Why is this causing a lot of bother? Well at the moment a cloned computer not only contains Apple software but Apple hardware too in the form of ROM chips containing parts of the operating system. This means that licensees need to pay two sets of royalties and also need to send all hardware for Apple approval which takes time thereby ensuring that they are consistently one step behind Apple. MacOS 8 with CHRP (Common Hardware Reference Platform) would break the cloners free from this by allowing them to do without Apple chips so circumventing their need to get each system checked before going on sale. This would provide a level playing field for them (in their view).

Power Computing, the first licensee (and the most successful), has most to lose if the licensing situation falls through. They're about to go public and they only make Mac compatibles - kill that and you kill the company. In their IPO filing they did reveal they would soon be producing Windows NT machines but they aren't ready yet, the IPO has been frozen and they've halted construction of their new headquarters. Other cloners like Motorola and Umax have other sources of revenue and would undoubtedly survive but I'm sure would rather stay in the cloning business if the margins remain good.

Power Computing have roused customers to their support and several sites offer a petition for people to sign in the support of cloners (such as MacCentral) which has collected about 10,000 signatures already. But is Power Computing right in using the consumers against Apple? There seems to have been disagreement within Power Computing itself as Joel Kocher, the Chief Operating Officer and President, resigned last week quoting unreconcilable differences.

What are the issues surrounding this then? Well it seems that Steve Jobs has rightly recommended a re-examination of the licensing situation. The cloners have undoubtedly helped stimulate the market, reducing prices, improving performance but they haven't grown the market. They have stolen from Apple. Basically they are currently acting as parasites. For quite a low licensing fee they get the MacOS product and Macintosh hardware concept which resulted from years of expensive R&D at Apple. Any new developments are paid for by Apple but used by all the cloners. They're getting an almost free lunch and in return they're eating up Apple's market share.

So even if Apple simply ups the licensing fees and everything else is unchanged then the market will make some money for a couple of years and then die, taking Apple and all the cloners with it - it can't continue to cannibalise itself. Make the fees too high (or introduce a folly like a sliding scale system whereby the more powerful the computer the more royalties paid) and the cloners become uncompetitive, innovation stagnates and Apple is left on its own.

Apple should raise licensing fees, a fair amount, any reasonable person can see that the cloners should pay a larger part for the work Apple does. Apple should also promise to bring in CHRP technology in MacOS 8 if the cloner promise to spend at lest 40% (or so) of their advertising budget outside of the current MacOS 8 market. Power Computing, for example, seem to be very astute marketers and their skills (along with low prices) would work wonders for the Mac market if used to woo new users and second time PC buyers.

Currently in the UK press Dell, Gateway 2000 and Compaq feature heavily. The ads show feature laden bundles with software, rock bottom prices and friendly faces - tempting for first time users. A UK company, Granville Technology, also features. They own MJN Technology, Colossus Computers, Time Computers and several other companies which may all advertise in the same paper. They offer for £999.00 (ex. VAT) 166 Mhz Pentiums (or K6s) with LOADS of software, 56k modem, laser printer etc. Get the idea? The Always Apple adverts were wishy washy. First time buyers should see 200Mhz for £999.00 including a monitor, software, printers, modems - the works. If Apple won't do it, the cloners will. The buyer wants to be able to make comparisons there and then - not phone a number and wait for information from Apple which doesn't have any pricing and then find and phone a reseller.

As with most things the trick here is balance. Apple just ask for a reasonable bit more money from the cloners and ask them to do a reasonable amount for the market and in return the cloners get something reasonable which they deserve.

All is well and good then? No, not yet, we've got to wait and see what Apple actually do. Fingers crossed, eh?

Vote in our Poll! How do you think Apple should proceed on the cloning issue?

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by Jason P. Kitcat [e-mail him]