Apple Outlines "Expanded Markets" Licensing Strategy for Mac OS

Licensing to Take Phased Approach, Focusing First on Vendors with Complementary Strengths

CUPERTINO, California--September 19, 1994--Apple Computer today outlined how it plans to license the Macintosh operating system to other personal computer vendors. The company will take what it calls an "Expanded Markets" approach, licensing initially to companies with strengths that are complementary to Apple's; then, over time, licensing more broadly to a wider range of vendors.

These licensing activities are planned to result in a variety of personal computer vendors bringing to market personal computers based on the Macintosh operating system and that run Macintosh application software.

"Our number one licensing objective is to create a business model that's attractive, sustainable, and profitable for our licensees, and that creates new opportunities for ISVs and other third-parties" said Don Strickland, Apple's vice president in charge of Licensing activities. "As a result, we've developed a plan that is intended to allow our licensees to expand their businesses with new Macintosh solutions--and at the same time to expand overall acceptance for the Macintosh OS. After much discussion with potential licensees, our developers, and our customers, we're confident we've come up with a sensible plan that's a win-win for all involved." Strickland added, "We believe that licensing offers software vendors a broader installed base of Macintosh platform on which they can develop and provide new technical innovations."

Licensing is an important part of the company's overall market share strategy which also includes initiatives regarding extending the Macintosh platform's price/performance leadership, increasing cross- platform compatibility, and increased marketing investments.

Apple intends to give licensees flexibility and choices regarding when and how they will market their Macintosh-based systems. In the first phase of Apple's licensing efforts, Apple aims to license the Mac OS to companies which have expertise that complements Apple's traditional strengths. Such expertise could include unique technical capability to create value-added solutions, or distribution channels to reach customers in geographies where Apple has limited presence. Over time, Apple aims to license more broadly to a more diverse group of vendors.

Initially, Apple plans to license its core Mac OS (the recently announced System 7.5) and elements of its PowerPC RISC-based hardware architecture as needed to preserve some of the distinguishing features of the Macintosh, such as exceptional ease-of-use and true "plug-and-play" capabilities. Apple will also provide engineering and development support to its licensees, to assist them in bringing products to market rapidly.

Reference Platform Work on Track

Apple, IBM, and Motorola have made significant progress in their work on the definition of a PowerPC-based reference platform (a reference platform is a set of technical specifications and designs which enables vendors to choose from multiple operating systems). The reference platform is expected to be consistent with the current Power Macintosh family and to support not only the evolution of the Mac OS, but other operating systems, such as OS/2 and NT. The reference platform is expected to respond to the needs of a wide range of customers.

"Apple continues to work on the definition of a PowerPC-based reference platform, with key companies such as IBM and Motorola, so that in the future customers will be able to use a range of operating systems on our PowerPC-based systems," said Strickland. "We believe that the steps we are taking now will bring us closer to converging with IBM on a platform."

"Motorola is excited about the opportunity to accelerate the already popular PowerPC , with Apple's commitment to license the Macintosh Operating System. We are determined to provide, in conjunction with Apple and IBM, an open architecture to support industry leading operating systems such as the Mac OS," said Ed Staiano, president, general Systems Sector, Motorola, Inc. "Apple's decision to license will result in a tremendous benefit to end users; opening up the combination of the superior performance of the PowerPC and the user-friendly environment of the Mac OS to a broader market."

"IBM and Apple are working on a common hardware platform, so all PowerPC operating systems can run on systems from IBM, Apple and other vendors," said James Cannavino, IBM sr. vice president of Strategy and Development. "We're also executing a common application development strategy based on SOM, OpenDoc and Taligent, so applications can be ported easily to both platforms. The bottom line is IBM and Apple are moving closer together on both hardware and software so customers will find PowerPC attractive."

Apple Computer, Inc., a recognized pioneer and innovator in the information industry, creates powerful solutions based on easy to use personal computers, servers, peripherals, software, online services, and personal digital assistants. Headquartered in Cupertino, California, Apple (NASDAQ:AAPL) develops, manufactures, licenses and markets products, technologies and services for the business, education, consumer, scientific & engineering and government markets in over 140 countries.

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Apple, the Apple logo and Macintosh are registered trademarks of, and Mac, OpenDoc, and Power Macintosh are trademarks of Apple Computer, Inc., registered in the US and other countries. Power PC is a trademark of International Business Machines, Inc. All other trademarks are trademarks of their respective companies and are respectfully acknowledged.