Guy on clones...

CobraBoy! (
Wed, 3 Sep 1997 20:34:59 -0800

Date: Wed, 3 Sep 97 09:58:41 -0700
From: Guy Kawasaki <>
Subject: Guy's Perspective on the PowerComputing Deal
Message-ID: <>

The bottom line on the clone issue is this: our greatest barrier is the
public's perception that Apple is going to die, so it is afraid to buy
Macintoshes. Short-term profitability has become not simply a financial
issue but a marketing one!

Thus, it's crucial to return to short-term profitability not only for the
cash but also for the comfort level of customers and potential customers.
Basically, our clone business was so badly implemented that we were
literally losing money with each one that was sold. Surely this wasn't
the only thing we did wrong, but it was a big part of our problems.

By buying some of the core assets of PowerComputing (ie, the license), we
cleaned up the biggest part of the clone issue, and we hope that this
will help lead to short-term profitability which will lead to greater
"comfort" in the marketplace which will lead to more Macintoshes being
sold in the future which will lead to Apple returning to the forefront of

Had we not bought the license back we would have continued to lose money,
and therefore the public's confidence that we would survive. And Apple
would have died--taking all the clone manufacturers with us. Now at least
we have a shot.

So the decision was very difficult and not without great risk. But
continuing along as things are was just as risky, IMHO. Up to the very
last moment we were trying to negotiate a mutually beneficial
arrangement...but it did not come to pass.

So the issue was very complex, and the decision was made with a lot of
gnashing of teeth, but it's done, and we're moving on. I hope this
provides some clarification. I close with this thought: Doubt is not the
opposite of faith. Doubt is part of faith.*



* I wish I could claim that I thought of this saying, but I stole it from
a sermon at Menlo Park Presbyterian Church.


Care about people's approval and you will be their prisoner.
-Toa Te Ching

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