Macintosh clone
A Macintosh clone is a personal computer made by a manufacturer (other than Apple Computer), using Apple Macintosh ROMs and system software.
The Apple II and IBM PC computer lines had been "cloned" by other manufacturers who had reverse engineered the minimal amount of firmware in the computers' ROM chips and subsequently legally produced computers that would run the same software. These clones were seen by Apple as a threat; Apple II sales had presumably suffered from the competition provided by Franklin Computer Corporation. (Subsequently, the threat proved to be real; today, Dell Computer, Gateway, and Hewlett-Packard all sell more IBM PC compatible computers than IBM does, causing IBM to recently sell its PC division to Lenovo Computers, a Chinese company.)
The Macintosh's system software strategy was created with an eye toward suppressing any Mac clones. The Macintosh system software was a very large amount of complex code that embodied the Mac's entire set of APIs, including the use of the GUI and file system, and a large amount of this system software was included in the Macintosh's ROM chips. Hence any competitor who attempted to create a Macintosh clone would have to either illegally duplicate all the copyrighted code in the ROMs -- in which case Apple could legally squash the manufacturer -- or reverse-engineer the ROMs, which would have been an enormous and costly process without certainty of success.
The strategy of suppressing clone development was successful; from 1986 to 1991, several manufacturers created Macintosh clones, obtaining their ROMs by actually purchasing one of Apple's Macintosh computers and removing from it the required parts, then installing those parts in the clone's case. This resulted in very expensive clones that were never popular, and Apple could safely say that its share of the Macintosh computer market was not in danger.
However, by 1995, Apple owned only about 7% of the worldwide market share of computers, and decided to launch a clone program, by which it would license the Macintosh ROMs and system software to other manufacturers who agreed to pay a royalty. The aim was to increase Apple's market share in the desktop computer market. From early 1995 to mid-1997, it was possible to buy PowerPC-based clone computers, running Mac OS, from Motorola, Radius, APS Technologies, Daystar, Power Computing, Umax, and other vendors. The styling of the Mac clones often more closely resembled that of a PC than of a Mac, but the clones frequently offered a lower price and sometimes better performance.
Soon after Steve Jobs' return to Apple, he attempted to re-negotiate the clone's license agreement to prevent Apple from losing money. When the clone makers refused, Jobs refused to license later versions of the Apple hardware and operating systems to the clone vendors, effectively ending the clone program. He stated that the clone program was ill-conceived and had been a result of "institutional guilt", meaning that there had been a widely held belief at Apple that had the company aggressively pursued a legal cloning program early in the history of the Macintosh, consumers might have turned to low-priced Macintosh clones rather than low-priced IBM PC compatible computers, and Apple might have ended up in the position currently occupied by Microsoft — an extremely powerful company with high profit margins due to its wide base of consumers perpetually dependent on its system software products. By now, Jobs stated, it was too late for this to happen; the clone program was doomed to failure from the start; and since Apple mostly made money by selling computer hardware, for the most part, it ought not engage in a licensing program to reduce its hardware sales.