Friday, September 12, 2008

HP considering making its own OS to counter Vista

As reported by Engadget:

HP said to be considering making its own OS to counter Vista

HP unsurprisingly isn't ready to touch this one in any sort of official way just yet, but BusinessWeek is reporting that at least some folks at the company are "exploring the possibility of building a mass-market operating system," which would be positioned as an alternative to Vista. That OS, as you might have guessed, would be based on Linux, although BusinessWeek's sources say it "would be simpler and easier for mainstream users." By all indications, however, this so-called "skunk works team" within HP doesn't seem to have moved much beyond the brainstorming stage, and HP is sticking strictly to its official line that it is more interested in "innovating on top of Vista," with HP chief technology officer Phil McKinney even going so far as to say that the idea that it's funding a huge R&D team to go off and create an operating system "makes no sense."

This continues the backward thinking of "the other guys" - they don't know who their competition is.


I am a lover of children's literature said...

This proves one thing to me, that Apple should consider seriously licensing OS X. Any lost hardware sales would be more than made up in OS X fees and by offering OS X, as many computer vendors have been begging for, it would, I think, completely blow Windows clear out of the water and help prevent Linux from getting a foot hold!

Apple could allow others to take over the low end manufacturing of Macs, and keep for itself the premium side of the market.

FYT said...

I completely disagree ...

This indicates to me that what Apple is doing is right.

Apple's hardware business is a 30% + profit margin.

That currently accounts for 54% of their profits.

The average Mac sells for $2000 with an average 30% profit.

Mac OS X is at best a 40% profit margin (after R&D, etc) and costs $129.

That would be a lot to make up.

My guess is cannabalization just like the clone market did in the 90's.

Paul Douglas said...

I agree 100% Philip. And beyond that, Apple does not need the headache Microsoft has of supporting multiple vendors using various commodity parts.

Apple's Macs are built, ground up, as a complete system aimed at the higher cost market. To retroactively spin Leopard, or Snow Leopard, out into commodity computers as a licensed product would never work. Apple is simply not big enough to handle the burden and by doing it they would stifle their ability to grow to meet that burden because they would be making less money.

I really don't now why this idea is cropping up so much lately. Apple is proving their way works. Macs are now one of the top 3 personal computers in the US. OS X touch (AKA iPhone OS) is the smartphone market's hot property and is capturing 4-9% (Weekly) of O2's sales the highly competitive UK handset market even before Pay/Go, crucial to the region, is launched. And of course, iPod is the world number one personal media player.

All successful, massively profitable products whose sales are growing. All making use of Apple's proprietary business model for hardware/OS. Meanwhile, most Microsoft's various licensed products are circling the drain. Windows Mobile is being eaten by RIM and Apple & Sandisk are eating Microsoft and their partners' lunches in PMPs.

So by what metric should Apple switch from a business model they know and are good at which is driving growth to one which is impractical for them and failing in the marketplace?

Anonymous said...

Apple would be very smart to explore a collaboration with HP that would involve exclusive licensing of a version of OS X that would eventually lead to an operating system that would run both Mac and PC applications seamlessly.

The R&D departments at HP combined with those at Apple would compose the powerhouse that could topple Microsoft.

How would Apple make up for the loss of hardware sales? Again, by leveraging the resources of HP they could lower their own cost of material acquisition, strengthen their distribution chains, and gain valuable advertising revenues.

How do you think Microsoft became the company it is? They don't concentrate on hardware at all and the pittance of income they receive from XBox and Zune sales pales in the wake of their software licensing. If Apple and HP came up with a clear winner that would run both platforms they would instantly stand to make billions in profit the first year as people fled the Vista nightmare.

Ultimately what makes Apple Apple and an Apple box unique is the software. Certainly there are design and quality issues but HP has good design and quality also and would benefit even further by Apple's influence.

HP has managed to be a leader in the industry despite multiple other competitors having the same hardware and software. Ultimately Apple would retain its lead as well.

Software, once its initial cost is paid for, is like printing money. There is minimal cost in churning out the disks and packaging. It is almost ridiculous to say that Apple shouldn't shift their prime initiative to software sales.

Yes, Apple is profitable now. They have maximized the process of doing their own thing and being profitable at it. They could take the next step up and be even better.