Mac maker
By Dawn Kawamoto
Staff Writer, CNET NEWS.COM

Stephen Kahng's life is a patchwork of rebellions so small, so quiet, it has all but gone unnoticed. That was until he started cloning Macs.

In 1967, at age 18, the ambitious teenager left Korea for college in the United States. Pulling up short of the doctorate expected by his family's two generations of engineering Ph.D.s, he left school to pursue a career in the untested field of computers.

A first job designing mainframes at IBM eventually led Kahng to pioneer computer manufacturing techniques that revolutionized the art of building low-cost PC clones.

Now Kahng is putting that expertise to use in a more unlikely market, Macintosh clones. Apple had steadfastly refused to allow any outsiders to manufacture Macintosh hardware until Kahng negotiated the first official license.

Originally, Kahng set out to produce the kind of cheap, under-$1,000 clones that fueled PC market growth. But as Apple faltered, losing consumer confidence and, in the last year, about 40 percent of its market share, Power Computing's shift to selling souped-up, custom-order clones turned out to be prescient. Kahng found success among Apple's most loyal market: graphic artists. By getting the latest, fastest CPUs and other improvements out faster and in more flexible configurations than Apple, Power Computing has graduated from being the first to being the biggest Macintosh-clone maker. Apple may have vacillated on choosing a source for next-generation operating system technology, but Kahng didn't wait for its blessing before licensing the Be OS last month. And even though Apple has decided to buy Next and the NextStep operating system, Kahng says he hasn't made a misstep. Power Computing will simply ship Mac hardware that supports both. Another small rebellion.

Sitting inside his sparsely decorated office at the company's research and development site in Cupertino, California, Kahng discussed how his past experience in the computer industry helped prepare him to negotiate a deal with Apple and Be for operating systems on his clones, how those deals unfolded, and where the Mac clone business is headed.

When you were negotiating your Apple license, what were the main challenges of doing that deal?
Kahng: It took us about eight months to get the license from Apple. Initially, it was difficult for Apple to consider us as a serious company because at that time we were a ten-person, sort of engineering organization with no name.

NEXT: Negotiating the Apple deal