Apple buys Power Computing out of the Mac market

I held up posting this article waiting for official announcement of this deal from Apple so that I would not look like a complete idiot doing an article on Apple buying out Power's clone licence if Apple instead bought the whole company.

The bare facts of the deal are that Apple has used US$100 Million in Apple common stock to purchase Power Computing's "core assets".

What Apple gets is Power's licence back, the MacOS specific hardware and software that Power currently owns, and Power's customer list.

In addition, Apple gets the right to "retain" key Power personnel in direct marketing, distribution and engineering. All areas in which Power has been able to outperform Apple. This will enable Apple produce a (hopefully) top rate direct sales channel (though details are still not forthcoming) as well as strengthen its distribution (a noted Apple weakness) and engineering (which can only be for the better, Power Computing has always had the top, or near top, MacOS system). This all of course depends on who goes to Apple, and who stays with Power.

Power Computing will keep its name and will continue to sell MacOS computers until December 31st. It will also continue to support its current and future customers, what it loses is the right to sell MacOS systems beyond the end of the year.

Speculation over the future of Power hinge around a statement it made during its IPO filing to become a listed company in which it stated its intention of becoming a player in the Wintel clone market. It is assumed that this project will move forward, and Power will stop productions of MacOS systems.

The effect of this on other Apple cloners is difficult to gauge. Apple has stated that it has no plans to purchase assets of other MacOS cloners, on the other hand no deal yet exists for cloners to either ship MacOS 8, or ship CHRP systems (although at least Motorola has them ready to be shipped). Apple has also cancelled its certification of new Mac clone systems as well as its MacOS up-to-date program for non Apple computers (The MacOS up-to-date program lets customers update to MacOS 8 very cheaply on recently bought Macs shipped with 7.6).

Basically if this is the closing stages of the clone wars at Apple, good. It's been a very damaging time, the cloning uncertainty has probably done more damage to the Mac platform then any other fiasco at Apple in recent time. On the other hand, if this is just the start of an Apple plan to close down cloning, things could get very ugly, very fast. I think neither Apple or any of the clone makers (except probably Motorola) would survive what happened if this was the case. Apple should not overestimate the loyalty of its customers. Rhapsody is coming out next year, and it will run on PC's. Apple had better learn to live with cloning, because Apple will be mowed down by the Wintel cloners when Rhapsody is released.