IBM Will Let Rivals Continue to Clone Its Computers--for a Higher Fee
Signaling its willingness to let other companies clone its latest line of personal computers, International Business Machines on Friday said it would continue to license its patents on key technology.
The announcement reassured computer industry executives and analysts who feared that the giant technology company would try to prevent competitors from developing copycat machines. But IBM also disclosed that it would increase its licensing fees at least fivefold, from a maximum of 1% of sales revenue to as much as 5% on products using multiple patents.
The move comes just days before Tandy Corp. is expected to announce personal computers compatible with IBM’s year-old Personal System/2 models. Compatible machines, also known as clones, use the same software and accessories as the IBM models after which they are modeled.
Industry analysts and executives from other computer companies said IBM’s licensing stance would prompt still more computer makers to clone the company’s new PS/2 line without fear of legal reprisal.
Although IBM stands to lose some sales to clone makers, analysts said IBM ultimately would reap rewards in the form of royalty fees and in the clout its PS/2 technology will gain in the personal computer industry as it becomes an increasingly important standard.
“IBM runs the risk that others will make a better machine, but it has a big head start that will be hard to catch up,” said Peter Teige, a personal computer analyst with Dataquest, a San Jose market researcher. “Besides, they are getting others to play their game, while they are already working on new products.”
Tandy has scheduled a news conference for April 21 in New York, generating speculation that it will unveil plans for PS/2 clones. Tandy Chairman John Roach declined to comment on the speculation.
Roach said, however, that the company has a long-standing cross-licensing agreement with IBM that he did not expect to be changed by IBM’s latest announcement. “We remain very confident with our position on product development and our announcement scheduled for April 21,” he said.
Until Friday, there had been widespread confusion and speculation about how protective IBM, the world’s largest computer maker, would be of the technology used in the PS/2.
IBM has hoped its PS/2 models would help it win over customers that have been buying clones of IBM’s original line of computers, introduced in 1981.
Analysts said IBM’s statement indicated that the company would permit others to sell clones of the PS/2s as long as they obtained the licenses IBM deemed necessary.
Some analysts have portrayed the PS/2 machine and accompanying operating system as a major advance, in part because they allow computer users to perform many kinds of tasks simultaneously.
IBM spokesman John Mihalec stressed that except for changing the licensing fees, IBM is not altering its long-standing policy for granting licenses on its more than 32,000 patents. He said IBM would continue to rely on other so-called intellectual property protections, including copyrights, trademarks and patents.
Safi U. Qureshey, president of AST Research, an Irvine-based manufacturer of IBM-compatible personal computers and components, said IBM’s announcement is an admission that it wants “much broader support” for the PS/2 line, because the line had not become the standard the company had originally hoped.
Manufacturers of the chips that actually allow the clone makers to replicate the PS/2 said they remained unsure whether their companies would be required to seek licenses from IBM.
Among the chip makers potentially affected are Western Digital Corp. in Irvine, Chips & Technologies in San Jose and Intel Corp. in Santa Clara.
All three companies say they have designed chips that mimic functions of the PS/2.
Times staff writer David Olmos in Orange County contributed to this story.
