This article originally appeared in TidBITS on 1995-01-02 at 12:00 p.m.
The permanent URL for this article is: http://tidbits.com/article/1693
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Clone Alone

by Geoff Duncan

On December 28, 1994, Power Computing Corporation of Milpitas, California, became the first company to announce it had reached a licence agreement with Apple for rights to build Macintosh clones. Power Computing expects to supply Mac clones to other PC makers to sell under their own logos as well as directly to consumers via mail order. According to the New York Times, Power Computing plans to begin shipping PowerPC-based clones in mid 1995 for as little as $1,000 each. Apple indicated it expects a few other companies will announce licensing agreements "in the near future."

If your first reaction to the name "Power Computing" is "Who's that?", you aren't alone. Power Computing is a small, little-known, start-up company with no established brand recognition, distribution channels, or manufacturing track record. However, its CEO and President, Stephan Kahng, is a veteran of the PC-clone game and is credited with developing the Leading Edge PC for South Korea's Daewoo Corporation in the 1980's. Power Computing's largest outside shareholder is the Italian company Olivetti, a large manufacturer of PC-clones.

If you wonder why Power Computing is the first company to announce an agreement to manufacture Macs, you still aren't alone. Apple has been coy when speaking about potential licensees of Macintosh technology, saying only that there were several possibilities and that it would leave any statements up to licensees. Industry speculation has pointed to Motorola, Zenith, Pioneer, and even IBM as being likely to strike a deal with Apple, but apparently Power Computing decided to make a splash with its announcement. This could potentially jump-start other efforts to licence the Macintosh as other manufacturers rush to firm up their deals. But it's important to remember that no large personal computer makers have committed their own manufacturing resources to Mac clones, nor have any agreed to buy systems manufactured by Apple.

Industry scuttlebutt has held for years that Apple should licence the Macintosh, and it's generally been accepted that Apple must licence its technology in order to expand market share. It's a risky strategy: Apple has controlled about ten percent of the personal computing market for the last few years, but that is expected to decline in relation to the PC market for 1994, even with unprecedented Macintosh sales and the success of the first Power Macs. Mac clones will significantly "cannibalize" Apple's own revenues and cause the company to decrease in size as it lays off employees and focuses more on its software business. However, an aggressive and successful cloning strategy could allow the Macintosh to penetrate a greater portion of the market and - cross your fingers - fight a winning battle with the Windows-Intel standard.

Many members of the Macintosh user and development community feel extremely nervous about clones. They point to early IBM PC clones that claimed 100 percent compatibility but didn't deliver, causing untold numbers of headaches for consumers and businesses (and giving savvy technicians a sinecure!). Users and some industry experts agree that a bad Mac clone could be disastrous for Apple; however, others feel that clones - even bad ones - will allow Apple to leverage its brand name. As one industry source put it, "Would you rather drive a Volkswagen or a Mercedes?" In any case, look for Apple to closely supervise the production of the first Macintosh clones.