Posted on 11/27/2009 2:27:59 AM PST by Swordmaker
"The Mac clone maker now fighting for its life in federal court pitched an extremely aggressive business plan to potential investors last year, claiming that it would sell as many as 12 million machines in 2011," Gregg Keizer reports for Computerworld. "According to a slide presentation that Psystar showed to venture capitalists in 2008, the Florida-based computer maker projected sales during 2011 of between 1.45 million and 12 million, with the first figure its 'conservative' estimate and the second number representing an 'aggressive' growth model."
"Psystar was looking for $24 million in funding, the presentation said, to expand its operations as well as to back its own branded hardware so it could 'compete directly against Apple,'" Keizer reports. "Under its conservative projections, Psystar told investors it would sell 70,000 computers in 2009, 470,000 systems in 2010 and 1.45 million machines in 2011. The firm's aggressive growth model, however, put those numbers at 130,000, 1.87 million and 12 million during 2009, 2010 and 2011, respectively. By comparison, Apple sold 10.4 million Macs during its 2009 fiscal year, the 12-month span that ended Sept. 30, 2009."
Keizer reports, "Dr. Matthew Lynde, who works as an economics consultant for Cornerstone Research, said in a declaration submitted to [the court] on Monday [that], after digging through invoices, purchase orders and other documents, Lynde was able to pinpoint only 768 sales of machines with Mac OS X pre-installed. 'Psystar has not challenged my analysis of its financial records,' Lynde added."
But clone maker sold just 768 systems, says Apple's economist
By Gregg Keizer
November 25, 2009 01:13 PM ET
Computerworld - The Mac clone maker now fighting for its life in federal court pitched an extremely aggressive business plan to potential investors last year, claiming that it would sell as many as 12 million machines in 2011.
According to a slide presentation that Psystar showed to venture capitalists in 2008, the Florida-based computer maker projected sales during 2011 of between 1.45 million and 12 million, with the first figure its "conservative" estimate and the second number representing an "aggressive" growth model.
The presentation was one of the documents Apple appended to a motion filed Monday in a San Francisco federal court that asked U.S. District Judge William Alsup to shut down Psystar's sales of Mac clones. Apple asked Alsup for a permanent injunction that would force Psystar to stop selling any computer bundled with Mac OS X, a move prompted by Alsup's ruling earlier this month that Psystar violated Apple's copyright and the Digital Millennium Copyright Act (DMCA) when it installed Apple's operating system on Intel-based computers.
Apple acquired the presentation during the discovery phase of its July 2008 lawsuit charging Psystar with copyright and software licensing violations. Psystar started selling Intel machines with Mac OS X pre-installed in April 2008.
Psystar was looking for $24 million in funding, the presentation said, to expand its operations as well as to back its own branded hardware so it could "compete directly against Apple."
Under its conservative projections, Psystar told investors it would sell 70,000 computers in 2009, 470,000 systems in 2010 and 1.45 million machines in 2011. The firm's aggressive growth model, however, put those numbers at 130,000, 1.87 million and 12 million during 2009, 2010 and 2011, respectively.
By comparison, Apple sold 10.4 million Macs during its 2009 fiscal year, the 12-month span that ended Sept. 30, 2009.
To make its numbers, Psystar realized it had to sell a laptop, which it told potential investors it would launch in the first quarter of 2009. That notebook, tentatively named "OpenBook" to identify it with the company's "Open" line of desktop and server systems, was to boast a 13.3-in. display, an Intel 2 Core Duo processor running at 2GHz, 2GB of RAM and a 250GB hard drive. The OpenBook's price was set at $699, $300 below the price of Apple's lowest-cost notebook at the time, the MacBook.
Although Psystar's CEO, Rudy Pedraza, told reporters in August 2008 that his company was working on a notebook, one never appeared. Currently, Psystar sells only desktop computers and rack-mounted servers.
Psystar's sales models also appear to have been dramatically off the mark. According to an economist hired by Apple to analyze Psystar's business records in order to make recommendations on the damages the latter should be made to pay for its copyright infringement, Psystar sold fewer than 1,000 machines from April 2008 through mid-August 2009.
"Psystar produced incomplete financial records," Dr. Matthew Lynde, who works as an economics consultant for Cornerstone Research, said in a declaration submitted to Alsup on Monday. After digging through invoices, purchase orders and other documents, Lynde was able to pinpoint only 768 sales of machines with Mac OS X pre-installed. "Psystar has not challenged my analysis of its financial records," Lynde added.
Psystar even tried to turn the Apple lawsuit to its advantage when it pitched investors. In one slide of the presentation, the company argued that the ongoing litigation would "insulate" Psystar from "other PC manufactures [sic]" who might want to leap into the OS X market but would be frightened off by Apple's suit.
"This presents us with a unique window of opportunity to gain market share and achieve brand recognition before competitors can even enter the market," the slide read.
Alsup will hear oral arguments Dec. 14 from both parties on Apple's request for an injunction. The case is slated to go to trial in January 2010.
Psystar is blocked from declaring bankruptcy again because of the shenanigans they played last spring in trying to delay the California trial by declaring bankruptcy then... and then withdrawing the bankruptcy when the judge ruled the suit had to continue to determine their liability in the bankruptcy... so unless the bankruptcy judge relents...
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I remember when I first heard of them and considered one of their machines. But husband and I both had doubts and thought they would be challenged by Apple and lose. They sure did have, at the time, very attractively priced machines compared to Apple.
Keizer reports, "Dr. Matthew Lynde, who works as an economics consultant for Cornerstone Research, said in a declaration submitted to [the court] on Monday [that], after digging through invoices, purchase orders and other documents, Lynde was able to pinpoint only 768 sales of machines with Mac OS X pre-installed. 'Psystar has not challenged my analysis of its financial records,' Lynde added."
LOL... that's hilarious! Only 768 sales... what a deal....
Seeing that information you gotta know that someone is behind this outfit. It sure would be nice to see who that backer is.
I remember when I first heard of them and considered one of their machines. But husband and I both had doubts and thought they would be challenged by Apple and lose. They sure did have, at the time, very attractively priced machines compared to Apple.
It just never pays in time and money and aggravation to go with some knock-off stuff. It's always grief.
It's much much better to go with Apple and/or their approved sellers and products that supplement Apple and their products. You don't have any of the grief and aggravation that you'll get from those knock-offs and wanna-bes...
Was this analyst hired by Apple, the court or whom? This may be true but it doesn’t pass my smell test unless this whole thing was set up by a law firm hoping to strike gold?
A few months back out of curiosity, I spec’d out a Psystar to match the specs of a Mac Mini. The result was the Psystar box was more money. At the time I wondered who would buy from them; how can they be selling? I guess the answer is they weren’t selling.
The math just doesn’t add up - even if 100% of the proceeds were dedicated to the legal battle, they wouldn’t cover them. So how have they purchased components, copies of the OS, paid for advertising, etc.?
Something stinks badly.
I didn’t think their Macs would be very popular, probably for the same reasons I wouldn’t buy one.
Since opening their doors, Psystar sold a mere 768 Mac Clones at prices between $550 and $1500 retail... Obviously that was not all profit, so where did they get the money to live on, much less fight the lawsuit? Who are the mystery backers? Who has the deep pockets?Gotta be Bernie Madoff. No? George Soros then. ;')
In one slide of the presentation, the company argued that the ongoing litigation would "insulate" Psystar from "other PC manufactures [sic]" who might want to leap into the OS X market but would be frightened off by Apple's suit. This presents us with a unique window of opportunity to gain market share and achieve brand recognition before competitors can even enter the market," the slide read.That got that one right, eh? ;')
That should be easy, right? Ask Psystar to show their paid invoice log. From 768 to "millions" there are about 3 orders of magnitude. It should be easy to determine who's lying.
My guess: Psystar.
Their shadow investors are probably getting worried just about now...
> Gotta be Bernie Madoff. No? George Soros then. ;')
Probably somebody who lives up near (cough) Redmond (cough)...
That's the part that they didn't reckon with. Apple buyers are obviously not looking for low prices. They want the cachet and snob appeal of owning an Apple.
;’)
This was an expert forensic accountant hired by Apple's legal team to try and asses the degree of infringement Psystar had committed by examining the papers and discovery documents and testimony provided by Psystar. It was necessary to engage such an expert because Psystar's records were in such disarray—either deliberately, having been destroyed (the judge fined them $5,000 for doing just that), or just through incompetence, having never been properly been kept in the first place—that it was necessary to have such an expert attempt to reconstruct the data. He was to testify before the Federal court as an expert witness on what he found. As best as could be discovered, 768 computers were sold and they also shipped 279 "recovery disks" with OS X components on them.
The issue is affordability.
Certainly, and it goes like this... "You can pay me now or you can pay me later..."
Quality always saves you money in the long run and that's the way it works with Apple products.
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