A year on, Psystar still defying Apple

One year ago, an otherwise sleepy April in the Apple universe was turned upside down by a tiny company from Southern Florida, kicking off a real-world Clone War between Apple and Psystar.

Today, the essential question regarding Psystar is unchanged: does the company have the right to sell computers with Apple's Mac OS X Leopard preinstalled, as it has been doing since April 14, 2008? Psystar set off shock waves through the Apple world that week, as an army of journalists, bloggers, fanboys, and detractors set off on a manic search for anything and everything related to the company and its desktops.

Psystar emerged a year ago as a small independent system builder, the likes of which can be found in any medium-size town in the U.S. What provoked the interest and ire of the Mac community was Psystar's decision to ship so-called "white box" systems with Mac OS preinstalled alongside systems with Windows Vista and Linux, in defiance of Apple's licensing policies for that operating system.
Psystar recently updated its flagship product, the Open Computer, and CEO Rudy Pedraza promises that more products are yet to come.

In an interview, Pedraza acknowledged that the past year has been quite a challenge, but he's glad that at least so far, Psystar has been able to provide an alternative to Apple. "(Our customers) are people who would otherwise be unable to afford an Apple computer, and they are just happy about it."

Whether or not Psystar sees another anniversary will depend in large part on legal wrangling in Northern California, far from Psystar's Doral, Fla., headquarters. The litigation between Apple and Psystar appears to be in a bit of a lull as the one-year anniversary passes, with lawyers immersed in the discovery phase of the trial following months of lawsuits and countersuits from both companies.

Apple's stance is pretty clear: the end-user licensing agreement that comes with Leopard forbids the user from installing that operating system on anything other than an Apple-labeled computer. Psystar, on the other hand, is attempting to argue that Apple is abusing its copyright on Mac OS X in requiring the operating system to run on Apple hardware after Psystar unsuccessfully tried to lodge an antitrust defense.

Little has changed on the legal front in recent months, but it seems worthwhile to take a step back and look at how Psystar has, and hasn't, changed the nature of the computer business. First off, Psystar does not appear to have made a huge dent in Apple's Mac business.

Mac desktop shipments have indeed slipped since March 2008, from 856,000 units in the quarter ended March 2008 to 728,000 units in the quarter ended December 2008. But Apple and analysts attributed that decline to three main factors: an aging iMac lineup (refreshed in March 2009), the ongoing shift in consumer preferences from desktops to notebooks (Apple's notebook shipments increased 17 percent over that time span), and the general slump in the economy that took hold in the second half of 2008.

Psystar will not release sales figures, but Pedraza said that sales have exceeded his expectations to date. Pedraza said the company is still planning to release a notebook, but hinted that it might be something more along the lines of a Netbook rather than a full-sized notebook.

What Psystar has accomplished is to prove that a Mac OS computer that was not designed by Apple can deliver a satisfactory experience. CNET was one of the first to order an Open Computer in April 2008, and I've been using that machine as my primary work system ever since with few issues.
It's certainly not perfect: while I've been able to download every update to Leopard released since last April, I have not always been able to download and install updates for Apple application software through Software Update, such as iTunes and iLife. If something goes wrong with the OS, I'll have to venture down a complicated restore process involving a second installation CD that likely contains the magic files Psystar needs to bypass Apple's restrictions on where Leopard can be installed. And needless to say, the Open Computer is not the sort of thing that makes an IT department all giddy.

Still, the Open Computer is otherwise an almost identical Mac experience to the MacBook Pro I use at home. When it comes to reliability and service, Psystar may not be able to compete with Apple, but for people who know their way around a computer, the Open Computer is a Mac.

And that could have huge ramifications for the software industry if Psystar is able to overturn Apple's end-user licensing agreement, which could usher in another Mac clone era just when the operating system's popularity is arguably at an all-time high. The first Mac clone era did not go well for Apple, and it's not hard to see similar problems occurring if the perception of Mac OS X as stable and reliable start to wane as it is forced to interact with hardware for which it was not designed. Already, Psystar imitators such as PearC are trying their hand at the market.

An awful lot has to happen before Apple has to worry about anything like that. Psystar is a clear underdog against Apple, and the trial is not scheduled to begin until November.
But the Little Mac Cloner That Could is a year old this week, and is continuing to sell Open Computers under Apple's nose. How many more years does Psystar have?

Tom Krazit, a staff writer for CNET News, writes about the evolution of personal computing with a special focus on Apple and the smartphone revolution. He has covered traditional PC companies such as Dell and Hewlett-Packard, chip companies such as Intel and Advanced Micro Devices, and mobile computers ranging from Research In Motion's to Palm's. E-mail Tom.

(via CNET)