Apple acquire's Power Computing's "core assets"

Apple acquire's Power Computing's "core assets"

The big news yesterday was Apple's buy out of Power Computing. The basics of what has happened are covered in an Apple press release:

"Apple Computer, Inc. announced today that it will acquire Power Computing Corporation's core assets in a deal valued at $100 million in Apple common stock. Included in the key assets Apple will acquire are the right to retain key employees with expertise in direct marketing, distribution, and engineering; Power Computing's customer database; and the license to distribute the Mac OS operating system."

Further insight as to why Apple made this decision was given in an Apple press conference (as described in a MacWEEK article) as well as in a memo from Steve Jobs (as published in the San Jose Mercury News). Essentially, the claim is that clone sales were costing Apple money ("Every time a licensee shipped a clone, we were subsidizing the clone for several hundred dollars.") while not expanding the Macintosh market ("...less than 1% of Power Computing's customers were new to the Mac OS. The clone manufacturers have not expanded the market for Mac OS computers.").

Clearly, many people in the Mac industry disagree with this assessment. A column by Henry Norr in MacWEEK effectively summarizes this alternative view. A more recent column is even more damning.

Beyond the Power Computing deal, there is apparently no plan to purchase other clone makers. However, the remaining clone makers will not be licensed to sell CHRP machines or notebook Macs. There is some ambiguity as to whether they will even be licensed for Mac OS 8.

MacInTouch (which initially broke this story on Monday) and the MRP continue to cover this story extensively.

A personal note: If handled right, there are ways that this deal might work out very well for Apple. However, I don't believe this will be the case. I believe that Apple has made a major and costly mistake. The common belief is that Apple should have opened up the market to clones years before they did so. I agree. That they are now closing the market they so recently opened is a return to a strategy that was a mistake to begin with and an even greater one now. Power Computing was an asset, not a liability. I hope I am wrong in my assessment. I fear I am not.

 

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