Apple Clone Maker’s IPO Plans Dealt Setback

Power Computing Corp.’s initial public offering may not have a lot of power left.

The Round Rock, Texas-based maker of personal computers compatible with Apple Computer Inc.’s Macintosh operating system said Tuesday that Joel Kocher, its president and chief operating officer, resigned following “internal management differences.” The resignation came after weeks of uncertainty about the future of licensing agreements between Cupertino-based Apple and Macintosh clone manufacturers.

Power Computing filed June 30 to sell 3 million shares for $8 to $10 each, saying the IPO proceeds would go in part to fund development of a new line of computers using Microsoft Corp.’s Windows operating system. Now, analysts say, the IPO prospects are shakier.

“They’re in a bit of a bind at this point,” said Pieter Hartsook, editor of the Hartsook Letter, a Macintosh market research service. “I’m not sure how they’re going to continue with their IPO, considering they just lost their COO and the major source of their revenue is questionable.”

Power Computing said it’s not planning to withdraw its IPO, though it’s still negotiating with Apple. The company, which has been making Macintosh clones since 1994, was the first allowed to market such computers.

Power Computing and other Macintosh clone makers are trying to reach an agreement with Apple that would let them license Mac OS 8, the new version of the Macintosh operating system. Apple has indicated it wants clone makers to pay higher licensing fees than in the past if it does license the new operating systems.

Power Computing can’t ship its newest line of Macintosh-compatible computers because Apple hasn’t approved it yet, they said. And Power Computing hasn’t yet started making computers designed to run the Windows OS.

Though the licensing and approval problems were known when Power Computing filed for its IPO, the tone of the situation has changed, analysts said.

Hartsook said Apple is concerned that clone makers Power Computing, Motorola Inc. and UMAX Data Systems Inc. are stealing potential Apple customers, instead of expanding market share for the Macintosh operating system.

The resignation of Kocher, who defended the company’s position on licensing at the MacWorld Expo earlier this month, is another strike against the company, analysts said.

“There’s so much uncertainty that valuation is almost impossible,” said Lou Mazzucchelli, an analyst at Gerard Klauer Mattison & Co.