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Apple's Cloning Myth
The basics of what happened

By: John C. Welch

Having just finished the 1999 Apple WorldWide Developer Conference, and having heard some folks there talking about how "If only Apple had kept the clones..." Well, there never were any clones, at least in the sense of PC clones, and in fact, if IBM would've had it's way, there would have never been any clones. Hopefully, this article will lay some of the 'Mac Clone' comments to rest.

First of all, the non-Apple Macs weren't clones at all, they were licensees. Motorola, Power, Umax, Daystar and surprisingly enough, IBM, (although they never did anything with it) were licensed by Apple so that they could build computers that used Apple-provided specs, and could run the MacOS, system 7.X. In the early days of the licenses, all the non-Apple machines were simply repackaged Apple motherboards. Although this would change, most notably with Umax and Daystar, this tone of how dependent the licencees were on Apple was to never change. Indeed the entire program was started by Apple, maintained by Apple, and, appropriately ended by Apple. Apple spent a great deal of time on the program, and had built in a lot of checks to ensure compatibility of the licencees Macs, precisely to avoid the PC clone debacle, and still almost got knifed by the program.

In truth, the whole program was the last gasp of the PReP/CHRP program. (PReP standing for PowerPC reference platform, which Apple never bought into at all, and CHRP standing for Common Hardware Reference Platform, of which Motorola built a few, and Apple eventually evolved into the iMac and it's modern descendants) The whole PReP/CHRP thing was supposed to be a way to build a computer that would run OS/2, AIX, Windows NT, and the MacOS. OS/2 never made it, AIX is on the PowerPC, along with IBM's AS/400 platform, although the similarities between these, especially the AS/400 and the PowerPC Macs are extremely shaky. NT did make it, but only for versions 3.5.1 and 4.0, Service Pack 2. In any case, there were never any apps for NT-PPC, and Microsoft stopped development on that version. This kind of thing has never worked, as there are too many selfish interests between that many disparate companies. Even in the PC world, you have differences between "Intel Standard" computers that cause their share of problems.

The PC Clone Story

When IBM developed the PC circa 1982, it was done as cheap and dirty as possible. The CPU was picked because it was the cheapest one around that wasn't at the end of it's life cycle, and the reason for choosing the 8088 over the 8086, which was a more powerful chip, was that RAM was hideously expensive at that time, (remember, the 'Power Users' of the day MIGHT have a whole 128K of RAM, and that usually required some serious hardware modifications to the computer). The ISA bus was picked because it was cheap and easily used, cassette tapes were chosen as the default input, because floppies were cheap. Finally, even though progress was being made towards bitmapped graphics and color on the low end, black and white ANSI graphics on a monochrome monitor were used as the display. The low level interface, or BIOS was a tiny thing, as all it had to deal with was floppies, serial ports, one or two parallel ports, a keyboard, and a black and white display. Finally, IBM didn't even write an OS for the machine, but instead licensed one from Microsoft, who had bought it from a Seattle company. There were a number of other architectural idiocies that this hard requirement for 'cheap at all costs' mentality caused, but I'll save that for another time.

The amazing thing about this machine was it's impact. Overnight, it took over the personal computer market, as at that time, IBM had a name recognition that nobody else could match. IBM was taken a bit aback by the reaction, and the popularity of the PC, as they had built as a way to make a few bucks off of the whole home computer thing, and it was intended to be used as a kind of 'Smart Terminal'. Even IBM knew that the PC was a mess for an end user, and only intended for it to be used by those with an MIS department within easy reach. But an impact it had, and it was astounding. Not surprisingly, there were a lot of other people that wanted to cash in on this, and started building 'PC Compatibles'.

The problem with this was the BIOS. IBM owned that, and they weren't letting anyone else use it. (Surprise, Surprise! IBM *never* wanted clones!) Some companies tried to work around the BIOS by creating their own versions, but if they got too much wrong, then it wouldn't run PC programs, and if they copied it too well, then IBM sued them and ran them out of business. So it went along like this for a while until a tiny company called Phoenix got an idea. What if we recreate the IBM BIOS, but did it in such a way that we couldn't be sued? What if we take the public specs for the PC components, making VERY sure that NO IBM - proprietary material is in these specs, and build our own BIOS, that is a perfect copy, or clone, of the IBM BIOS, and IBM won't be able to sue us over it.

This is a DRASTIC oversimplification of the whole process, and for those who want details, there are a number of books that detail this much better than I am here.

Phoenix went to work, and a relatively short time later, they had a fully compatible BIOS that would allow anyone to use it, and build a PC that was a perfect clone of an IBM PC (right down to the BIOS). IBM promptly tried to sue them into the ground, but Phoenix had done their homework, IBM lost, and the cloning industry, along with companies like Compaq, was born. And no cloning did not almost put IBM out of business. IBM caused itself a lot of problems, but they were, and still are making a LOT of money, (over 70 Billion dollars in 1998), from things like Mainframes, and their service and support organization.

Back to Apple

Moving forward to the mid 1990s, Apple was licensing it's designs with the hope that these smaller companies would target niches that Apple couldn't easily target. And for a couple of companies, mostly Daystar, with it's gigantic cases and quad-604 power Macs, and Motorola, with it's cheap, but serviceable Macs, actually did sell to markets that Apple was having difficulty addressing. But the other licensees, especially Power Computing, went after Apple (and Apple's market) with a vengeance, and really started to bleed Apple heavily.

For the Power fans out there, I challenge you to show me any empirical evidence of a serious Power marketing campaign that was in a PC media outlet and not a Mac one. Good luck.

So this pirating Apple's market goes on for a few years, and in comes Steve Jobs, who, after retaking control of HIS company, realizes that the licencees (especially Power) are just killing Apple. They are getting to use Apple's R&D and competitive advantages, and giving little back. The volume isn't high enough that the licensees are paying for what they are taking.

However, Apple has a major new release coming out, OS 8, and the cloners want it -- and the licensing agreement only applied to System 7 and variants. So now Apple has some leverage in the negotiations, Steve starts talking about the terms. He wants to raise the licensing fees, because A) Apple is literally losing money on each motherboard they ship to the licensees, and B) Apple needs to make money, badly. The licensees, (with the exception of Umax, who wasn't stupid, and Daystar, who had such a small niche market anyways, and was about to get out of the business altogether, as it was a money pit for them), start telling Apple that Apple has to drop the OS licence prices, and a lot of other demands, and this is with them about to start making CHRP - based Macs, which will cut Apple out of the hardware licenses completely, and leave them only the software licenses for revenue from this. At this point the writing is on the wall for Jobs, and the licencees. It's dead, the question is just how it is going to happen. All this is happening right into MacWorld Boston of that year, 1997. So far, Apple is trying to be, from their point of view, fairly reasonable, and Power is negotiating a way to end the program in a way that won't drive them out of business.

Which was happening anyways. Only after Power went belly-up did the details on just how badly that company was being run come out. That company had been doomed long before the end of the Mac licenses. But everyone likes to 'forget' that fact, and just blame Apple for it.

Then comes the epic fit. The day before MacWorld opens, Power has a press conference, and basically tries to get the User community riled up by saying, "See how big bad Apple is screwing you? They won't let us build G3 Macs, and they won't let us build laptops, and they just suck. So all of you go tell them they suck until we get our way" Needless to say, this blows up in Power's face, and Steve goes back into the negotiations, and basically dictates terms of surrender to Stephen Kahng, the CEO of Power. Power accepts, the program is shut down, and 'the baby has been knifed'.


The point of this was to illustrate that what people call clones in the IBM world, and what people called Mac clones were two entirely different things.

Actually, Apple did have one serious clone attempt, the Franklin, which was an Apple II clone, and Apple was able to successfully sue Franklin out of business over it -- but not before Franklin had hurt Apple. Steve likely remembered that whole experience when dealing with Power, Motorola and the later cloners.

IBM never licensed anything, it was taken from them, and they still haven't really recovered from it. Then again, IBM never did have a clue as to how to market to the home user. Unless you were a home user with a mainframe. Apple created a licensee program, not a clone program, and almost didn't recover from it. Hopefully, this will help finally finish all the silly confusion and pretending that IBM allowed clones.

Created: 05/31/99
Updated: 11/09/02

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