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Installing OSX on an external Hard drive?

I recently purchased a new 21.5” iMac and I was wondering if i could install OSX on to an external hard drive using the Cd’s that came with the iMac. I then want to be able to boot it up from a MacBook 13” late 2006. I know the install CDs are very picky about the machine they install onto but is this possible?

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Yes you can, the CDs are full installation disks. Don't really care about much. But as for an external drive, a quick clone is the easiest.

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I have heard that the CDs that come with one model will refuse to install on another model

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yes, those disks ship with new macs, and will only work on the model of computer that they shipped with, the disks only contain the drivers for the one model of computer, and the retail disks contain drivers for all models, and trying to use the non-retail disks in a computer that they are not compatible with, will cause a kernal panic, or other boot issues when the disk is inserted into the computer, and attempted to boot off of.

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So what if i attempted to boot off an external hard drive with the OS already installed on it

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That should work, but you might have issues because of incompatible drivers.

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Incorrect, while what has been said about the drivers is correct, the core OS as well as the rest of the disk (disk utility etc.,) is the same.

Any issues from using a shipping disk can be corrected by simply running software update.

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