-trades company; that's what the other PC OEMs are for.

Asking a computer company for a more traditional computer design in the middle of the road price range or lower prices ranges (instead of only at the top in the professional priced category) is hardly asking for a 'jack-of-all-trades' company. Give me a break already.

The point is, if you have a value proposition that sets you apart from the rest of your industry (as Apple does)

Did you ever consider it is Mac OS X that sets the Macintosh line apart from Windows PCs and not the fact of sticking a computer in the back of a monitor??? Given their more traditional laptop is their number one seller and not the iMac, I'd say your supposition is lacking at best. Given their only tower is over $2300 MINIMUM, there's hardly any evidence to suggest they wouldn't sell MORE computers if they'd offer something in that range as they once did. I mean seriously, if you think the CASE is what makes a Mac special and not its OS, well, you're entitled to your view, but it doesn't make any sense to me at all. There are all-in-one cases in the PC World too and they don't sell and that's because given a CHOICE, most consumers prefer a more traditional design where you can actually fit your backup drive in your computer instead of all over your desk, thereby defeating the 'neat' design of the all-in-one entirely. This fact seems to be completely lost on Apple's design department. You say your argument isn't a fanboy one, but it sure sounds like one to me.

I, for one, don't want a Windows machine as a primary computer or OS. I like MacOS X much better. But why should that mean I have to own some retarded design like the iMac just to use MacOS X? The whole point of Pystar's offerings is that they offer more bang for the buck and more expandability than ANYTHING in Apple's lineup. That's why there's a market for them. But if as you suggest the CASE is what is important, then Apple should not have had anything to fear from Psystar as they were clearly not trying to sell a computer on a stick like Apple does.

 

[CWallace]

I'd say the possible market for a more traditional Mac (like the old PowerMacs) given the potential switchers from the PC market that clearly prefer such a case design is pretty substantial...

If Apple dropped the price of the single-CPU Mac Pro to $1999 and the dual-CPU Mac Pro to $2499 - just as it was for most PowerMac G4s and G5s - would you consider that acceptable?

And remember that a Mac Pro:

• Supports 32GB of RAM while the PM G5 was 8GB (and PM G4s were 2GB).
• The G4 and G5 had AGP graphics compared to PCIx-16 on the Mac Pro.
• The G5 had SATA-150 vs. SATA-300 on the Mac Pro (though I admit that doesn't really make a difference at the moment, but it could help with SSDs). And the G4 had ATA-100 and ATA-66.
• You also have newer Bluetooth and WiFi specifications with greater performance. And I am sure the Gigabit Ethernet performance is better (based on my experience with this chipset).
• More USB and FireWire ports.

 

[Sun Baked]

Apple has a govt. granted monopoly in a derivative market.

Apple is at greater risk of a violation of the Sherman Act than usual, since they have terminated a licensing program -- a program similar enough to the current issue to be a problem.

Though they didn't terminate that license for malice, nor did they terminate a profitable licensing arrangement.

Could be said they terminated an unprofitable business arrangement, but still leaves the door open wider for a Sherman Act claim than if they had never licensed the OS in the first place.

They also dumped low margin products for profitability reasons, and re-entering that market could cause a significant decrease in profit margin. So there is a Wall Street reason for sticking with the current market ... and a bit harder for Psystar to unilaterally say, they refuse to sell cheap computers -- so we have the right to do it for them.

 

[IJ Reilly]

Apple has a govt. granted monopoly in a derivative market.

Apple is at greater risk of a violation of the Sherman Act than usual, since they have terminated a licensing program -- a program similar enough to the current issue to be a problem.

Though they didn't terminate that license for malice, nor did they terminate a profitable licensing arrangement.

Could be said they terminated an unprofitable business arrangement, but still leaves the door open wider for a Sherman Act claim than if they had never licensed the OS in the first place.

I don't see why. Apple chose on their own volition to license under specific terms and conditions, then ended those contracts when the program proved unprofitable. I can't see the courts forcing Apple to recreate a licensing scheme which they've already found to be disastrous, Sherman Act claims or no. The market Pystar claims Apple is illegally controlling simply does not exist today, and only arguably existed ten years ago when Apple chose to license their OS. This is a big problem for Psystar.

 

[CWallace]

Apple's license to cloners was only for System 7. When System 7 was retired and System 8 was launched, the cloners were effectively shafted since even if they could continue to sell System 7, the market would not want it after a period of time due to the superiority of System 8.

It would be like Wintel manufacturers having a Windows 3.11 license and Microsoft ships a new PC that uses Windows 95. How many people would still buy Wintel machines with 3.1, versus the Microsoft PC with Win95, even if the Microsoft PC was more expensive and not as powerful?

It's all about the experience with Apple.

 

[IJ Reilly]

If memory serves, Apple ended some of the contracts with the cloners even before OS 8 came out. It seems to me that PowerComputing had the rug pulled out even before OS 8 shipped. Of course Apple had bankrolled them, so more than licensing was at stake in that case. The point being, I don't believe any of them had a perpetual license to bundle the MacOS with their hardware. It's a long time ago, but that's what I remember.

 

[matticus008]

Apple has a govt. granted monopoly in a derivative market.

The government-granted monopoly being what, exactly? All companies have a "monopoly" in their own products, but it is not considered such for antitrust purposes, because a monopoly in everything is a monopoly in nothing. If you're referring to IP rights, you should know that the legal system disagrees with you, and patents and copyrights do not themselves constitute evidence of unfair competition of any kind, including monopolies--and that contrary to the sentiment, IP rights do not deny competition. You can always create a competitor to a copyrighted work, and patents provide their own market incentive: "the patent system, in fact, undermines the economic power of the first patentee by giving incentives to rival inventors to develop [...] other combinations." --Richard Epstein.

And the derivative market is?

Apple is at greater risk of a violation of the Sherman Act than usual, since they have terminated a licensing program

And you're reading this from where in the Sherman Act? Whether Apple has previously licensed software products is not relevant--nor is the fact that some of their products are licensed to competitors, e.g., iTunes.

Could be said they terminated an unprofitable business arrangement, but still leaves the door open wider for a Sherman Act claim than if they had never licensed the OS in the first place.

Not if the elements of the Sherman Act claim aren't satisfied in the first place. Neither their prior experience nor the technical capability are evidence of anything at all until after a violation of the Act is found.

The point being, I don't believe any of them had a perpetual license to bundle the MacOS with their hardware.

Correct. All the licenses were for System 7 specifically, and given the terms of the original license agreements, any such perpetual or subsequent license would have applied only to that manufacturer on PowerPC hardware and would be of no help today.

How many people would still buy Wintel machines with 3.1, versus the Microsoft PC with Win95, even if the Microsoft PC was more expensive and not as powerful?

People for whom price is a greater concern than the latest features. This is actually a quite common strategy in commercial transactions. It extends the life of old products that are still superior to the competition's newest original efforts, and allows competitors to innovate without threatening the market leader's R&D recovery (and in many ways, fosters dependence on the market leader, which can be beneficial).

 

[CWallace]

But Microsoft is actively working to deny people the ability to continue to buy Windows XP in order to force them to buy Windows Vista...

 

[JNB]

But Microsoft is actively working to deny people the ability to continue to buy Windows XP in order to force them to buy Windows Vista...

And the problem with that is? It's called End-of-Life, and a natural progression in any product line. How could you conceivably force a company to continue manufacturing or publishing a product beyond any given point? What about Windows 2000, or 98, or 95, or DOS? That's the prerogative and competitive mandate of any company, and certainly doesn't prevent any holders of current copies to continue using them.

 

[IJ Reilly]

Of some small interest perhaps, PowerComputing (and the other licensees) continued ability to sell Mac clones was dependent mainly on the completion of the Common Hardware Reference Platform, which both Motorola and IBM were working on. The final specs for CHRP were subject to Apple's approval, which was never forthcoming, for reasons which seemed at the time more political than technical. Apple had all the control they needed to end the clone experiment, more or less whenever they decided to, quite a bit above and beyond licensing terms. This introduces a strong counter-argument to those who'd point at the Mac clone experiment as evidence supporting Pystar's claims.

 

[CWallace]

And the problem with that is?

None that I can see.

matticus008 just noted that some consumers will forgo buying the new version if they don't find the feature-set worth the cost and will instead buy the older, cheaper version. And I was just commenting that manufacturers can deny the consumer that ability by End of Lifeing a product.

 

[matticus008]

matticus008 just noted that some consumers will forgo buying the new version if they don't find the feature-set worth the cost and will instead buy the older, cheaper version.

Indeed. However, if the older version is the same price, as it is, more or less, with Windows, the price incentive is canceled out and the consumer decision returns to the relative merits of the two products.

And I was just commenting that manufacturers can deny the consumer that ability by End of Lifeing a product.

Paradoxically, in the case of a company retaining control of both products (like XP and Vista), it's the EoL that actually causes resellers to drop the price in the first place, so it both creates and destroys that scenario.

 

[Stratus Fear]

Well, that's your opinion and you're entitled to it, but given the cries on Mac forums alone for an expandable Mac that isn't obsolete in 1-2 years, I'd say the possible market for a more traditional Mac (like the old PowerMacs) given the potential switchers from the PC market that clearly prefer such a case design is pretty substantial and it would be foolish to dismiss such ideas as 'ridiculous'.

"Cries of Mac forums" is the only place this kind of stuff really happens. "I see it on the internet" isn't indicative of a substantial market since the breadth of the internet that people form these kinds of conclusions on is usually limited to the handful of sites they go daily.

Asking a computer company for a more traditional computer design in the middle of the road price range or lower prices ranges (instead of only at the top in the professional priced category) is hardly asking for a 'jack-of-all-trades' company. Give me a break already.

Ok, so a company that has a certain successful business model should risk hurting it and go outside of its market and business model just because of the "cries of Mac forums?" That's not how business works. "Jack-of-all-trades" is the rest of the market. You can customize and cheapen the crap out of whatever box you want other than Apple's stuff (see why those are jack of all trades boxes?). Apple doesn't want to sell that, though, and they don't have to. And that they don't is likely indicative of "they don't need to in order to be successful."

Did you ever consider it is Mac OS X that sets the Macintosh line apart from Windows PCs and not the fact of sticking a computer in the back of a monitor??? Given their more traditional laptop is their number one seller and not the iMac, I'd say your supposition is lacking at best.

I don't think I ever supposed that Mac OS X had nothing to do with it. On the contrary, the package they offer is set apart from other OEMs by multiple things, only one of those being (but certainly including) the OS. What's your point?

Laptops are on the up-and-up in the entire market. Less people are using desktops as time goes on. I don't think says anything against the iMac on its own.

Given their only tower is over $2300 MINIMUM, there's hardly any evidence to suggest they wouldn't sell MORE computers if they'd offer something in that range as they once did.

It's not about selling more computers, it's about hurting their core business and going the route of making less $ per unit. The people they aren't selling to are the ones that only care about cheap, cheap, cheap crap (and the handful of enthusiasts out there). There's a reason they have a higher market cap than giants like Dell and that would be that they don't do the same thing as everyone else.

There are all-in-one cases in the PC World too and they don't sell and that's because given a CHOICE, most consumers prefer a more traditional design where you can actually fit your backup drive in your computer instead of all over your desk, thereby defeating the 'neat' design of the all-in-one entirely. This fact seems to be completely lost on Apple's design department.

I'd wager when looking at AIOs, most people wouldn't buy the Dell or such. They'd probably buy the iMac. What it's supposed to do in that form-factor, it does better. For most other OEMs, AIOs are not their core product, either, so that doesn't help them. Also, want to give us some statistics on where most consumers want a traditional design for backup purposes, etc.? It's pretty common knowledge that when you look outside of the internet that the standard joe doesn't backup and doesn't upgrade.

As for "defeating the 'neat' design of the all-in-one entirely," that's not really the case. By the time you add all the peripherals to a standard box to match what a lot of the AIOs have, you already have more cable mess than an AIO does with a wired keyboard, mouse, and one external HDD.

You say your argument isn't a fanboy one, but it sure sounds like one to me.

If this is part of your argument, then your argument already fails. Just because someone has a different opinion than you doesn't make them an Apple fanboy. I argue from a business standpoint.

I, for one, don't want a Windows machine as a primary computer or OS. I like MacOS X much better. But why should that mean I have to own some retarded design like the iMac just to use MacOS X? The whole point of Pystar's offerings is that they offer more bang for the buck and more expandability than ANYTHING in Apple's lineup. That's why there's a market for them.

You and the "cries of Mac forums," are interested, surely. I'm sure there are a small handful of people out there that wouldn't mind buying a Honda Accord with an Acura badge for $30k instead of an Acura TL for $40k, but Honda's not going to fill that market because it's insanely stupid. Businesses like something called product differentiation. Even better, they like to differentiate their entire line from their competitors if it provides them reasonable competitive advantage. If you don't like what Apple offers, you do have reasonable substitutes from other manufacturers. Just because Apple doesn't make a computer with the exact 38 components that you want doesn't mean you don't have choices.

All of this is really moot anyway since Psystar actions were illegal. Oh well.

 

[Sun Baked]

The government-granted monopoly being what, exactly? All companies have a "monopoly" in their own products.

Yes, all I was saying with respect to Psystar's silly claim Apple has a monopoly in this market Psystar has defined ... in a subsidiary market from the larger PC and OS market as a whole. They own an monopoly to their tiny little corner of the market, Macs and Mac OS X.

Sorry, should have used Psystar's subsidiary market definition. Instead of thinking "market derived from a larger whole" and using the other word.

And you're reading this from where in the Sherman Act? Whether Apple has previously licensed software products is not relevant--nor is the fact that some of their products are licensed to competitors, e.g., iTunes.

Apple had a Mac OS licensing program, they ended it ... this is leaving the door slightly open for Psystar's twisted logic.

Since that the clone licensing apparently created the Mac OS Capable Hardware Systems market.

Fast forward a decade to where Psystar that Apple is illegally tying the Mac OS to Apple-Labeled Systems, while excluding everyone else from the larger Mac OS Capable Hardware Systems market Apple created.

 

[MagnusVonMagnum]

Ok, so a company that has a certain successful business model should risk hurting it and go outside of its market and business model just because of the "cries of Mac forums?"

You just don't get it all do you? Offering a mid-range computer akin to a Mac Pro but without all the "pro" features like 4-8 Xeon cores is NOT "outside its market" for goodness sake. I won't even bother responding to the rest of your 'arguments' since they are all emotionally based instead of logic. It's sufficient to say that those of us that have used Windows and Linux in addition to OS X know the only substantial differences between a Mac and a PC lie in its OS.

Pretty cases aside (you can get very pretty customized cases in the Windows and Linux world you know), the hardware is all the same except that most of Apple's "desktops" are really "laptops" inside a flat screen monitor case. Desktops should use desktop parts which generally smoke laptop parts, which explains why the MacPro is so much faster in so many areas. The problem is the average consumer doesn't NEED pro-level parts like 4-8 Xeon cores. Apple could easily reuse its existing case with consumer level parts to offer an alternative to the iMac in the $1500-2000 range, but they choose not to because they make more money forcing you to buy a MacPro at $2300-$4000+. The only other headless Mac is the Mini and it's not even competitive to the cheaper iMacs. That's not a different market. That's a choke hold.

 

[Stratus Fear]

You just don't get it all do you?

No, clearly you don't understand. Apple doesn't compete in the sub-market you're asking for and won't! It doesn't work within their business model! It's as simple as that! The ad hominem statements you've made here as well are unwarranted -- watch it.

Regardless, I've used Windows and Linux at least twice as long as I've been using OS X, if not longer, and have built plenty of my own PCs, so I understand the want for a cheap, expandable box. At the same time, I don't pretend that's the majority of the greater computer market out there. It's not. Joe six wants cheap. Not expandability, not $600-fast video cards to play games, not extra hard drive bays to run backups onto. For those that can cross out the cheap, Apple has a great lineup. For those that can't, there's always the competition. For those that want the proverbial, enthusiast-level xMac, you're not a large enough market, sorry. Apple's selected the people they want to sell to, because they know how to make an excellent bottom line that way better than you can on the commodity, beige box PC front. End of story. Although, if you can get them to shift Mac Pro prices like CWallace suggested, then maybe you have something.

Also, don't make statements that you have no hope of backing up with any logic or evidence. Really, nice, suggestive crack there about Windows/Linux/Mac OS experience, but the insinuation behind it was uncalled for (and false). And, if your argument was done correctly, it'd acknowledge that, while internal hardware may be the same variety (of CPU, RAM, GPU, HDD, etc.) there's more that Apple does with their computers besides those things that set the Mac apart from the garden-variety PC. It simply isn't just the OS. There are other value-adds.

Pretty cases aside (you can get very pretty customized cases in the Windows and Linux world you know), the hardware is all the same except that most of Apple's "desktops" are really "laptops" inside a flat screen monitor case. Desktops should use desktop parts which generally smoke laptop parts, which explains why the MacPro is so much faster in so many areas. The problem is the average consumer doesn't NEED pro-level parts like 4-8 Xeon cores. Apple could easily reuse its existing case with consumer level parts to offer an alternative to the iMac in the $1500-2000 range, but they choose not to because they make more money forcing you to buy a MacPro at $2300-$4000+. The only other headless Mac is the Mini and it's not even competitive to the cheaper iMacs. That's not a different market. That's a choke hold.

You clearly don't understand the value-added points of each type of machine that Apple makes, nor the people they're intended to be sold to, and why, as a BUSINESS CASE (nothing emotional here!) Apple chooses low-volume, high-margin upper market products (all except the Mac mini, perhaps) over your beige box. The parts inside are hardly the main point -- lots of people on forums don't understand that the geek specs aren't everything (cars aren't only made of engines!). Your little spec comparison there is pretty irrelevant in the grand scheme of Apple. For the most part, they only need to differentiate between consumer and pro, and they do. Other things about their machines besides processor type take it from there. Not to mention -- the reason the iMac gets "smoked" by the Mac Pro is because it uses workstation parts. Last I checked, that was in another league than desktops.

If they really wanted to sell mid-range and low-range generic boxes, they'd become a high-volume, low-margin company like Dell, HP, et al. But that's an entirely different type of business, and if one takes a look at the greater business world, it's not hard to spot these two different approaches in other industries -- not just this one. As Apple's strategy is, moving away from what they're currently doing would only end up diverting their resources away from more lucrative products that they sell (and fighting for pennies on commodity boxes is not lucrative! the high margins on their other products are). They aren't set up to compete solely on market share and price. Thankfully, there's more dimensions to competition than that. Unfortunately, many people don't realize that. So, if you honestly think that Apple can move into churning out super-mass produced generic boxes and not have a harmful restructuring of their business, I've got a bridge to sell you. Furthermore, if you think they'll sell enough $1500 enthusiast boxes to "cries of Mac forums," I've got three more to sell you. But I hope you don't actually need bridges.

If you want to continue the argument on CASES, go right ahead, but there's more cases than "pretty" just as there's more to computers than CPU/RAM/HDD/whatever. Overall good design, integration, attention to typically neglected pieces of hardware (what beige boxes typically come with H-IPS screens? Apple sells these on the 24" iMac and cinema displays) are all important parts that are being ignored here that Apple pays attention to, among other things. Apple has no reason to compete directly against those products that typically ignore that and where the calling price is "cheap."

The position they take now is good for themselves and the greater PC market. It brings other options to the table by a company that executes them well.

 

[matticus008]

Sorry, should have used Psystar's subsidiary market definition. Instead of thinking "market derived from a larger whole" and using the other word.

Ah. Okay.

The problem with defining a "subsidiary" market which consists of a single product is that there is really no such market. In their complaint, they freely admit that their computers are compatible with Windows, Linux, and other desktop-class operating systems enabling full use of the hardware they sell. They've as much as made Apple's case for them regarding substitutes, and the idea that there is no competition between Macs and Windows makes one wonder who Apple is advertising to in its Mac vs. PC commercials, given that it has achieved 100% saturation in its "market" if you believe Psystar.

Apple had a Mac OS licensing program, they ended it ... this is leaving the door slightly open for Psystar's twisted logic.

But how? The licensing program was for a different product on a different platform.

Since that the clone licensing apparently created the Mac OS Capable Hardware Systems market.

I believe the "compatible hardware systems" market as defined in the countersuit are those systems with hardware matching current Apple products--Intel processors on Intel chipsets.

You just don't get it all do you? Offering a mid-range computer akin to a Mac Pro but without all the "pro" features like 4-8 Xeon cores is NOT "outside its market" for goodness sake.

Technically, it is outside Apple's market range. A consumer desktop tower is not a market segment in which Apple competes. Apple doesn't have anything resembling a Dell Dimension. The point you want to make is that offering such a machine is not outside Apple's capacity or expertise. Apple does, however, choose not to compete there, and that's really the long and short of it.

It's sufficient to say that those of us that have used Windows and Linux in addition to OS X know the only substantial differences between a Mac and a PC lie in its OS.

Which goes to show that while inherently distinctive, there is nothing market-defining about OS X or Macintoshes and thus no actionable conduct. You can use Windows, a Linux distro, or any of the boutique operating systems.

most of Apple's "desktops" are really "laptops" inside a flat screen monitor case.

Not that old chestnut. What is the value in the distinction except to prove your opponent's point? Apple uses high-end workstation and mobile CPU packages. Isn't that a sign that they're not interested in desktop towers? The heat and power specifications of the Santa Rosa platform is ideal for an application like the iMac.

The performance gap is not what it used to be. Not by a long shot. Interestingly, a benchmark of an "Open Computer", using "desktop" hardware illustrates this point nicely: it's basically matched with a MacBook, using "mobile" hardware. Where's the beef?

The MacPro is considerably faster because it's a workstation, not because it uses "desktop" parts.

but they choose not to because they make more money forcing you to buy a MacPro at $2300-$4000+.

Doubtful. The MacPro is their worst-selling model for consumers, just as it should be. I would find it hard to believe that anyone would spend double the cost of an iMac for the questionable benefit of being able to potentially upgrade the video card at some point in the future.

It's just not what they want to sell, and it's their decision, no matter how frustrating that might be for would-be buyers and greedy profiteers waiting with open cash drawers.

 

[TiggsPanther]

It's sufficient to say that those of us that have used Windows and Linux in addition to OS X know the only substantial differences between a Mac and a PC lie in its OS.

Actually, I'd say the choice of hardware can also be pretty significant.

I'm not only talking about the CPU or the graphics, either. I'm talking about the motherboard. And, in the case of machines wanting the extra ports, the additional ethernet and USB cards.

Cheap PCs, of the type that the non-discerning non-techie user will tend to buy, quite often have had cheap motherboard and/or USB chipsets. And these have caused issues in the past with both Windows and Linux.

Unless they had a very limited reference model to go by (which would probably still have some cost-cutting suppliers crying foul...), there would end up being some pseudo-Mac computers out there with flaky chipsets. And these would likely be the ones that the bargain-seekers ended up with.

Yes, I do think that some of the current Mac lines (Mac Mini...) are woefully underspecced. But I also know that they are pretty robust, reliable, and don't suffer from flakiness anywhere near the extence that cheap PCs have caused me in the past. (We have two "current" Mac Minis in the office at work)

 

[Sun Baked]

But how? The licensing program was for a different product on a different platform.

I believe the "compatible hardware systems" market as defined in the countersuit are those systems with hardware matching current Apple products--Intel processors on Intel chipsets.

The Psystar lawyers are tying it back there, as a pattern of behavior revolving around not licensing the OS ... and how Apple currently embeds code in the OS to recognize Apple-labeled system and Kernal Panic when run on another System.

Guess it is the Dr-DOS defense and how the Mac is limiting itself to Apple-labeled HW when it is fully capable of running on other systems.

 

[IJ Reilly]

The Psystar lawyers are tying it back there, as a pattern of behavior revolving around not licensing the OS ... and how Apple currently embeds code in the OS to recognize Apple-labeled system and Kernal Panic when run on another System.

Guess it is the Dr-DOS defense and how the Mac is limiting itself to Apple-labeled HW when it is fully capable of running on other systems.

I don't get your DR-DOS reference. DR-DOS was always fully capable of running on IBM-PC systems. What Microsoft did was create error messages in early versions of Windows 3.0 which implied that it could not run properly on top of DR-DOS, even though it could. This situation was vastly different, in that Microsoft was attempting to keep a competitor, Digital Research, off of PC hardware. That's not all they did. In Europe at least, where DR-DOS was still quite popular during the '80s, they told the largest manufacturer of PC hardware that in effect they needed to choose between DR-DOS and MS-DOS, that they could not sell both. Now there's an antitrust law violation.

Anyhow, the argument that Apple must allow OSX to run on generic PC hardware because it's technically feasible is extremely dangerous if accepted. A lot of copyrights and patents require only trivial effort to violate. Difficulty is not a relevant test.