Psystar Lawyer Bill: Who Picks up the check?

Who is paying the bill for the Psystar Lawsuit on Apple?

We know Psystar is counter suing Apple  (Information Week).  Anyone can sue anyone for anything it does not mean much,  but lets imagine for a moment that there is money involved...

Ahhh the sound of otherwise boring topics become interesting when there are billion dollar companies involved.

Psystar opened with a lot of interest and press See here (Engadget)

But not much in the way of credibility or obvious financial backing   See Here  (Gizmodo) 

So Now they are countersuing Apple  a company with more than $20 billion in the bank.  So are they crazy or what?

There are very few truly crazy people in the world  (and even fewer really crazy people with enough money to sue Apple) so there is a rational explanation to all of this we just don't know what it is yet.  We can however guess.  Woo Hoo! 

First Who is NOT Paying the bill.

Logic says... Psystar is not footing the bill.  If Psystar is paying their attorney by the hour then they are betting on a 3 month old business built on OPIP  (other peoples Intellectual Property) But Here is the biggest reason Psystar is not betting Moms life savings on the Lawsuit.  

Should Psystar gets the outcome they have stated they want Then for the privilege of winning they get put out of business by the Hoard of other PC Manufacturers  waiting to fill the void. Do you think for a moment these guys are delusional enough to think that they can manufacture/distribute a computing device as cheaply or effectively as Dell, HP or Lenovo?.  

So who is.

Hewdell Packovo,  This would be crazy too but it does make sense from a "Follow the money" perspective.  Generic PC manufacturer with huge market share and a willingness to throw a few bucks (For them) at a longshot bet that could change the face of the PC Business.  Finds a way to fund the lawsuit.  Look conspiracies are almost never true, but when all other options are ruled out what remains MUST be the truth.

Lawyers

If the lawyers are doing this on contingency than this is like green mail.  Apple not really wanting to find out if there is a case here quivers in a meeting for about 30 seconds and pays out 10 million dollars and Psystar becomes a distant memory.  This is a very possible outcome however boring and dirty it is.  The risk here for Apple is the lawsuit is a repeatable occurrence so they may try and make the case big enough to make the Lawyers rethink their budget.

Is there someone else that could be paying the bill?

Interesting possibilities.  and no idea what is really gonna happen.  Just as an aside  if a Windows PC Manufacturer is a WinTel machine what is the Apple analog....

Inpple?  ApTel?   InOSX?  There must be more.

Note to Reader:  Writer has NO affiliation with anyone associated with any of the parties of this case, has not met anyone in a garage in Washington getting details of anything.  This is all supposition based on rumor an over active imagination combined with previous reporting by previous reporters.

Squishy Margins: Apple Lower Margins Explained

Apple announced a their last earnings conference call  that they expect Gross Margins to be lower at the company for this quarter and into next year.  Here is a list of Margin squeezing forces that may be squeezing Apples margins.  

No one release, product, or strategy is the culprit here.  Do the MATH  a 2% narrowing of Apples gross margin will translate into almost a billion dollars a year in lower earnings (thats why we care)  That is more money than many new products will do in sales.

iPhone Accounting.  

Apple is accruing the income from iPhones over 24 months.  The expense created to enable the development, manufacture and sale of that phone is written off in the quarter it occurred in.  Apples manufacturing partner is currently rumored to be manufacturing 800,000 phones a WEEK.  The expense for this will show up in the next 90 days.  The income will not be completely realized until September of 2010.

Retail Sales Mac/iPhone

Mac sales are growing like crazy, much faster than the industry.  In order to maintain that growth, Apple has partnered with additional retailers, most notably Best Buy to sell their products.  For recent history Apple products have been sold primarily directly by Apple. 

Broad market competition

The larger Apple gets, the more price sensitive their next marginal customer is... Apple will be lowering their prices on iPods, Macs, iPhones in order to get them into more peoples hands because as has been shown is that if you buy one Apple product you  are MUCH more likely to buy another.

Product X

Product exists as does product Y and Z .  These products will have narrow gross margins on release but I think it is a red herring hiding as the product BY IT SELF will not be large enough a force to lower the margins as Apple has indicated.  All of these forces together are conspiring to lower the margins.

More to come