Why Mac cloning today wouldn’t be like Mac cloning ten years ago

Macworld | Reliving the clone wars:

“The clone wars were over, but Apple had sustained serious casualties. In 1997, Apple sold a mere 2.8 million Macs.

On May 6, 1998, however, the rebuilding began with the announcement of the Bondi Blue iMac, the machine that would begin Apple’s resounding comeback. Since then Apple has seen its stock soar as it released Mac OS X, made billions from the iPod, and switched from PowerPC processors to chips built by Intel.

It’s the move to Intel chips that has opened the door for a company like Psystar to offer its OS X-compatible PC. And it’s also led some observers to suggest that Apple might again institute a licensing program. Michael Dell of Dell Computers has personally expressed interest in making OS X–compatible systems.

The chances of that happening? Slim to none, given the impact of Mac clones on Apple’s bottom line the last time around.”

There’s one minor issue with a lot of these analyses of why Apple was right to pull the plug on the clone market: they miss the most fundamental point of all.

Apple was losing sales because its machines were crap.

At the time, Apple’s line up was pretty awful. It was producing cheap, horrible machines for consumers which had no style, and just looked like slightly quirky beige boxes. Its professional range was just dull, and not well-engineered.

Apple’s sales dropped from over four million to less than three million not because of the effects of the cloners, who sold a mere handful of hundreds of thousands of machines, but because, fundamentally, its product range was dire. PC makers were building better looking, cheaper machines which outperformed Apple and actually cost less.

The cloners were the least of Apple’s problems. Windows 95 was a better option for consumers, and Windows NT was more reliable for professionals. You had to be a little bit crazy to pay Apple good money for things like the Power Mac 4400, a machine which looked so bland it was like watered-down cabbage soup. Then there was the PowerBook 5300, with its exploding batteries, flecks of disappearing plastic, and shoddy performance.

(Incidentally, I have never seen a solid set of numbers on how many sales the clone programme robbed Apple of, and how much money it cost them. The Macworld feature above gives a sales figure for Power Computing in 1996 of 100,000 machines, of which half were probably old Apple customers. That’s 50,000 lost sales to Apple, out of a total Mac market sales of over 4 million – mostly at the low end of the market, where margins are thinnest anyway. It also means 50,000 additional sales of Mac OS, the proceeds of which went directly to Apple’s bottom line. The word “peanuts” pops into mind when I think of the real amount Apple lost directly through cloning.)

Today, things are somewhat different. Apple’s range of machines has never been stronger. Its machines are winning it market share, because they are great designs, with good performance, reliability and incredibly good marketing. Does anyone seriously think that a cloner could steal serious market share from Apple, in any market that Apple chooses to compete in?

However, there exist certain niches which, for its own reasons, Apple doesn’t want to play in. Low-power sub-notebooks, like the eeePC for one. Tablet PCs for another. These niches are either too small for a big company to bother with, or low-margin businesses that don’t make sense for Apple strategically.

Apple does not want to fill these niches. Other companies could, at no risk to Apple’s market share.

Given the way that Jobs thinks, I don’t think it’s going to happen, ever. I don’t believe that Steve Jobs killed the cloners because they were a significant drain on Apple, but because he regards cloning and cloners as simply beneath contempt. Cloning is what companies like Dell do, and if Steve Jobs defines Apple as anything, it’s “not Dell”. Apple creates systems, and systems involve both hardware and software. Doing one without the other simply makes no sense to Steve.

But don’t make the mistake of thinking that because a weak, feeble, and directionless Apple ten years ago couldn’t compete with some upstarts that the company of today would be in the same position. If Apple did license Mac OS X to someone, it would be in a much, much stronger position to compete with companies that, after all, it should always have significant advantages over.

(One final footnote: It’s absolutely no surprise to me that so many of the machines in Remy Davison’s list of the 10 Worst Macs Ever come from around the clone period. For Apple, the mid-1990′s really was turkey season.)