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September 2, 1997updated 03 Sep 2016 9:01pm

APPLE BUYS POWER COMPUTING FOR $100M STOCK: PUTS LID ON CHRP

By CBR Staff Writer

In a dramatic move, Apple Computer Inc solved one of its larger headaches yesterday by acquiring Power Computer Corp, the $400m revenue clone maker that was growing increasingly unhappy with Apple’s failure to come to terms with the Macintosh clone market. Apple will pay $100m in stock for the core assets of the company, including key employees with expertise in direct marketing, distribution and engineering, the customer database, and the license to distribute the Mac OS operating system. Effectively, the move brings Power back under Apple’s control. It had won a considerable amount of business since it was founded in 1995, but mostly at the expense of Apple itself. Apple board member and temporary leader Steve Jobs said that Power has pioneered direct marketing and sales in the Macintosh market – we look forward to learning from their experience and welcoming their customers back into the Apple family. It remains to be seen whether or not Apple is interested in the Intel-based line of systems Power had been working on, sporting compatible peripherals with the PowerPC line, which were due to hit the market shortly. Power Computing will retain its name, and will continue to sell Mac OS compatible systems until the end of this year. Apple’s on-going disputes with Power led to the resignation recently of Joel Kocher, president and chief executive officer. There are, of course, other clonemakers, notably Umax Computer Corp and Motorola Computer Systems Inc. In a memo to employees, Apple’s de faco boss Steve Jobs explained that the licensees want to expand their licenses to include the use of the Mac OS on CHRP and portable computers, neither of which are permitted under the existing license agreements. Apple was willing to expand the licenses to include these rights, but only in exchange for raising the license fee to a level which, we believe, reflects a fair share of the expenses to engineer and market the Mac OS platform. Power Computing and other clone manufacturers rejected this offer. He effectively put a lid on further expansion of the Mac clone market, saying Apple will honour all of its signed license agreements, but we have decided not to expand the licenses to include a version of Mac OS for CHIRP hardware.

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