July 30, 1997 2:50 PM PDT

Apple licensees in limbo

Apple (AAPL) Macworld saga continues is not making it easy for clone vendors to compete with Apple, putting the clone market at risk.

Some of the most serious disputes the clone vendors are embroiled in with Apple revolve around the Mac OS 8 operating system and the clone notebook computer market.

With the most recent executive shuffle, sources at some clone vendors say that efforts to strike a new licensing agreement for the Macintosh OS 8 are at a standstill. The silence at Apple has clone vendors wondering again about the company's dedication to supporting an openly competitive Mac market.

After the departure of CEO Gilbert Amelio, Steve Jobs has taken a bigger role in 'advising' the company, a source at one clone vendor said.

"Since he's been more visible, the licensing talks have sort of ground to a halt, which has us concerned," the source said. "We are just making an observation that we were close to an agreement, then Apple pulled back and said, 'We can't make an agreement now,'" the source noted.

"It might be [Jobs] doesn't like this or he's just taking time and getting the big picture. It's just not clear. We're a little jumpy about that," the source said.

The Mac OS 8 is an important release for clone vendors since it is part and parcel of the Common Hardware Reference Platform (CHRP), also referred to as the PowerPC Reference Platform. Mac OS 8 and CHRP-compliant hardware are key technologies that will allow Mac clone vendors to enhance system performance and introduce innovative products more rapidly--and thereby compete with Apple more effectively.

Motorola went so far as to announce today that it is breaking away from Apple with the new systems it announced (see related article). Motorola said that the new systems, using next-generation CHRP technology, signal the end of the clone era. "By the word 'clone' we mean the end of the era where we got to copy what Apple did [in hardware designs], because that's the way it was set up. That was a good way to start the clone market. Now we can [use CHRP to]...innovate," says Michael Bordelon, vice president and director of desktop products for Motorola.

The CHRP-compliant OS holds the promise of letting Mac clone vendors compete more freely because they don't have to use hardware designs from Apple, which only has to certify that a test suite of software programs runs correctly. Under the current arrangement, clone vendors have to let Apple examine any changes they have made to the Apple design and wait for approval.

Notebook computers, a critical product for any computer maker, have been adversely affected to the extent that none of the major Mac clone vendors offer a Macintosh PowerBook clone notebook. Apple has so far refused to license its PowerBook designs. Mac OS 8 would possibly enable clone vendors to do their own notebooks without Apple's permission. The companies would need to add functions such as battery management to the Mac OS without Apple's help, however.

Defiant clone vendors are forging ahead with notebook designs. Motorola is well on its way to developing a notebook, according to sources at the company. The system could possibly run an earlier version of the CHRP-compliant OS that Motorola has access to, as a way to circumvent Apple's control over the market.

In May, Umax Computer Corporation said it would likely produce a Mac OS notebook based on the CHRP specification but noted that the product wouldn't be available until later in 1998.

But Power Computing's strategy may indicate a more ominous trend for Macintosh clone vendors. Though the company has also been working on a CHRP notebook, it is now rumored to have focused on developing a Windows-based notebook instead, possibly due to frustrations with Apple over its stance on licensing.

Some analysts believe that it's unlikely that delays in signing an agreement mean Apple wants to stop the clone market outright.

"Jobs has to understand that [clone vendors] have been an important force in the Mac market. I would think that even if he is philosophically opposed to it, at this point things would at least continue as the status quo. But until he's officially in as chairman, he doesn't have official power to turn off those agreements. The train is in motion for the cloning program," says Kevin Hause, an analyst with International Data Corporation.

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