Power Computing Corporation

Power Computing Corporation was an American personal-computer company founded in November 1993 by computer engineer Stephen Kahng. It became the first company licensed by Apple to manufacture Macintosh-compatible computers, commonly called Mac clones, and briefly established itself as one of the most aggressive competitors in the Macintosh hardware market. Kahng had previously been associated with the design of the Leading Edge Model D, an IBM PC-compatible computer. Power Computing began with financial support from Olivetti and Kahng and developed its operations around Austin, Texas, and Cupertino, California. The company recruited engineers with Apple experience and used Apple's licensing cooperation to create systems based on the PowerPC architecture and the Mac operating system. Its production strategy emphasized simpler designs, standardized components, rapid configuration, and direct sales rather than the slower distributor and reseller model traditionally used by computer manufacturers. Power Computing's first Macintosh-compatible systems shipped in May 1995. The initial desktop and tower models used PowerPC 601 processors and were positioned against Apple's Power Macintosh 7100 and 8100 families. Rather than compete primarily through industrial design, Power Computing emphasized processor speed, expandability, aggressive pricing, quick shipment, and responsive technical support. Customers could order semi-customized machines directly, often receiving them shortly afterward. The company also promoted a short-response customer-service target and used telephone follow-up to understand customer requirements. The company expanded its portfolio rapidly. Its Power 100 and related systems targeted mainstream buyers, while the PowerWave, PowerCurve, PowerTower, and PowerTower Pro lines addressed performance-oriented users, developers, and professional customers. Through relationships with IBM and other PowerPC ecosystem participants, Power Computing often obtained newer processors early and marketed some of the fastest personal computers available on either the Macintosh or Windows-compatible platforms. It also partnered with Metrowerks on the CodeStation, a developer-oriented package combining Power Computing hardware with CodeWarrior software. Power Computing grew unusually quickly for a new computer manufacturer. Within its first year of sales it reportedly shipped approximately 100,000 systems and generated about $250 million in revenue. By 1996 it employed roughly 300 people, won a large institutional order from a Lockheed Martin unit, and claimed a significant record in Internet commerce. Its annual revenue was reported at approximately $400 million by 1997. The business attracted customers who might otherwise have bought Apple computers, but it also argued that lower prices and higher performance expanded the overall Macintosh market. The company's success was inseparable from Apple's licensing strategy. Apple had hoped that third-party manufacturers would enlarge the installed base of Macintosh-compatible systems and generate licensing income. After Steve Jobs returned to Apple as interim chief executive in July 1997, however, Apple reconsidered the program. Jobs viewed clone manufacturers as diverting sales from Apple's own hardware rather than creating a sufficiently large new market. Negotiations over higher licensing fees and revised terms failed to produce a durable agreement. In September 1997, Apple acquired key assets of Power Computing for more than $100 million in Apple stock and approximately $10 million in cash. The transaction returned Power Computing's Macintosh license to Apple and gave Apple access to selected employees and capabilities in engineering, distribution, and direct marketing. It did not amount to a purchase of the entire corporation. Power Computing's remaining business rapidly deteriorated. A proposed transition into Windows-compatible computers, including the announced PowerTrip laptop line, was abandoned amid manufacturing difficulties, weak sales, supply shortages, regulatory delays, and legal disputes with suppliers. Physical assets were auctioned by early 1998, and the corporation became defunct. Power Computing remains notable for demonstrating that a small, direct-sales company could compete effectively with Apple in the Macintosh market when it combined fast processor adoption, build-to-order fulfillment, aggressive pricing, and unconventional marketing. Its machines became among the most popular Macintosh clones. Apple later supplied Power Computing customers with an upgrade path to Mac OS 8.1 and continued technical support for the machines until the end of 2004, preserving a limited afterlife for the brand even after the company itself had disappeared.

Power Computing Corporation was established in Milpitas, California, on November 11, 1993, by Stephen Kahng, with initial backing of approximately $5 million from Olivetti and $4 million from Kahng. Kahng brought experience from the IBM PC-compatible market and sought to apply a more efficient manufacturing and sales model to Macintosh-compatible computers. The opportunity emerged when Apple began considering licenses for third-party Macintosh manufacturers. After Power Computing received notice that it could pursue a license, Kahng recruited Macintosh veteran Michael Shapiro and assembled a management team. The company's manufacturing and operations presence was established in Austin, Texas, in facilities previously associated with CompuAdd, while engineering work was conducted in Cupertino, California, with substantial Apple engineering experience represented on the team. Power Computing designed its machines to reduce cost and simplify production. Its engineers adapted the Macintosh system architecture to fit more conventional personal-computer enclosures, using standardized components such as PC-style power supplies and commonly available monitors. Apple engineers assisted the early prototype effort. The resulting computers were not intended to imitate Apple's industrial design; they were intended to offer comparable Macintosh functionality with stronger specifications, lower prices, and greater configurability. The first systems shipped in May 1995. Based on PowerPC 601 processors running at different clock speeds, the initial desktop and tower configurations competed with Apple's Power Macintosh systems. Power Computing sold directly to customers, accepting orders for semi-custom configurations and emphasizing quick shipment. The company supported this model with telephone service, post-sale follow-up, and a stated objective of responding to inquiries within minutes. This approach reduced dependence on distributors and gave the company faster access to customer cash. The product range expanded quickly. The Power 100 line benefited from volume production and lower entry pricing, while higher-end configurations such as the Power 120 XL offered larger storage, more memory, faster optical drives, Ethernet, and bundled displays. The PowerWave, introduced in 1995, used the PowerPC 604 and was promoted as a particularly fast Macintosh-compatible system. In early 1996, Power Computing introduced the PowerCurve family, including systems using PCI expansion and support for standard VGA-style displays. The PowerTower and PowerTower Pro followed with increasingly fast PowerPC 604 and 604e processors. Power Computing also pursued software developers. Its CodeStation package combined Power Computing hardware with Metrowerks' CodeWarrior development environment and was sold through Metrowerks at developer-oriented pricing. The company cultivated relationships with IBM and other PowerPC suppliers, helping it secure advanced processors early. From 1996 into 1997, reviews and company marketing frequently positioned its systems as faster than comparable Apple machines and, in some configurations, faster than contemporary Intel-based Windows PCs. Commercial growth was rapid. The company reportedly shipped 100,000 units during its first year of sales and generated approximately $250 million in first-year revenue. By May 1996 it had about 300 employees. A Lockheed Martin unit purchased 3,000 computers after Power Computing agreed to customize the systems with engineering software, making the order one of the largest Macintosh-related computer purchases reported at the time. Power Computing's annual revenue was reported to have reached approximately $400 million by 1997. The company also claimed an early Internet-commerce milestone by selling more than $1 million in products online. Its marketing became increasingly confrontational and identity-driven. At the 1997 Macworld Expo, the company presented a military-themed “Fight Back” campaign, using camouflage clothing, large displays, posters, merchandise, and branded vehicles to frame Power Computing as an insurgent alternative to Apple. This helped make the company highly visible among Macintosh enthusiasts, although the business remained dependent on Apple's operating-system license and on the broader health of the Macintosh market. Apple's cloning policy became more difficult after the company's financial problems and leadership changes. In early 1997 Apple sought substantially higher licensing revenue and stricter terms from clone manufacturers. Power Computing and Apple reached a tentative understanding in June, but the arrangement was not completed before Gil Amelio left Apple in July and Steve Jobs returned as interim chief executive. Jobs opposed the existing clone strategy, arguing that it reduced Apple's hardware sales without creating enough new platform demand. Power Computing's leadership attempted to resist the new terms, but the effort failed; President Joel Kocher and other executives resigned as the board moved toward an acquisition. On September 2, 1997, Apple acquired key Power Computing assets for more than $100 million in Apple stock and approximately $10 million in cash. Apple recovered the Macintosh license and obtained rights related to retaining employees with expertise in engineering, direct marketing, and distribution. The corporation itself was not simply absorbed as an ongoing Apple subsidiary. Power Computing attempted to consider a post-Macintosh future, including Windows-compatible PowerTrip laptops, but supply shortages, manufacturing problems, weak sales, regulatory delays, and supplier litigation undermined the plan. Production ceased, the remaining physical assets were auctioned by late January 1998, and shareholders received Apple shares representing their interests. Apple later provided Power Computing customers with an upgrade route to Mac OS 8.1 and continued technical support for the machines through December 31, 2004. Some systems could run later operating-system versions with unofficial workarounds, but Apple officially supported the acquired machines only to the specified upgrade level. Power Computing's importance therefore lies less in its longevity than in the brief period during which it showed that a focused, direct-sales company could challenge Apple's Macintosh hardware business on speed, price, configuration, and customer service.

• 1998

  Physical assets auctioned

  [1]Power Computing Corporationen.wikipedia.org

  The remaining physical assets were auctioned and the corporation ceased operating as a computer manufacturer.

• 1997

  Apple acquires key assets

  [1]Power Computing Corporationen.wikipedia.org

  Apple acquired key assets and the Macintosh cloning license, ending Power Computing's core business.

• 1996

  PowerCurve introduced

  [1]Power Computing Corporationen.wikipedia.org

  The PowerCurve family brought mid-range, upgradeable systems using PowerPC processors and PCI expansion.

• 1996

  100,000-unit sales milestone

  [1]Power Computing Corporationen.wikipedia.org

  The company reached approximately 100,000 systems sold about a year after beginning shipments.

• 1996

  PowerTower Pro announced

  [1]Power Computing Corporationen.wikipedia.org

  Power Computing introduced PowerTower and PowerTower Pro systems using increasingly advanced PowerPC 604 and 604e processors.

• 1995

  First systems ship

  [1]Power Computing Corporationen.wikipedia.org

  Power Computing began shipping PowerPC 601-based Macintosh-compatible desktop and tower systems.

• 1995

  CodeStation introduced

  [1]Power Computing Corporationen.wikipedia.org

  Power Computing and Metrowerks offered CodeStation, a developer package pairing Power Computing hardware with CodeWarrior software.

• 1994

  Selected as Apple's first Macintosh clone licensee

  [1]Power Computing Corporationen.wikipedia.org

  Apple selected Power Computing as its first authorized third-party Macintosh-compatible computer manufacturer.

• 1993

  Company founded

  [1]Power Computing Corporationen.wikipedia.org

  Stephen Kahng founded Power Computing Corporation in Milpitas, California, with financial backing from Olivetti and Kahng.

A performance-focused, value-oriented Macintosh-compatible computer manufacturer built around direct, build-to-order sales, rapid fulfillment, processor leadership, expandability, and aggressive competition with Apple.

• Macintosh-compatible desktop and tower computers · 1995

  Power Series

  The initial Power Series systems were PowerPC 601-based Macintosh-compatible computers offered in desktop and tower configurations. They targeted buyers seeking Macintosh software compatibility at prices and performance levels competitive with Apple's Power Macintosh range. Their direct-sales configuration model allowed customers to choose semi-custom hardware combinations.

• Macintosh-compatible desktop computer · 1995

  Power 100

  The Power 100 was a mainstream PowerPC system whose production scale enabled Power Computing to reduce the price of its starter configuration. The broader family included quick-ship configurations and higher-end options with larger storage, additional memory, faster CD-ROM drives, Ethernet, and optional displays.

• Performance Macintosh-compatible computer · 1995

  PowerWave

  Introduced in late 1995, the PowerWave used the PowerPC 604 processor and was marketed as one of the fastest Macintosh-compatible systems available. It represented Power Computing's strategy of competing through processor performance and rapid adoption of new PowerPC generations rather than through Apple's proprietary industrial designs.

• Upgradeable mid-range Macintosh-compatible computer · 1996

  PowerCurve

  The PowerCurve family was a mid-range line built around PowerPC processors and the PCI expansion bus. Its upgrade-oriented architecture appealed to users who wanted a longer-lived system, while selected configurations offered compatibility with standard VGA-style monitors.

• High-performance Macintosh-compatible tower · 1996

  PowerTower and PowerTower Pro

  The PowerTower family formed the high-performance core of Power Computing's range. PowerTower systems used PowerPC 604 processors, while PowerTower Pro models adopted the faster 604e generation and reached clock speeds that made them leading personal computers of their period. Planned G3-branded models were announced but never built.

• Developer computer bundle · 1995

  CodeStation

  CodeStation combined a Power Computing Macintosh-compatible computer with Metrowerks CodeWarrior development software. It was sold through Metrowerks at discounted developer pricing and was intended for programmers building software for the PowerPC Macintosh ecosystem.

• Planned Windows-compatible laptop · 1997

  PowerTrip

  PowerTrip was an announced attempt to move beyond Macintosh-compatible systems into Windows-compatible laptops. The line did not become a viable successor business and was canceled amid manufacturing problems, weak sales, financial pressure, and the collapse of Power Computing's operations.

• 1997Fight Back

  United States · Macintosh enthusiast market

  Power Computing used a military and insurgency theme at Macworld Expo 1997 to present itself as the challenger defending Macintosh users against Apple's pricing and product decisions. Employees wore camouflage, displays used combat imagery, and the company distributed posters, flyers, shirts, stickers, and other branded materials featuring Stephen Kahng.

  Outcome. The campaign increased Power Computing's visibility among Macintosh enthusiasts, but it could not overcome Apple's decision to withdraw or sharply restrict the cloning license.

  Source

• 1997

  Accept Apple's acquisition of key assetsM&A

  Background

  Steve Jobs opposed Apple's existing Macintosh cloning strategy and sought to recover control of Macintosh hardware.

  Action taken

  Power Computing's board accepted Apple's acquisition of key assets, including the Macintosh license, for Apple stock and cash.

  Aftermath

  The Macintosh clone business ended, executives departed, and the remaining corporation failed during its attempted transition to a new business.

  Reported transaction consideration. More than $100 million in Apple stock and approximately $10 million in cash (September 2, 1997)

  Source

• 1995

  Launch Apple's first licensed Mac cloneProduct launch

  Background

  Apple began licensing Macintosh-compatible hardware in an effort to broaden the platform.

  Action taken

  Power Computing shipped PowerPC 601-based desktop and tower computers compatible with Macintosh software.

  Aftermath

  The launch established Power Computing as the leading early challenger in Apple's clone program.

  Source

• 1993

  Adopt a direct, build-to-order sales modelStrategy

  Background

  Power Computing entered a market dominated by established computer manufacturers and distributors.

  Action taken

  The company sold semi-customized systems directly to customers, emphasizing rapid shipment, credit-card payment, and direct technical support.

  Aftermath

  The model helped Power Computing grow rapidly and compete on price and fulfillment speed.

  Source

• 1997

  Apple acquires key Power Computing assets[1]Power Computing Corporationen.wikipedia.org

  M&A

  Apple acquired key assets, the Macintosh cloning license, and access to selected employees, effectively ending Power Computing's clone business.

• 1997

  Power Computing exits the Macintosh clone market[1]Power Computing Corporationen.wikipedia.org

  Product generation

  Following Apple's change in licensing policy and the asset transaction, Power Computing stopped producing Macintosh-compatible systems.

• 1996

  Power Computing reaches 100,000 systems sold[1]Power Computing Corporationen.wikipedia.org

  Other

  Approximately one year after beginning sales, Power Computing reached the reported milestone while expanding its workforce and customer base.

• 1995

  First Power Computing Macintosh-compatible systems ship[1]Power Computing Corporationen.wikipedia.org

  Product launch · Product generation

  The company began shipping PowerPC-based desktop and tower systems through a direct-sales model.

• 1994

  Power Computing becomes Apple's first Macintosh clone licensee[1]Power Computing Corporationen.wikipedia.org

  Other

  Apple selected Power Computing as the first company authorized to manufacture Macintosh-compatible computers, opening a new phase in Apple's licensing strategy.

1. 1Power Computing Corporationen.wikipedia.org