On information and belief, PSYSTAR alleges that APPLE intentionally embeds code in the Mac OS that causes the Mac OS to malfunction on any computer hardware system that is not an Apple-Labeled Computer Hardware System. Upon recognizing that a computer hardware system is not an Apple-Labeled Computer Hardware System, the Mac OS will not operate properly, if at all, and will go into what is colloquially known as ‘kernel panic.’

PSYSTAR is informed and believes, and thereon alleges, that APPLE is engaged in anticompetitive conduct that prevents the proper operation of the Mac OS on any computer hardware system that is not an Apple-Labeled Computer Hardware System–a Mac OS Capable Computer Hardware System–thereby forcing customers of the Mac OS to purchase–and only purchase–an Apple-Labeled Computer Hardware System if they wish to have the Mac OS operate sans kernel panic or an infinite loop.”

That’s an intriguing allegation. Risky though, since it’s also an admission that Psystar has circumvented the technological copyright-protection measures built into OS X, just as Apple claims in its amended complaint against the company. Apple contends Psystar has done so illegally, in violation of The Digital Millennium Copyright Act. Psystar says that’s impossible because the kernel panic-forcing code at issue here isn’t a copyright-protection measure.

Who’s right? Who knows? But if it’s Apple, then Psystar presumably is guilty of circumventing Apple’s copyright protection systems under the DMCA. And that’s a felony, because Psystar profited from the circumvention.

Sued by Apple in August for violating the terms of its shrink-wrap license, trademark and copyright on OS X, Psystar replied in kind with a countersuit charging Cupertino with restraint of trade, unfair competition, and other violations of antitrust law. Apple, Psystar argued, engages in all manner of anticompetitive conduct to “protect its valuable monopoly in the Mac OS market.”

But according to the California judge presiding over the case, Apple’s products don’t constitute a market to dominate. And that being the case, Apple (AAPL) can’t be considered a monopolist.

“The counterclaim explains that Mac OS performs the same functions as other operating systems,” Judge William Alsup wrote in his order dismissing the suit. “The counterclaim admits that market studies indicate that, although Apple computers with Mac OS enjoy strong brand recognition and loyalty, they are not wholly lacking in competition. Psystar also points to Apple’s extensive advertising campaigns. Those advertising campaigns more plausibly support an inference contrary to that asserted in the counterclaim–vigorous advertising is a sign of competition, not a lack thereof. If Mac OS simply had no reasonable substitute, Apple’s vigorous advertising would be wasted money. The advertising campaigns suggest a need to enhance brand recognition and lure consumers from a competitor…. Apple asks its customers to purchase Mac OS knowing that it is to be used only with Apple computers. It is certainly entitled to do so.”

Softbank (SFTBF), Japan’s No. 3 wireless provider, broke the news in a spartan press release that would do even Apple (AAPL), a company renowned for its minimalist gadgets, proud. If ever there was a one-button press release, this is it:

SOFTBANK MOBILE Corp. today announced it has signed an agreement with Apple® to bring the iPhone™ to Japan later this year.”

Well, there you go. Presumably, Jobs will fill us in on the details on Monday. In any event, lining up a wireless partner in Japan is an important step for Apple, which hopes to gain a 1% share of the global cellphone business by the end of 2008. Nomura Research Institute estimates that Apple can sell 2 million to 3 million iPhones annually in Japan–-about 5% of the market–if it plays its cards right.

Also announced this morning, a deal with Telefonica (TEM), which has agreed to distribute the iPhone in Spain through its Movistar subsidiary. Together the two deals bring the iPhone distributor count up to an even 70, with more countries presumably waiting in the wings.

(Image credit: AAPLinvestors)

Sounds like a compelling proposition for folks who would like the Mac OS on cheap hardware. Too bad the Mac OS X EULA specifically forbids installing the OS on non-Apple computers. Apple (AAPL) legal is, no doubt, already half-finished with a cease-and-desist letter.

Silver and MacDonald argued that the operating system’s evolution is hamstrung by a vast and unwieldy code base that hampers meaningful change. “This is a large part of the reason Windows Vista delivered primarily incremental improvements,” they said. “Most users do not understand the benefits of Windows Vista or do not see Vista as being better enough than Windows XP to make incurring the cost and pain of migration worthwhile.”

Ob-vious-ly. And?

“Windows as we know it must be replaced,” said the two.

OK. But replaced with what?

It should be replaced with a smaller OS, the two analysts said. A thinner, more robust, more modular OS. One that makes application development, support and, above all, the user experience easier, more pleasant. An elegant OS that encourages users to upgrade, rather than desperately cling to older versions.

You mean an OS like … like Mac OS X (AAPL)? Isn’t Microsoft already working on something like that?

Among the 25 issues repaired in Leopard 10.5.1: a major one that resulted in a “potential data loss issue when moving files across partitions in the Finder” as well as other problems with Time Machine, Firewall, Back to My Mac, Airport and Mail.

The release of OS X 10.5.1 follows hot on the heels of OS X 10.4.11, Apple’s 11th and likely final update to Leopard’s predecessor, Tiger, which patched 41 vulnerabilities in the OS.