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Down side? That is the point of competition. These companies had better make their products competitive or they will die off. Right now there are not too many people who are happy with the pro level font management solutions available on OS X, if Panther's native font manager can give these companies a kick in the pants, then by all means kick away.
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I agree. All three companies have had almost two years to get it together and only Diamondsoft and Suitcase have gotten in the ballpark, and even then, their product isn't quite as good as it was under OS 9.
But there is a downside. When Apple adds a feature to OS X that was provided by a third party, that developer may bolt the platform. And the fewer developers, the bigger the perception that the Mac has no software.
Extensis will probably weather the change. They have some great products in Mask Pro, Intellihance and Photoframe. Diamondsoft will take a bigger hit since Font Reserve is their main product. Insider Software is in deep trouble. Their product was the shoddiest of the bunch, and it was their bread and butter...