Macintosh Clone Debuts Amid Questions Over Software Rights

Psystar Inc., a Miami company, has begun selling a $400 computer based on Apple Inc. (AAPL) software. The move, as brief as it may last, hints at what life would be like if Apple made its software available to other computer makers.

What Psystar is providing is a blank slate of a computer with all the bare essentials, and which comes pre-loaded with Apple’s Macintosh Operating System, version 10 or above. Operating systems are indispensable software used to operate key computer functions.

This is not the first time Apple has faced clones, cheaper knockoffs based on Apple’s Macintosh software. The last big wave occurred in the late 1990s when Apple was licensing its software to computer manufacturers.

What’s different with Psystar’s new $400 computer is that it appears Psystar has not licensed Apple’s software to distribute in this way, nor does it appear Apple’s begun after more than a decade to sell its software to manufacturers.

As a consequence, rumors are rampant that Apple will try to stop the company for allegedly violating Apple’s rules about distributing its software.

Apple may have already stepped in. The Psystar computer was introduced Monday under the name Open Mac. But by Tuesday morning, and for reasons that neither company would confirm, the computer’s name was changed to Open Computer. The activity suggests Apple applied some kind of pressure, legal or otherwise, but a source at Apple could not confirm that.

Meanwhile, the Psystar computer has helped fuel new debate about the merits of buying a Mac clone. On the one hand, they are much cheaper. At $400, the Psystar box is a quarter of the cost of Apple’s Mac Mini, the Apple computer most like Psystar’s.

But the clones won’t look like an Apple design, and won’t come with the array of typical Apple services, components, and even some features like wireless connections.

“Apple clones are always cheaper because Apple does not use second-rate components, assembly, testing or packaging,” wrote an Apple fan on an Apple- focused Internet message board, who echoed the sentiment of many others. “Yes, you pay for the brand - but look what stands behind it.”

Psystar’s move seems to be resonating, that’s for sure. Aside from a plethora of publicity the new computer’s generating, “sales of the computers are going really well,” said a person taking sales orders on Tuesday. Repeated requests for interviews or comments through more official channels at the company were unsuccessful.

An Apple spokesman had no comment.

Perhaps the best known of the other Apple cloners was Power Computing, which licensed Apple’s operating system in the late 1990s when Apple was open to doing so.

Founded in 1995, Power Computing shipped 100,000 Apple-based computers and racked up sales of $250 million in it first year of business. In 1997, sales reached $400 million. But the return of Steve Jobs to head Apple following a multiple-year absence all but killed the Apple software licensing business. At the time, Power Computing executives boasted of stealing share from Apple.

By September 1997, Apple bought Power Computing for $100 million in Apple stock and shuttered the Mac cloning business.

-By Ben Charny, Dow Jones Newswires; 415-765-8230; ben.charny@dowjones.com

(END) Dow Jones Newswires
04-15-08 1959ET
Copyright (c) 2008 Dow Jones & Company, Inc.


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