Apple computer: Is Piracy the Pathway to Profits?

If you remember the heady days of the first incarnation of Napster chances are you downloaded a song and later discarded the foul bit of pop. Chances are also pretty strong that you downloaded a song and ended up buying the compact disc from your local music store. For me the discarded song was Come on Eileen by Dexy’s Midnight Runners. I am sure the music industry chalks that up to a lost CD sale, but honestly, there was no way I was ever going to buy any music by Dexy and his intrepid band of late night dashers. On the other and when I downloaded Devil’s Haircut by Beck I went out and actually purchased the entire CD.

The above is a simplification of how piracy can actually move product. Chances are very good that without the illicit download one less copy of Odelay would have been sold. So, for no great investment on his part, Beck sold one more album that he normally would have thanks to being pirated. Software companies have understood this concept for quite some time. They will grudgingly put up with piracy if it sells more copies in the long or if it prevents a competitor from gaining a foothold. Say, for example, some company produces a legitimate competitor to Adobe Photoshop. The new product feature all of the pixel manipulating goodness of Photoshop but retails for half the price. In basic economic theory the new product would soon displace Photoshop as the image editor of choice. In reality that is not necessarily the case. If Adobe Photoshop gets passed around on P2P sites there is no incentive for theft happy users to try the new competitor, both are stolen and to the end user stolen=free. Years later the one pirate removes the eye patch and becomes burdened with kids and full employment. Suddenly spending hours on the internet looking for registration codes and illegal copies no longer holds the same appeal, it has become easier and safer just to purchase a legitimate copy.

Which brings us to the question of Apple computer and piracy. You, as a reader of fine Apple oriented commentary, are no doubt aware of the recent announcement that Apple is switching to Intel. This has some interesting ramifications, one of the foremost is that you will now, in all probability, be able download a copy of OS X on a P2P site and run it on any plain vanilla Wintel box by employing some sort of hack. To many Apple fans this is a nightmare scenario. “Why” they wonder “would anyone ever buy another Mac if they can run OS X on a Wintel box?”

Before considering why people might still buy Macs even if they could hack a Wintel to do the job let us consider the benefits of OS X piracy. For years interested parties have heard people complain: “Macs are too expensive.” At this moment most people are thinking about only of the retail price. This is a mistake, the cost of Macs to a fence sitting switcher encompasses much more than the price tag. To get in the world of Mac you have to be willing to take a massive leap of faith. You must be convinced that a Mac will serve all your computing needs admirably and you probably have to accept that as a truth without extensively using a Macintosh. It is also wise to remember that for most computer users it is an “either/or” decision, not many have the resources necessary to grab a Windows for safety and a Mac just to decide if it a suitable OS. Faced with a decision like that it is not hard to understand why people, time and time again, choose the OS with the greatest amount of familiarity. With rampant piracy suddenly this is not an issue. People can play with OS X on their Wintel box and make an informed decision when they make their next computer purchase. It is not hard to imagine that actually being able to use OS X for a significant period of time might result in more switchers than Apple’s ads ever dreamed of producing.

Here one suspects Apple will face a careful balancing act. If hacking a PC to run OS X is trivially easy then sales will certainly suffer. If OS X is uncrackable then Apple is basically in the same boat they are now.  How does Apple balance these two opposing issues? Why by making the developer version trivial to install on a PC and each subsequent version very difficult. It appears the first phase may already be in place. There are currently rumors of the developer version of 10.4.1 showing up on P2P sites and being subsequently installed on generic PCs with absolutely no hacking necessary. One can rest assured that this will not be the case when consumer ready Intel powered Macs roll out early next year.

We can now return to the question of why people will continue to buy Macs when they could just run OS X on a Wal-Mart PC. The answer s simple: convenience. Remember with Intel Inside Apple is no longer asking users to forsake the Windows platform completely, soon users won’t have to choose “either/or”. Couple that with each OS update likely breaking plain box compatibility (remember that brief period of time when Real sold iPod “compatible” music?) and suddenly users see Macs as a viable option. The Mac will actually run the software they pirate from work and they’ll be getting tired of hacking their PC, once again, just to keep using OS X. Sure there will always be people willing to break out the soldering iron or employ some other complicated method of EULA circumvention but Apple can put up with those diehard hackers to get a larger chunk of the market.