IBM plans the big Mac

 

IBM and Apple have announced their much expected deal allowing IBM to license the Apple Macintosh operating system (OS) in a move to boost the Mac's dwindling market share and fuel sales of PowerPC chips.

IBM will also have rights to sub license the Mac operating system, but Apple would still certify each computer system sold to assure compatibility. IBM said it has no current plans to develop its own Macintosh clones, but said it would not preclude that from occurring in the future.

IBM and Apple have been partners, along with Motorola, since 1991 in an effort to develop the PowerPC architecture as an alternate microprocessor to challenge Intel's (microchip) and Microsoft's (OS) dominance of the industry.

"Today's announcement marks a new chapter in our relationship," said Michael Attardo, general manager of IBM's microelectronics division. "We believe that starting today, the true potential of the PowerPC begins to be met."

IBM's microelectronics unit is the biggest developer of the PowerPC chip. It hopes to sub license the operating system to companies that develop motherboards. The companies also announced IBM's first sub licensing deal to Datatech Enterprises and Taiwan's electronics giant Tatung and said more deals will follow. They are targeting Asia and the Pacific Rim as key markets. (Datatech is a US computer maker with operations in China, Taiwan and Europe.)

The licensing agreement covers the System 7.5 Mac OS and the next update of the system, code named Copland, which has been pushed back for release in the first part of 1997, instead of the end of 1996.

Apple executives said the pact is another big step in the company's commitment to opening up the licensing of the Macintosh platform to other computer makers.

"From Apple's viewpoint, this broadly expands the opportunity for not only the PowerPC but also the Macintosh operating system" said George Scalise, Apple's chief administrative officer. "We are talking about a vastly expanded opportunity."

For years, Apple refused to license its software to other companies to create a Mac clone market, an obstinacy that was seen by many analysts as one of the key reasons Apple's market share has dwindled.

With its new chief executive Gil Amelio just installed, Apple signed a similar licensing pact in February with Motorola, which also gains the rights to sub license the Mac OS to other computer makers. Amelio has pledged that he will aggressively expand Apple's licensing programme as part of his plan to turn around the troubled computer maker.

"For IBM, and then Motorola, anything that they can do to expand the volumes is self serving," said John Dean, a Salomon Brothers analyst. "They have made the investment and they have to try and make it work."

Dean said the deal is not one that will have near term results and, perhaps in a year, both companies will see the benefits of a bigger Mac market.

But he also pointed out an analogy with IBM and the infant PC market of the early 1980s. After the clone market grew, IBM's share of the PC market started dropping.

"An open system is great for software guys, peripheral guys, some hardware guys, but it doesn't always mean that the person who opened the market is a benefactor," Dean said.

The companies also said they are working together on a "subnotebook project", but declined to be more specific.

"We can speak to the fact that we are interested in the notebook marketplace, but we are not making any announcement about notebooks at this time," said Jesse Parker, director of segment marketing. "But I would advise you to stay tuned."

. Meanwhile, Apple in the US has launched a large scale repair programme for some of its best selling desktop and laptop models.

Apple spokeswoman Cindy McCaffrey said the recall programme, in which machines will be repaired or replaced, will not have a material effect on Apple's finances, although she would not discuss how much the company estimates the effort will cost.

One industry observer said that, based on the millions of computers that Apple ships, repairing even tens of thousands would amount to "peanuts".

The flaws Apple identified are:

. Performas and two Power Macintosh lines: flaws in the logic board might cause the computers to freeze. Also, some of the monitors might show sudden changes in colour because of a faulty cable.

. PowerBooks: a flaw with the power connector could cause the computer to stop and also a potential for the display case to crack at the hinge.

Apple Ireland could not be contacted for comment, but sources indicated that the Irish factory was not expecting large scale repairs.