Anybody Wanna Clone A Mac?

Apple Computer Inc. is putting a happy face on its uphill efforts to license software and hardware, attempting to open the door to the first Macintosh clones. But is anybody else smiling?

On Sept. 19, the Cupertino (Calif.) company will unveil a fresh licensing strategy and a new smiley logo to be used by Mac software publishers and potential cloners--much like the one Microsoft Corp. uses to push its Windows operating system. But after nine months of preparing its plan, a critical piece is missing: any big-time takers. "I wish [the process] were faster, for sure," says Apple Chief Executive Michael H. Spindler. "But on the other hand, we want to do it right."

"WET SAND." Since the Mac was introduced in 1984, Apple has raked in fat margins on its proprietary technology, even at the expense of market share. In 1984, Mac hit the market with easy-to-use icons and snazzy graphics. But Apple has introduced no market-wowing changes in the decade since, while Microsoft has been catching up with its Windows operating system. With the Mac-like Windows95 due next year, Microsoft will have all but closed the gap.

Critics say any clone strategy should have been pursued years ago. "Now the window is closing," says an executive at Acer Inc., the Taiwanese computer maker that has spent 15 months negotiating a clone deal with Apple--to no avail. Apple is dithering. Meanwhile, Acer has had a look at Windows95 and is losing interest. Says a former top Apple executive: "Apple had an ice cube in the desert and everybody wanted it. They could have licensed it to everybody. Now all they've got is wet sand."

Spindler is banking on a crack in the window, negotiating with several small-potato computer manufacturers. He won't name names, but insiders say Apple has been talking to Fujitsu, Toshiba, Olivetti, Vobis Microcomputer, and Motorola. Together, these companies' share of the worldwide PC market adds up to a measly 5%.

Apple seems forced to fish for small fry because companies such as Compaq Computer Corp. and Dell Computer Corp. are simply not interested. IBM, Apple's partner in other software and chip projects, is discussing Mac licensing with Apple but isn't anywhere near an agreement, sources say.

Whatever the prospects, licensing its technology has become critical to Apple's future. Executives say the company needs to boost the share of computers that use Apple software to 20% of the PC market to keep software developers interested in writing programs for Macintosh over the long haul. With only 10% of the PC market now, Apple is unlikely to reach its goal without the help of clonemakers.

The smaller companies, Apple says, can modestly expand the Mac market without harming Apple profits. Fujitsu Ltd., for example, claims 42% of the education market in Japan--a segment Apple hasn't cracked. And Olivetti has 20% of the PC market in Italy, where Apple holds a meager 6%. "What we want in the first pass is market makers," Spindler says. "Then we'll go beyond this." To do so, Apple has assembled a 50-person licensing staff, headed by Vice-President Don Strickland.

But ask anyone in the computer industry who doesn't work for Apple what they think of the company's latest licensing strategy. Good odds the answer will be, "Too little, too late."