Set Psystar's to Stun

A company that goes by the name Psystar recently released a line of computers called "OpenMac". These units are running Apple's most recent version of their operating system Leopard. Starting at $400 these units include a 2.2GHz Core 2 Duo E4500 processor, 2GB of memory, integrated GMA 950 graphics, 250GB disk and 20x DVD burner. Far less expensive comparatively speaking to an authentic Apple system. Where the controversy begins is where this company's profits end. As noted by Paul McDougall of Information Week, this product is a direct violation of Apple's licensing terms. To be more specific, the terms forbid third-party installations of Leopard, as is the case with the "OpenMac". The end-user license agreement explicitly states installation of the OS on third-party hardware, either for re-sale or for individual use is prohibited. However Psystar released an official statement Monday stating the company believes Apple's terms violate U.S. monopoly laws. This establishes an interesting situation for the sale of these units. Can Psystar legally sell the OpenMac? Can buyers legally use these units?

I believe that Apple should realize that there is a far greater demand for their computers than they are willing to see. I understand working through the business model, a company has a choice to compete on either cost or differentiation, and clearly Apple is competing on differentiation, hence the higher costs of their products. Lowering prices allows a producer to move higher quantities of products and increasing prices moves fewer units however a company may still enjoy the same amount of profit. This is perhaps why Apple chooses to not lower their prices, they are comfortable with their position. However I would argue that a generous price drop from their current price points would tremendously increase their bottom line. I believe Apple could sustain its premium brand image while extensively expanding their user base in turn they hold the proverbial "Holy Grail" in their hands, brand loyalty over the masses.