Apple Computer gobbling up maker of Macintosh clones

Apple Computer Inc. is buying Macintosh clone maker Power Computing for $100 million, neutralizing some of the competition that has taken a piece of Apple's sales and giving the company new expertise selling machines directly to the public.

Apple is also getting back the license that allows Power Computing to sell Macintosh-based machines. Power Computing will stop selling the clones at the end of the year."Power Computing has pioneered direct marketing and sales in the Macintosh market, successfully building a $400 million business," said Steve Jobs, the Apple co-founder who has been leading the company while it looks for a new chief executive. "We look forward to learning from their experience and welcoming their customers back into the Apple family."

Power Computing, the first company Apple allowed to make Mac clones, has been embroiled in a messy licensing dispute with Apple over how much it will pay to keep making the machines.

Apple is using its stock to pay for the purchase, which had been rumored on the Internet for weeks. The deal ends contentious licensing talks between Power Computing and Apple, which has been rethinking its decision to let other companies copy the Mac.

The Power Computing name will remain independent of Apple, but it wasn't immediately clear what Stephen Kahng, Power Computing founder and chief executive, planned to do with the name. The company earlier had said it was considering making clones of computers that run Microsoft's Windows software.

Last month, Power Computing's outspoken president, Joel Kocher, resigned weeks after chastising Apple for not quickly licensing its latest technology. Clone makers, customers and industry observers have been alarmed by what they fear will be a reversal of Apple's 1994 licensing strategy.

The Power Computing deal is the second major acquisition for Apple in less than a year. Last December, it rocked the high-tech world by announcing its purchase of Next Software Inc., a company Jobs started after leaving Apple in 1985. Apple is using Next's technology to develop its future-generation operating system.

The Next purchase returned Jobs to Apple, initially as an adviser. But after Apple's board ousted chairman and chief executive officer Gil Amelio July 9, it became apparent that Jobs - who opposed Apple's decision to allow clones - was Apple's de facto CEO.