Power Computing





Power Computing was a short-lived manufacturer of Apple Macintosh-compatible
computers. Much of its management, including president and chief operating
officer Joel Kocher, had worked at Dell Computer, and, like Dell, it
followed a direct, build-to-order sales model.

Based in Austin, Texas and founded by Steve Kahng with $13 million, Power
Computing entered the market in 1995 with a series of machines based on the
PowerPC 601 microprocessor. In all, PowerComputing released 8 different
lines of Mac-compatible computers from 1995 to 1997. The computers were
generally less expensive than competing offerings from Apple Computer and
often were faster. Its quarterly sales grew from $21.5 million in its first
quarter to a peak of $98.5 million in Q4 1996.

As Apple's fortunes fell, Power Computing's fell as well. Apple started
demanding higher royalties from Power and other clone makers. This combined
with inventory problems to cause Power Computing to sustain heavy operating
losses during most of 1997, after two years of explosive growth. In an
effort to reduce its dependence on Mac clone sales, Power Computing
announced plans in the summer of 1997 to release a line of IBM compatible
computers as well. Later that summer, after Steve Jobs returned to Apple, he
announced an end to the Mac clone business. Apple bought Power Computing's
Mac license and related assets in September 1997 for $100 million in stock.
Following the sale, Power Computing was hit with lawsuits from its suppliers
and exited the PC clone business after only a month. The company went out of
business soon after.