First-Ever Deal to Build Apple Mac ‘Clones’ Announced : Computers: Venture by start-up Power Computing is backed by Olivetti of Italy. Macintosh fans hail news.


Ending a long and anxious wait for fans of the famed Apple Macintosh personal computer, a California start-up with backing from Olivetti of Italy on Wednesday announced the first-ever agreement to build Macintosh “clones.”

Power Computing Corp., based southeast of San Francisco in Milpitas, said it will sell Macintosh machines under its own label and also make components and complete systems for other companies. The first clones are expected to be shipped in March, said Stephen Kahng, a well-known Silicon Valley computer designer who is president and chief executive of Power Computing.

Kahng would not disclose prices, but the Mac clones are likely to be slightly cheaper than Macs from Apple Computer though still a bit more expensive than IBM-compatible PCs.


Apple enthusiasts hailed the news, saying attractive clones at reasonable prices should help the Cupertino, Calif., company in its effort to wrest market share from the industry’s dominant players, Intel and Microsoft. Machines based on Intel microprocessors and running Microsoft operating systems and software have captured about 80% of the worldwide PC market, compared to about 10% for Apple.

A March launch date would be several months sooner than expected. Don Strickland, Apple’s vice president of licensing, said in September that clones running the Macintosh operating system probably will not be available until the end of 1995.

Power Computing’s aggressive launch plan bodes well for the overall Mac market, said Pieter Hartsook, editor of the Hartsook Letter, an Alameda newsletter that tracks Macintosh developments. He said his chief reservation is that 13-month-old Power Computing is an unknown with no brand identity, but he noted that that could also work to Apple’s advantage.

“Kahng has a history (in Silicon Valley) and no competing market, so the company can focus all of its resources on building Mac clones,” Hartsook said.

Some expect Apple to eventually reach licensing deals with major industry players, possibly including Motorola and IBM, Apple’s partners in the development of the new PowerPC microprocessor. But Apple, which resisted licensing of any sort for years, is trying to walk a thin line by allowing clones while still retaining the ability to sell its own hardware profitably.

Kahng, 45, said he was attracted to the Macintosh because of the speedy new PowerPC chip. “We felt PowerPC is a new technology with very good potential,” he said, adding, “I am staking our existence” on the Mac clones. Prototypes will be demonstrated at the MacWorld exposition starting next Wednesday in San Francisco.


Kahng, who was born in Seoul, came to the United States 25 years ago. He studied computer science and electrical engineering in Michigan, receiving a master’s degree in science from the University of Michigan in computer engineering. He has since been involved in a variety of computer ventures.

His former company, Up to Date Technology, designed the Leading Edge personal computer for Daewoo Corp. of South Korea. He was later a senior executive at Chips & Technologies, which played a big role in the development of the IBM clone market.

Olivetti, one the biggest computer firms in Europe, owns “less than 50%” of Power Computing, Kahng said. He said he is in discussion with other potential corporate and venture capital investors.

Apple’s Strickland said Power Computing would help speed additional clones to market by supplying components to other licensees. He added that Apple’s and IBM’s recently announced plan to develop a common hardware standard in 1996 that would run a variety of operating systems has sparked new interest in Mac OS licensing.

Once that platform becomes available, Strickland noted, clone manufacturers would have to license only the Mac operating system software, not Apple’s proprietary hardware.

Since unveiling the Macintosh a decade ago, Apple has won a strong following among desktop publishers and others who crave ease of use and outstanding graphics. Indeed, many in the computer world have always considered the Mac vastly superior to PCs that use Intel chips and Microsoft software. But Apple charged premium prices, and the vast majority of PC users gravitated toward the less expensive, IBM-style machines.


The arrival of Microsoft Windows 3.0 operating system four years ago eroded much of Apple’s user-friendly advantage. Yet Apple still declined to license its technology to manufacturers that would have produced less expensive clones. That failure, many analysts say, has cost Apple dearly in terms of lost opportunities to build market share.

Among others reportedly negotiating licensing agreements with Apple are Toshiba and Pioneer Electronic, both of Japan, Motorola, Goldstar Technology of Korea and Radius.