Don’t rule clones out

Matthew JC. Powell
24 May, 2008
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This coming Tuesday marks the tenth anniversary of the official end of the clone era in Mac history, when the last of the licensed Mac cloners finally threw in the towel. Psystar’s recent activity with unlicensed clones has reminded people of those heady days, and this article by US Macworld’s Rik Myslewski has taken a nostalgic look at the era when Apple almost ate itself in an attempt to survive. It’s a good article, strong on historical fact and analysis that’s hard to fault. The conclusion, however, is questionable.

Rik concludes that, having had its unsuccessful brush with cloning a decade ago, Apple has learnt its lesson and won’t try that again. He quotes Phil Schiller three years ago saying Apple won’t let people run OS X on non-Apple hardware, and that — apparently — is that. There is, however, one thing that my esteemed colleague has neglected to consider:

This isn’t 1995. Nor is it 2005. This is 2008, and things are different now.

A bit of context. In 1995, Apple was reeling from years of directionless leadership in which its CEOs and board seemed to think that the company could be successful on pure momentum. The concept of Mac clones was raised in correspondence between Microsoft’s then-CEO Bill Gates and Apple’s then-CEO John Sculley as early as 1991. Gates saw it as an opportunity to sell a lot more copies of Microsoft Office at a time when Windows was, basically, not looking like it would ever get off the ground. Sculley completely missed the point and failed to grasp the opportunity Gates was presenting. His response to Gates seemed to indicate that he thought Gates was proposing Apple would continue to build the computers and everyone else would essentially relabel them — nothing would be gained by that, quite obviously.

Then again, Sculley was also the guy who basically gave MS the right to use elements of Mac OS in "all future versions of Windows" with nary a penny to pay for it. Intellectual property apparently not a strong suit.

Also, Sculley was occupied by his new plaything, the Newton MessagePad. Visionary it certainly was. Functional it was not. A distraction from Apple’s core business of developing and selling Macs, definitely.

By the time Microsoft got Windows sorta working, Sculley was gone and Michael Spindler had taken his place. Spindler essentially bet the farm on the AIM alliance — Apple, IBM and Motorola’s plans to conquer the computing world with the PowerPC-based Common Hardware Reference Platform (CHRP). CHRP was supposed to leverage the might of these three industry titans and overcome the growing duopoly of Microsoft and Intel.

Terrific idea, but it didn’t really come off too well. IBM and Motorola couldn’t agree on the specifics of the PowerPC architecture, and then IBM ceased development of its PS/2 operating system for PowerPC, concentrating instead on — wait for it — Intel. With friends like these …

Spindler got desperate. All around him people were saying that Apple’s only hope to spread the user base of Mac OS was to plough ahead with licensing, even if the CHRP hardware wasn’t ready. He resisted, much to his detriment. Reportedly, when Spindler finally left Apple, he left on a stretcher.

When Gil Amelio was brought in, he was at the very least decisive, though obviously desperate. He gave in to the clamour for licensing, but did so in a short-sighted sort of way. The licensing terms for System 7, which then became known as Mac OS 7, were by all reports very generous. In an effort to encourage lots of companies to come on board and make Macs, Apple was effectively giving the thing away.

Problems. Had the licensees then gone and addressed markets Apple was unable or unwilling to reach with its own hardware, it might still have worked. Call it buying market share — Amelio reasoned that the point of licensing was not to add to Apple’s bottom line so much as to get more people using Macs. More people using Macs would at least stop the exodus of developers.

But that isn’t what happened. The cloners made hardware that was almost identical to Apple’s and marketed it to Apple’s traditional markets. Sometimes the specifications were a bit higher or the cost was a bit lower, but generally you bought the same machine from Power Computing that you could have got from Apple. None of the cloners targetted the consumer market. None of them went for corporates. Where the cloners did significantly differentiate, such as daystar, they did so while targetting markets where Apple was already strong, such as video and publishing.

In short, just about every Mac clone was sold to someone who would normally have bought a Mac. By mid-1996 Apple was openly hostile towards its licensees, treating them as competitors instead of partners (which, in effect, they were).

In 1998 Apple tried to renegotiate the terms of the license for Mac OS 8, in an attempt to turn a bad mistake into something that might still turn into some money. Or, some might argue, in a blatant attempt to get the licensees to pack up and go away. It was the latter that happened.

Fast forward. Now it’s 2008. Apple is no longer circling the drain and its CEO — driven as he is by reshaping the company for the future — hasn’t lost sight of the fact that Mac OS X is the company’s core product. Developers are no longer leaving the platform in droves, as next month’s sold-out WWDC attests. Microsoft has obviously taken a hit with Windows Vista and is vulnerable, while the Mac, more than at any time in its history, has genuine credibility in the market. What’s more, with the move to Intel, it wouldn’t even have to persuade hardware manufacturers to adopt some weird processor achitecture that will separate them from the rest of the industry.

Apple could conceivably launch a licensing program now, not from a position of desperation but from strength. It still has finite manufacturing capacity and is not addressing some markets as well as other companies might be able to. The gaping hole in its product line — in between the iMac and the Mac Pro — is often commented upon, as is the fact that for all its recent success it’s still not attracting many corporate customers.

It’s very telling — to me, at least — that Apple has not commented publicly on Psystar’s "Open Computer". That machine fits very conveniently into the aforementioned product-line gap. There are, quite likely, people buying Open Computers who haven’t ever bought an actual Apple Mac.

There are opportunities now that didn’t exist in 1995, or 1997, or 2005 when Phil Schiller said “We will not allow running Mac OS X on anything other than an Apple Mac".

Notice: he said "not". He didn’t say "never".

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