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Apple gets tough on cloning

CFO Fred Anderson dashes cold water on any hope for progress in the stalemated talks with cloners over rights to use Apple technology.

BOSTON--In the first response from a high-level Apple executive, Chief Financial Officer Fred Anderson today dashed cold water on any hope for progress in the stalemated talks with Apple clone manufacturers over rights to use Apple technology in their products.

At a press conference held here today following the opening Macworld
saga keynote of Macworld Expo in Boston, Anderson and other Apple executives refused to discuss the possibility of future licensing deals with Macintosh computer clone vendors, while making it clear any deals that are struck must be engineered in a way that preserves Apple market share.

"Any new licensing agreements must expand the Apple platform, not merely redistribute existing market share," Anderson said. The remarks reflect a concern at Apple that by licensing the production of Macintosh-compatible computers, the company is mainly hurting sales of its own computer systems, rather than broadening the acceptance of the Macintosh platform.

Apple has been buffeted over the past 12 months by aggressive clone vendors such as Power Computing and Motorola, which have beat Apple to market in many cases with the newest products and most sought-after technologies.

The bottom line on licensing appears to be that Apple wants higher licensing fees than the cloners are willing to give. Lack of favorable progress here for Apple makes it difficult for the company to justify licensing.

Apple executives were also critical of recent comments by clone vendors regarding the licensing negotiations. Power Computing's Joel Kocher, in particular, has been strident in his criticism of Apple during the past week, stating in no uncertain terms that the days of clone vendors may be numbered unless Apple consents to more palatable licensing agreements.

Avie Tevanian, Apple's vice president of software engineering, responded to Power Computing's comments by criticizing what he termed "irresponsible statements by the licensees," warning that they were trying to produce a crisis mentality among Macintosh users to put pressure on Apple.

John Ellett, Power Computing's vice president of marketing, wryly agreed with Tevanian's view: "It would be a crisis for Mac users if Apple does not embrace a licensing strategy." He also expressed disappointment at the absence of any discussion of the licensing issue from Steve Jobs's keynote address. "We continue to look for clarity on their commitment to licensing."

The issue of whether Apple's "existing agreements" include the right for Macintosh-compatible systems based on the Common Hardware Reference Platform, or CHRP, were also raised, highlighting yet another area of disagreement.

While Anderson stated that none of Apple's current agreements cover CHRP systems, Motorola director of marketing Dennis Saloky disagreed. "Motorola believes that existing agreements include CHRP." Motorola is showing a new CHRP-based Macintosh-compatible at the show.

Other sore spots are also festering. Power Computing's Ellett repeated his company's demand that Apple allow it to produce Macintosh-compatible notebook computers. "We have the ability to create laptops," said Ellett, claiming that users are "crying, yelling" for a laptop from his company.

Motorola, for its part, is believed to be showing its own laptop design in secret this week. So far, no major clone vendor has been able to produce a competitive Macintosh-compatible laptop, due to Apple's reluctance to open up that market.

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