Mac OS on a Dell? Dell Favors, Apple Opposes

[medicine]

Tom Krazit, IDG News ServiceThu Jun 16, 5:00 PM ET

If Apple Computer ever decides to let its Mac OS X operating system outside of its confines, the company may see Dell founder and chairman Michael Dell as a customer.

With the recent news that Apple plans to become a fellow Intel customer for x86 processors, Dell has expressed interest in selling Mac OS X-based PCs, Dell said in an e-mail to Fortune published on the magazine's Web site today.

"If Apple decides to open the Mac OS to others, we would be happy to offer it to our customers," Dell wrote in the e-mail. A Dell spokesperson confirmed Thursday that the e-mail exchange took place.

One-Sided

Apple, however, is not keen on striking a deal with the world's largest PC vendor.

"Mac OS X will only run on Macs. Apple has no plans to sell Mac OS X software to run on PCs," an Apple spokesperson said in an e-mail response to questions about Dell.

Dell's interest in Mac OS X raises numerous questions about how such a partnership would work. Dell's current PC product strategy is famously one-sided: Microsoft's Windows operating system and Intel's processors for all. Dell executives believe this arrangement allows them to keep their operating costs as low as possible.

However, Mac OS X, with its Unix underpinnings and secure reputation, might pique the interests of many IT managers looking for a low-cost PC that is easy to maintain. And Dell's position as the industry market-share leader could expose Mac OS to a much wider range of users.

Close to the Vest

But Apple can't afford to let Mac OS X loose right now, says Roger Kay, vice president of client computing with research firm IDC. If Mac OS X could be separated from Apple's hardware, hackers would have pirated copies of the operating system out on the streets with little delay, he says. This would cause great harm to Apple's business model, which emphasizes its tight control over the entire combination of hardware and software as a premium product, he says.

At least one analyst believes that Apple is due for a day of reckoning with this strategy, especially now that it plans to move to x86 chips. Nathan Brookwood, principal analyst with Insight 64 in Saratoga, California, thinks it is only a matter of time before someone in the PC industry sues Apple for "tying" its operating system to a specific type of hardware available only from Apple.

Digidyne, then a division of Fairchild Camera and Instrument, successfully pursued a tying case against Data General in the 1980s, in which Data General was rapped for licensing its Nova operating system only to purchasers of its hardware.

"If you sell software that can run on hardware that you do make and hardware that you don't make, you cannot require people to buy your hardware to run your software," Brookwood says. If Dell really wanted to sell Mac OS X hardware, it could force the issue through the legal system, he says.

Stumbling Blocks

Dell's interest in Mac OS X also appears to run counter to its processor strategy. The Round Rock, Texas, company's reluctance to use chips from Advanced Micro Devices is based partly on the additional costs Dell would incur setting up a product development and testing team for AMD's products, Dell chief executive officer Kevin Rollins said at the company's analyst meeting in April.

However, supporting a second operating system would involve training thousands of Dell employees on the ins and outs of Mac OS X and setting up separate product development teams. Dell is willing to do this for its server customers interested in the Linux operating system, but the company ended Linux support for consumer PCs several years ago. Large business customers can still get Linux PCs or workstations through Dell by special arrangement.