Comparing Microsoft with Apple is valid because for years, pundits have been insisting that Apple needed to adopt Microsoft’s models. Instead, Apple has proven that its original model can work and work better than Microsoft, while Microsoft has been proving that its Windows windfall can’t be duplicated in media players, smartphones, and in other areas.

The most accurate comparison you’ll likely find, even though Apple is catering towards mass consumers instead of the enterprise, is Sun: they design and manufacture their own hardware, and write their own software, all of which is to gain sales of the hardware they design and build for the TUE, though there’s a difference that Sun does a bit more in terms of consulting than Apple does, and also, Solaris is available for free to all comers, as opposed to being locked down to Sun hardware exclusively.

Now, when you compare the two, Apple is definitely beating them hands-down for profitability.

[Problem is that Microsoft's differed revenues have been in play for so long that their GAAP and non-GAAP figures aren't any different. In a few years, Apple's won't be either. But they are today, so no, it's not a false comparison at all. ]

I really am not overlooking the profit from Mac sold. Licensing involves risk for sure. And yes the effect you are talking about did occur with the clones and a similar scenario would occur now too. That is the cost – Apple’s hardware business would be certainly exposed to more competition – no way around it. And I also agree that Mac Pro’s would be especially vulnerable.

All that having been said, the point is that there is also a significant upside to be considered. More hardware competition but also revenue from the sales of other companies, that side of the business is hard to measure since it does not exist today. If Macs have 3% globally, the addressable market for OSX is 33X current sales. That is a pretty huge market compared to what they are doing now, as good as things are, as rich as the offerings are now. There are not a lot of companies who have a product that could reach a 33x market who do not take it there.

While some hardware sales would be lost, there would potentially be new opportunities for Mac system sales. Consider corporate sales. An IT department that switches to OSX might also buy a bunch of Macs to go with their existing systems. People experience OSX at work and buy a premium machine for home. Executives buying OSX machines. If iPod and iPhone have a halo effect, imagine that of OSX for Mac hardware.

Also, if what you say is true, and Linux does ultimately replace windows, then its even harder for Mac to have a role in the future. Do developers and consumers really want to support 3 OS’s? I’d rather have OSX out there as a commercial option than not.

I am not saying Apple will do this, its a leap and I think they are drunk on the success of the Mac and everything else they do. Still I think they have successively over a long time made moves to create it as an option.

Hmm…

The main thing you overlook is that Apple makes a whole lot of profit from every Mac sold. Microsoft make a lot less per PC. For Apple to start making money from licensing OS X, each lost Mac sale would need many licences gained in order to pay for it. It’s not as simple as just making money from software sales: the highest concentration of demand for generic hardware running OS X would be from people who are buying Macs today. Mac Pros in particular would bleed from the non-Apple branded xMac below.

This all happened before of course. All the cloners concentrated on pushing out generic, barely designed, but very competitively priced desktop hardware, often outperforming Apple’s own high end kit. Any licensee would 100% do the same. Why compete with Apple’s strengths when you can go the Dell route instead? The trouble then would be that Mac hardware sales would be under heavy pressure even if the OS X market as a whole was growing. Apple would be doomed to become the new Microsoft.

I certainly agree that this is less of a zero-sum game than it was during Apple’s dark days in the 1990’s. But I recognise that the risk is still very real. Too much so to trade for the blazing success Apple has on its hands using the polar opposite strategy today. And doubly so in a dodgy economy where consumers are increasingly looking for price savings anywhere they can get them.

The dream of being able to buy your own highly customised Mac from among a range of manufacturers is just that and will remain so. It would be nice for us on the buying end, but a nightmare for Apple which would suddenly be exposed to competitive, homogenising pressures it doesn’t want or need.

If you want something other than Windows on that custom box: Linux is where it’s at. Maybe one day Google or HP or someone else with a vested interest will make it the successor to the old and rotten Windows empire. I’m just sure it won’t be a licensed generic OS X.

I was talking only about their PC business, not iPods or iPhones so the 90% does not apply. Of course they are hardware dependent. The question is will they remain that way.

Who said that Apple would drop hardware or software? My argument is that licensing the OS could be compatible with their hardware business.

I am well aware of the history. How well does it apply to today is the question? OS/2 and NeXT happened when Windows was in a position of growth and strength. Also, MSFT had more market power, most of which has been striped from it by litigation. PC makers were strong armed not to offer another OS even if there was customer demand, which there wasn’t

Today is very different. Consumers and PC makers are desperate for an alternative to Windows. OSX is much richer than Linux. All three will proceed. The question is: is it better in the long run for OSX and its software developers to be limited to one brand of hardware?

Yes, indeed its true that Apple has succeed with the whole widget. You are correct there. We’ll just have to see where they go with it. The whole widget thing certainly applies to the iPhone and the iPod. It just seems to be that 10.6 with its tight Exchange integration, its jettison of all PPC code and its optimization would make a great licensed OS for Core2Duo and later Windows hardware. Sure it would change Apple but it would also move it into the center of the action, a position we seem to be seeing more and more from the company.

At least 90% of Apple’s income is from hardware sales: be it Macs, iPhones or iPods. They take their cut from iTunes and the App Store, and have some discrete software business going on with Mac OS X updates and the iLife/iWork and Pro apps; but compared to any other company with as much action in software Apple is unique in being so hardware dependent.

Apple is indeed unlike Microsoft or Dell. It is in fact a poor fit for working with either. Apple’s strength is the “whole widget” thing, vertical integration, a complete experience. Apple dropping either hardware or software is so counterintuitive and runs against the company’s genes as to be the ultimate computer industry pipe dream.

There is a persistent demand outside of Mac users for OS X on generic hardware. But is that market big enough and lucrative enough to be worth the risk which was exposed in the clone wars of the mid 1990’s? Not a chance. The PC industry already has Linux as a Windows competitor and the uphill struggle that has encountered is the ongoing epic of our age!

The truth is: OS X was already offered to the x86 mass market, years before it even became the heart of the Mac. NeXT’s history with OpenStep (and rival Be’s disastrous downfall with BeOS on Intel) speaks volumes for those who try to be a better Windows than Windows. (To borrow a phrase from IBM and OS/2, yet another notable piece of roadkill.) Just because Dell and others are realising the Mac is more attractive than pumping out Vista boxes does not mean Apple could suddenly become the new Microsoft, even if that was its aim. These days, you get the feeling that even Microsoft doesn’t want to be Microsoft. Not for too much longer anyway…

I for one don’t think Apple would lose that much hardware sales if they allowed OSX on other PCs. Ask yourself what your next hardware purchase would be if you could choose any maker? Bet its still Apple.

Also note that when Dells sells a laptop Apple gets nothing from that purchase. If it sold with OSX, besides the license fee, there is a lot of potential upside to Apple. Software, services and the potential of a follow-on hardware purchase.

Sure Apple is doing amazing, who can argue with that. But its not as cut and dry as some may want it to be.