Power Computing Corporation

Power Computing Corporation
Company type	Private
Industry	Computer hardware
Founded	November 11, 1993; 33 years ago in Milpitas, California, United States
Founder	Stephen “Steve” Kahng
Defunct	September 1997
Fate	Assets acquired by Apple Inc.
Headquarters	Austin, Texas (later years), United States
Area served	Worldwide
Key people	Stephen “Steve” Kahng (Founder and CEO), Michael Shapiro (Executive team), Geoff Burr (VP Sales and Marketing), Joel Kocher (President)
Products	Macintosh-compatible computers ("Mac clones")
Number of employees	300 (1996)

Power Computing Corporation—commonly referred to as Power Computing—holds the distinction of being the inaugural firm authorized by Apple Inc to manufacture Macintosh-compatible systems, also known as "Mac clones." Founded in November 1993 by computer engineer Stephen “Steve” Kahng, notable for his work on the Leading Edge Model D, Power Computing introduced its first Mac clone in May 1995. Adopting a direct-to-consumer, build-to-order sales approach akin to Dell Computer, the company rapidly expanded, shipping 100,000 units and generating $250 million in revenue during its initial year. It was also a pioneer in surpassing $1 million in online product sales.

Through 1997, Power Computing continued to enhance its product lineup, achieving annual revenues of $400 million. However, following Steve Jobs’ return as Apple's interim CEO in July 1997, Apple discontinued the Mac clone initiative. In September 1997, Apple acquired Power Computing’s principal assets for $100 million in stock and terminated the clone manufacturing business.

History

Power Computing was founded on November 11, 1993, in Milpitas, California, with financial backing of $5 million from Olivetti and $4 million from Kahng himself. After receiving Apple’s licensing approval in early 1995, Kahng enlisted Mac industry veteran Michael Shapiro to develop branding and establish the executive team. Manufacturing and operations were set up in Austin, Texas—utilizing former CompuAdd facilities—while engineering offices opened in Cupertino, California, staffed predominantly by ex-Apple Power Macintosh engineers. In 1997, the headquarters relocated near Dell’s campus in Austin until Apple’s acquisition later that year.

Kahng’s strategy centered on streamlining Mac designs to lower production expenses while focusing on mail-order sales channels to accelerate cash flow compared to traditional resellers. He prioritized rapid return on investment through direct customer engagement.

Initially, Apple preferred licensing larger manufacturers, making entry difficult for Kahng despite his reputation as a "master cloner." With support from Olivetti and Apple engineers, he developed a Mac prototype that incorporated a downsized Apple motherboard into standard PC cases using off-the-shelf power supplies and monitors.

Just before the close of 1994, Apple officially designated Power Computing as its first licensee for Macintosh clones. Jim Gable, Apple's director of Mac licensing, commended Kahng’s nimbleness and potential for success.

Power Computing planned to offer clones priced as low as $1,000 starting early 1995. Industry analysts such as MacUser columnist John C. Dvorak anticipated significant market disruption. Upon launch, Macworld observed that although the clones did not introduce revolutionary features or designs, their performance matched Apple's own Macs—demonstrating that Mac clones could serve as viable competitors.

Initial machines

The first Power Computing clones were available in desktop and tower formats and utilized PowerPC 601 processors running at 80, 100, and 110 MHz. These systems competed directly with Apple's Power Macintosh 7100 and 8100 lines, with prices ranging from $1,995 to $2,899.

The system design reflected a sophisticated engineering effort supported by former Apple engineers who had joined Power Computing. Departing from Apple's traditional retail distribution model, Power Computing adopted direct sales with semi-custom configurations delivered within one business day. The company emphasized customer support with a goal of responding to inquiries within three minutes.

In May 1995, Power Computing collaborated with Austin-based Metrowerks to introduce the Power Computing CodeStation—a package combining their clone with the latest PowerPC version of CodeWarrior (CW6 Gold). Offered at discounted rates for developers, actual sales numbers are not publicly available.

By July 1995, volume production of the Power 100 allowed price reductions to $1,699 for the base "Power 100 Starter System." A rapid-shipment program ensured same-day dispatch for popular configurations. The product lineup extended upmarket to the "Power 120 XL," priced at $5,499 and featuring a PowerPC 601+ processor, a 2GB SCSI hard drive, a 17-inch Sony monitor, a 4X-speed CD-ROM, integrated Ethernet, and 32MB RAM.

In October 1995, Power Computing unveiled the PowerWave—the fastest Macintosh-compatible computer available at that time—powered by the advanced PowerPC 604 processor. The company asserted performance superiority over Intel Pentium-based Windows PCs.

At the early 1996 Macworld trade show in San Francisco, Power Computing gained prominence after Apple CEO Michael Spindler canceled his appearance amid financial difficulties. Following another exhibitor's withdrawal, Power Computing secured prime exhibit space at a significantly reduced cost.

During this event, they introduced the PowerCurve series—mid-range Mac OS systems featuring CPU upgradeability based on the PowerPC 601 and utilizing an industry-standard PCI expansion bus. Notably, the PowerCurve 601/120 supported native VGA-style monitors offering enhanced user flexibility.

Market performance

By May 1996, a year following the introduction of Mac clones, Power Computing had sold 100,000 units and grown its workforce to 300 employees. CEO Steve Kahng postponed any personal downtime until after the shipment of the initial 30,000 units, exemplifying focused leadership and dedication.

Geoff Burr, Power Computing's vice president of sales and marketing, noted that approximately half of their buyers would have otherwise purchased directly from Apple, while the remainder might have opted for non-Mac alternatives. This illustrates Power Computing’s dual role in both capturing a portion of Apple's clientele and broadening the overall Mac user base.

In June 1996, Kahng secured a significant contract with Lockheed Martin for 3,000 computers by outmaneuvering Apple through offering machines pre-installed with tailored engineering software. This transaction represented the largest sale of Macs or compatible systems at that time, highlighting Power Computing’s strength in the corporate sector.

Thanks to a robust alliance with IBM, Power Computing gained early access to the most advanced PowerPC processors. From April 1996 through 1997, the firm consistently introduced the fastest Mac OS machines available:

April 1996: Launched the PowerTower equipped with 180 MHz and 166 MHz PowerPC 604 processors—the quickest Macs on the market.
July 1996: Debuted the PowerTower Pro featuring the upgraded PowerPC 604e processor at speeds up to 225 MHz, making it the fastest personal computer worldwide.
May 1997: Released the PowerTower Pro 250, outperforming comparable Pentium and Pentium II Windows-based PCs.
August 1997: Announced but never launched PowerTower Pro G3 models intended to be the first desktops powered by next-generation PowerPC chips.

By 1997, annual sales had reached $400 million, with product evaluations favoring Power Computing over Apple. At Macworld Expo 1997, the company introduced a military-inspired marketing initiative encouraging Mac users to “Fight Back,” utilizing branded Hummers and extensive promotional campaigns. This assertive branding strategy bolstered its market presence and fueled growth during a pivotal industry phase.

Asset acquisition by Apple

In early 1997, Apple sought increased licensing fees from clone manufacturers, leading to tentative renegotiations with Power Computing in June. Nevertheless, following CEO Gil Amelio’s departure in July, Steve Jobs moved to terminate the clone program, perceiving it as harmful to Apple’s hardware sales and unlikely to mirror Microsoft’s earlier success.

At MacWorld Boston in August, Joel Kocher, president of Power Computing, unsuccessfully challenged Apple's tightened licensing restrictions. Subsequently, key executives at Power Computing resigned as the board pursued acquisition options.

On September 2, 1997, Apple purchased essential assets of Power Computing for over $100 million in Apple stock plus approximately $10 million in cash. This transaction reinstated Apple's license for Macintosh-compatible machines and retained vital personnel skilled in marketing, distribution, and engineering—some of whom later contributed to innovations such as the iMac. Contrary to some accounts, Apple did not acquire Power Computing itself; instead, the company emphasized losing its license and encouraged customers to buy remaining clone inventory.

Prior to losing its Apple license, Power Computing had planned Wintel clones and introduced the PowerTrip series of Wintel laptops. However, delays from regulators, supplier litigation, and manufacturing complications led to downsizing. Due to weak sales and production difficulties, the PowerTrip line was discontinued, leaving the company struggling for new directions by spring 1998.

Production was halted by component shortages in 1997; by January 1998, remaining assets were auctioned off. Shareholders reportedly received Apple stock proportional to their holdings in the now-defunct enterprise.

Apple offered complimentary upgrades to Mac OS 8.1 for existing Power Computing Macintosh clones and extended technical support until December 31, 2004. This made Power Computing one of only two clone manufacturers authorized to receive official Mac OS 8 upgrade disks (the other being UMAX Technologies).

Machine upgrades

Power Computing’s Macintosh clones ranked among the most favored in the market. Their models featuring PowerPC 603 or 604 CPUs were officially compatible with Mac OS 8.1, as Apple issued upgrade disks after acquiring the company—exceeding the typical limit of Mac OS 7.6 found in most other clones. While not formally supported, these systems were capable of running Mac OS 9.1 through unofficial upgrades.

Although Power Computing machines utilized PowerPC 603e or 604e processors, they lacked native support for Mac OS X. Nevertheless, by installing G3 or G4 processor enhancements and employing the XPostFacto 4.0 utility, users could run various versions of Mac OS X up to 10.4 Tiger, albeit with certain operational constraints.

Notes

References

Power Computing press releases (BusinessWire)
Markoff, John. "For Apple, Clones and Competition." The New York Times 29 December 1994
Egan, Diane. "Mac Attack Begins: Apple Licenses OS." Electronic Buyers' News 2 January 1995
Rebello, Kathy. "IT JUST MAY BE THE YEAR OF THE APPLE." Business Week 16 January 1995
Piller, Charles. "First clones." Macworld 1 April 1995
Carlton, Jim. "King Kahng: Master of Cheap Clones May Hold Key to Fate Of Apple Computers." The Wall Street Journal 14 April 1995
Rizzo, John. "Clones' corporate clout." MacUser 1 May 1995
Crabb, Don. "Note to Power Computing: make portable clones, too." MacWEEK 15 May 1995
Moran, Susan. "Apple seen getting boost from Mac clones in South Korea." Reuters News 24 September 1995
Ladendorf, Kirk. "Power Computing steps up from clonemaker to innovator." Austin American-Statesman 30 October 1995
Ristelhueber, Robert. "Power Computing banks on aggressive designs and mail order channel." Electronic Business 1 November 1995
Ladendorf, Kirk. "Power Computing locates space it needs in Round Rock." Austin American-Statesman 29 December 1995
Newsbytes. "Macworld - Power Computing Offers New Mac Clone" 11 January 1996
Ryer, Kelly and Pearlstein, Joanna. "Power halts meltdown after operations crisis." MacWeek 25 March 1996
Carlton, Jim. "Power Computing Gains Towering Presence as Cloner." The Wall Street Journal 20 May 1996
Burrows, Peter. "Up Front: SILICON SAGAS APPLE COULD LEARN AT ITS CLONE'S FEET." Business Week 5 August 1996
Walsh, Jeff. "Apple freezes Mac OS May halt licensing OS to third parties." InfoWorld 25 August 1997
Ortiz, Catalina. "Apple buying Macintosh clone maker Power Computing for $100 million." AP Newswires 2 September 1997
Markoff, John. "Apple Decides Cloning Isn't Its Route Back To Profitability." The New York Times Section D; Business/Financial Desk 3 September 1997

External links