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Apple Cloners: Partners Or `Parasites'?


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APPLE CLONERS: PARTNERS OR `PARASITES'?

Apple's talk of hiking cloners' fees alarms needed allies

Given the steady decline in Apple Computer Inc.'s fortunes, you would think it would do everything it can to hold on to allies. Among the most steadfast have been the companies that have built businesses around Mac clones. In recent months, it has been their machines--not Apple's--that have slowed the Mac's market-share slide. But Apple management, always ambivalent about the clone strategy, has been considering a big hike in licensing fees that would make cloners less competitive. "The cloners are just parasites," a top Apple official said in a Mar. 4 interview. "They're just sucking the blood out of the market. I'm all for licensing, but get a reasonable amount of money."

An outcry from clonemakers prompted Apple to reconsider draconian changes in licensing fees. But the impulse to lash out at the clones could cause permanent damage by prompting clonemakers to accelerate plans to expand into the so-called Wintel market--PCs based on Intel Corp. chips and Microsoft Corp.'s Windows software. On Mar. 9, UMAX Database Systems announced a Pentium PC aimed at Mac strongholds in publishing and graphics. Power Computing Inc., an effective Mac crusader, is gearing up for a major Wintel push, too.

It's easy to see why Apple now resents the clones. Rather than developing new markets, they took share from Apple itself. That stings at a time when Apple is hitting new lows. Losses could exceed $600 million this quarter, and on Mar. 14, the company was expected to announce a huge layoff. Fatter licensing fees may help short term, but at a steep price: the loss of allies that can help assure the Mac's long-term survival.By Peter Burrows in San FranciscoReturn to top

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