Should Apple license its operating system or should it keep its revenue spinner close to its chest?

Rethink IT, March, 2005

Phil Leigh of publication Inside Digital Media has been floating the idea for some time that maybe it's about time that Apple licensed its operating system to both Hewlett Packard and perhaps to Sony, and any other major corporation that thinks there's a business in the Mac format. He produced a huge column on it last month.

Leigh's work is both thought provoking and attractive, but it doesn't always hold water at the practical level. His assumption is that either company would want to license an operating system that only shifts about 3% of the PCs in the global market, or that Sony would like to support a product from the company that has taken away its leadership in portable music players.

Also, who's to say that Apple would be any better a master of the PC industry than Microsoft? But perhaps if instead of being master, it was just a second way, then he may have a point.

Remembering that Apple did not want to license its operating system back in the 1980s, Leigh feels that the dissatisfaction with Windows XP's security is a key issue and makes a case that Apple has a second chance. In truth, this is more an argument for any form of desktop Unix or Linux. Remember, Apple's OS now sits on top of Berkeley Standard Distribution Unix.

Some of his points ring true. PCs are becoming more media-centric and that's what the Apple architecture is best at, whereas the Wintel structure is better for office applications.

He also argues that both HP and Sony have lost their way in PCs, although that's a bit strong for either of them--HP may be losing ground to Dell, but it's successful enough, while Sony's miniature XBlack screen PCs are enjoying a renaissance this year.

If HP has a problem competing with Dell because of its 'direct' shipments and build to order, then the answer is surely to ship directly and make to order, not make something else entirely.

Leigh also argues that the Apple brand would not be weakened with partners of this type, with strong brands.

And finally, he settles on Spyware and other malware that runs on PCs but does not currently plague the MAC.

If Apple ever got to the stage where it constantly sells out of Macs, then this might be a plan worth pursuing, but right now it would just cut its own revenues by licensing the OS. In order to run an intellectual property business in operating systems, Apple needs to be out of the hardware business and that doesn't look like happening any time soon as it would cost the company too much. Now if it actually 'sold' its hardware arm to one of these two companies, that might make it feasible, but then again the reason that Apple can design products like the iPod so well is because it has all that PC design talent lying around, making the technology dance.

But there is much appeal in seeing Apple develop a new front, using the momentum of its iPod success to take it into new areas, but Rethink IT thinks those areas should be consumer electronics areas.

Apple's doing a great job with the iPod and it needs to protect its Mac revenues, but Apple might build a reference design for a DVR, using technologies like Firewireless to stream to flat TV screens, which it could also design with its inimitable style.

Apple's devices will look more at home in the living room than any other PC maker's and it should be working on taking the iPod sheik and bringing that to DVRs, DVD players and the humble TV.

Both HP and Sony could do with the help on these fronts just as much as they could on the PC and may well license these products.