Should Apple License Mac OS X To Dell, HP?

The headline thought raises an ugly head every year. Now that Mac OS X runs on Intel-based machines (also known as “Macs”), is it time for Apple to consider licensing OS X to Dell or HP?

If you think that’s a controversial consideration, then think of the swirling issues surrounding the notion of Apple’s famed OS X on a plastic PC.

Does market share matter? Why would Apple implement a licensing plan that directly affects their own hardware sales?

Dell is struggling, missing revenue and profit targets, and has a slipping market share. Why should Apple help out?

License Mac OS X to Dell or HP? What’s in it for Apple? A $50 license fee for each PC with OS X?

Those are good questions with never ending fodder for consideration and debate.

Lurking below the swirl is the whole “Apple should have licensed the Mac” back in the 80s issue, which gave the market to PC makers and Microsoft (more on that one, later). 

What’s the problem? It’s Apple. Apple sells Mac OS X (and other software designed to run only on Macs and Mac OS X, and some Windows applications).

To complicate the situation more, Apple sells Macs—the hardware upon which OS X resides.

Who else does that? Not Dell. Not HP (their Unix and Linux offerings not withstanding, as those unit numbers are small potatoes).

Nobody sells the whole end-to-end widget. The hardware. The operating system. An attractive package of applications (iLife, et al).

Among significant manufacturers, only Apple makes the hardware and the software.

Microsoft? Come on. They make their money selling a second rate operating system—Windows—and a suite of applications from Office to servers to tools. Xbox doesn’t count in this situation, and besides Xbox loses money for Microsoft.

Dell? HP? They sell boxes with someone else’s operating system and applications. What value do they bring to the party besides cheap?

PC Magazine’s Jim Louderback is the latest to bring up the premise, “Apple should license OS X to Dell”

Sophomoric thinkers, Windows users, and headline trolls love the topic. Consider Louderback’s latest headline:

“Will Apple Miss Its Biggest Opportunity Yet?” That was followed up with an equally astounding and ridiculous premise:

“The time is ripe for Apple to trounce Microsoft once and for all, if only it could sidestep its own ego.”

From there, it’s pure blither, blather, and blah blah blah, as the same old argument is regurgitated for the umpteenth time. “Apple blew it by not licensing the Mac, and they’ll blow it again (with OS X, or the iPod, or whatever—they’ll just blow it).

See? Sophomoric. Simple thinking. Emotional argument with little substance. Remember, this is the same guy who calls the Mac faithful “odius” and Macs overpriced.

Let’s see. Apple’s stock is trading in the high $60s and market capitalization, a measure of a company’s worth to the stock market, is higher than Dell.

Profits and unit sales and revenue are at record levels. What would happen to all that if Apple licensed OS X to Dell, and Dell started selling it in $499 cheapo PC boxes?

Amazingly, many people would buy the Dell PC with OS X and not buy an Apple Mac running OS X. Duh. So, Apple makes $50 on the Dell sale, and not $600 on a Mac mini sale, or $1,299 on an iMac sale.

Math skills are apparently not a requirement as a journalist for PC Mag wag like Louderback.

The premise of selling OS X on Dells has disaster written all over it. Mac hardware sales would drop. Yes, people would still buy Apple’s Macs, but people would also buy Dells running OS X instead.

Apple loses the hardware sale while making a software sale (at a wholesale price). How again is that good for Apple?

But market share would increase, right? Market share of what? Macs? Macs are a combination of hardware and OS X, the software on the hardware. That’s what makes Apple unique and so satisfying to Mac users.

Perhaps the market share of OS X would increase if Dell, HP, Lenovo and friends could sell OS X on cheap PC boxes. The cost to Apple would be lower hardware sales, thereby reducing the market share of Macs, the hardware part. Apple fell off that bridge once before. It won’t happen again.

Louderback couches his argument by saying Apple could certify PC box makers to build machines specifically for OS X, thereby escaping the $499 market which would cannibalize Apple’s Mac hardware sales.

Nothing changes the ridiculousness of the premise. High margin, high revenue Mac hardware sales would suffer, even while OS X’s market share increased.

If I remember correctly, Apple tried licensing back in the 1990s under CEO Gil Amelio. Didn’t Steve Jobs characterize that event as brain dead? It still is.

Louderback also says, “I’m not sure the company’s own ego will allow itself to embrace the opportunity. But—Apple, are you listening?—now is the time to seize the day.”

Microsoft sells Windows and Office and makes money on both. Dell and HP sell hardware. All are successful and sales leaders in their own market. So is Apple.

The Mac maker is number one among manufacturers of hardware and software, and area where Dell, HP, and Microsoft don’t compete.

So, what’s behind Louderback’s resurrection of a totally flawed shift in Apple’s politics? Web site hits. Controversy. Self promotion. Oh, one more thing.

ThinkSecret. Nick DePlume, editor of the popular Mac rumor site (not so accurate and quick to reveal secrets and spread rumors since that whole lawsuit thing with Apple last year) will now write for PC Mag.

What better way for a PC Mag wag to stir up the dust, get plenty of web hits and Mac readers, than to say Apple’s missing a chance to trounce Microsoft.

As Jim implies, “Oh, and come back to PC Mag because we have a new wag and he has all the cool Apple news and views.”

Maybe Nick can teach Jim a thing or two about math.