With the rules changing every time a new executive walks through Apple Computer's revolving management doors, Motorola formally removed itself from the Macintosh cloning game on Thursday, effectively saying it is taking its ball and going home.
"Apple has made its decision.... Now we have made ours," said Joe Gugliemi, corporate vice president and general manager of Motorola Computer Group. "We will be phasing out our investments" in the Macintosh market, discontinuing all new designs and killing off the next-generation Starmax Pro 6000 before shipping a single unit, Gugliemi said during a teleconference.
That decision will cost Motorola some US$95 million - to be reflected by a special charge in its third quarter, the company reported. It may also mean layoffs primarily in its sales force, although the majority of the clonemaking personnel will be shifted to other divisions within the company. In the short term, Motorola expects its customer-support lines to ring off the hook with questions about the decision. The company, which will continue selling the Starmax line through the end of the year, is extending its 90-day phone support to a full year and will continue its five-year warranty program.
Apple appeared to be unfazed by the move it basically engineered by refusing to budge on licensing for the Common Hardware Reference Platform, a previously agreed-upon standard that would allow clonemakers to build Macintosh machines without depending on Apple hardware. Apple was well aware that Motorola's Starmax Pro 6000, unveiled at Macworld in August, was based on CHRP and couldn't make it to market without a license.
"We respect their decision," said Apple spokeswoman Katie Cotton, while pulling a trump card from her pocket. "Apple and Motorola have a strong business relationship," she added, explaining that that relationship amounts to $300 million a year in Apple purchases of Motorola semiconductor products.
That connection could be considered a kind of lawsuit insurance, despite the fact some would say Apple had reneged on its original agreements. Motorola had a firm commitment to future licensing from former Apple CEO Gil Amelio, (as did Power Computing - which was forced to sell its Mac clone business to Apple just last week when it could not get Cupertino to make good on that agreement). But, when Apple co-founder Steve Jobs came back on board earlier this year and the company decided to "revisit" its licensing program, all the previous deals seemed to disappear.
"This isn't the end of this," said James Staten, an analyst at market research firm Dataquest. His company is already advising its customers to reduce their investment in the Mac platform and forecasting that while Apple's plan may mean profitability in the short term, it's almost certain to fail over time. "I wouldn't be a bit surprised to see a lawsuit," he said.
Even Gugliemi said Motorola has "looked at and continues to look at all the options," hinting at the possibility of legal recourse. However, he stressed that the missing element in pushing the clone market forward isn't just the license, but Apple's commitment to making it work. As he put it: "You can sue for divorce, but you can't sue for marriage."
