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Will Intel be inside Mac clones?

Power Computing may make PCs based on Intel chips to hedge against the possible dwindling of the Mac market.

Power Computing, a leading Mac clone vendor, may have its sights set on selling PCs based on Intel processors as a hedge against the potential dwindling of the Macintosh market.

Company insiders and industry analysts alike are beginning to talk about a move into this market, parlaying the company's growing direct-market expertise in the Mac market into Intel-based computer sales. Sources inside Power Computing confirmed that there is a possibility that the company could produce PCs based on Intel processors.

One way the company might do so is through creation of a subsidiary company. The subsidiary could possibly have a name other than Power Computing.

Starting up a computer company in the relatively protected Mac market first and then moving to the cutthroat world of Microsoft-Intel clones is a smart move, said Eric Lewis, personal systems analyst for International Data Corporation, at a recent industry conference. "It's a very good strategy. [Without it], they'd be squashed like a bug in the PC clone sector," he mused.

Careful consideration of any move into a new market is not the result of Apple changing its licensing fees or uncertainty about Apple's future, one source said. Moreover, no concrete plans have yet to be drawn up, sources added.

But down the road, the effort looks pretty inevitable to industry observers. "Power Computing is setting up to be the next Dell. Don't ignore them just because they're in the Mac market. There are a lot of conditions to be met, but if the Mac market withers, they could make the transition" to building PCs, Lewis said to an audience composed of marketing executives and industry watchers.

A number of key Power Computing executives are in fact former Dell executives, most notably Joel Kocher, who is the chief operating officer and president. (See related story)

Power Computing officially responded by saying that its goal from the start was to build a customer-driven direct-response business resembling that of a Dell or Gateway, but that there is no reason to speculate the company will leave the Mac market.

"Power Computing from the beginning, continues to see the Mac market space as very, very viable. We're happy with what we have done to date. There is work to do in that area because we see more opportunity there," said Mike Rosenfelt, manager of marketing for the company.

But a move into the Microsoft-Intel market wouldn't be without precedent. Umax Data Systems recently decided to start making Windows-based PCs after first establishing its brand name as a Mac clone vendor through a separate subsidiary. (See related story)

Moreover, there is one other possible avenue for entering the Microsoft-Intel market for clone vendors and Apple alike. Rhapsody, Apple's next generation Mac OS, uses the foundation of the NextStep operating system that already operates on Intel hardware. Though System 7 compatibility is PowerPC-only, Power Computing or Apple could conceivably use Rhapsody to run on Intel hardware.

The Mac market has indeed offered Power Computing a good opportunity to establish a solid financial and manufacturing base to work from if and when the company ever enters other markets. Computer Intelligence says market share for the Mac OS platform was pushed to 11 percent in January, marking this the second consecutive month in which the platform has gained share. The growth has been propelled by Power Computing's aggressive marketing of product rollouts, as well as Motorola's recent entrance into the Mac clone market.