September 5, 1997 1:50 PM PDT
Apple faithful losing faith
Apple purchased the "key assets" of Power Computing, the largest Mac clone maker, in a stock deal worth $100 million earlier this week. As a result, Power Computing will not sell any Macintosh-compatible systems after December 31. Apple Computer says the deal was made because Power Computing didn't expand the market for the Mac OS as was originally hoped the licensees would do.
But for Mac customers who have stayed with the platform through trying times, the presence of the clone makers represented stability and a hope that the platform would continue on even if Apple didn't. It also provided one very important benefit to users: choice.
One of the great attractions of the Intel-compatible computer market is its rapid expansion over the last ten years and the resulting plethora of offerings from a wide range of vendors. But the Macintosh market will now contract, leaving some customers in the lurch and causing some of the Mac faithful to reconsider their loyalty.
"Apple created [a clone market] where everyone was fighting to get the best computer into the most people's hands at the best price [but in the end Apple] could not compete," wrote Steve Fuchs, a programmer who also purchases Mac systems for his company. Fuchs has owned Macs since 1986.
"Now they are betraying the users who bought these machines under the belief there would be a future," Fuchs said. "I will never again look at an Apple design and not think, 'Power would have had this 4 months ago for $1,000 less.'"
One reader who described himself as an avid Apple user and the owner of a software development company says, "Myself, my company, and my customers will boycott Apple products, for as long as Apple refuses to compete in the marketplace."
"This boycott will begin immediately, as we are purchasing a notebook computer in the immediate future. I will now buy a Pentium clone from a name-brand PC manufacturer instead...I no longer feel comfortable purchasing Apple products due to their fear of competition in these critical areas," he said.
Other users are taking a more practical approach while they express their dismay. One of Power Computing's larger customers, the Academy of Arts College in San Francisco, owns more than 200 Power Computing machines. It says that, although the Academy will stick with Macintoshes because they are designed essentially for desktop publishing and multimedia production, it will lose its preferred supplier of Macs.
"It's been a no-brainer in the past with Power...It's who can deliver on time at the right price. In the past, that hasn't been Apple," says Jan Simon, lab supervisor at the Academy.
Apple's executives dispute the notion that clone companies were driving innovations in the Mac market, and insist that Apple can move the platform forward rapidly while pricing systems reasonably.
"I can tell you that all of the innovations you have heard about either come from Apple or exist within Apple...We've learned some lessons through the licensing program and we've improved the way we do business through that. You can expect faster and better systems," said Guerrino De Luca, vice president of marketing for Apple at this week's press conference.
"We expect to be able to prove to people that intend to buy a Mac that buying from Apple is the safest choice you can make," he added.
Apple CFO Fred Anderson, in a press conference following the Power Computing deal, said he believes that "a significant number of customers will return to Apple." Apple got Power Computing's database of customers and may be counting on customers who are ferociously loyal users of the Macintosh operating system to buy again from Apple. Recent research from Computer Intelligence showed four in five Apple Macintosh users who purchased a computer in 1996 bought another Macintosh.
A reader with a large Toronto, Canada, medical institute who purchases Mac systems agrees with Apple's reasoning on the buyout of Power Computing's OS license.
"Licensing, by its very nature, is difficult to control. Apple may walk away from this with some irate [ex-]customers but it has wrested back control," says Dr. Jim Woodgett. Woodgett notes that his office now has over 50 Mac systems as well as Windows NT and Unix systems.
Still, Apple may have underestimated the reaction to the deal. Eliminating Power Computing as a competitor may appear from company insiders to be a move that will shore up sales, but with loyalty shaken among hard-core users, the company may face a backlash.
"Apple thinks people will flock to them. Most likely, in the near term revenue will stay away from Apple while people continue to buy systems from Power Computing until they are gone," said one financial analyst.