The starting gun sounded last April when IBM unveiled its new generation of personal computers, the Personal System/2.
Who would be the first to decode the tough-to-replicate proprietary components IBM had loaded into its machines? Who would pocket the spoils certain to come to at least some of those who successfully clone IBM's new equipment?
One of the answers came two weeks ago when Western Digital, a fast-growing Irvine chip maker, announced that it plans by early 1988 to begin shipping a $99, four-piece set of semiconductors that duplicates the operations of IBM's so-called Micro Channel, a new communications link offered by the PS/2.
Experts consider re-creating the communications link the key breakthrough in the attempt to clone the IBM system, and they say the way is now clear for the first PS/2 clones to be on the market as early as mid-1988.
Although the news sent ripples through the computer industry, and Western Digital officials proudly accepted congratulations for crossing the finish line first, outside analysts are wondering exactly what Western Digital has won for all its effort, particularly because IBM has promised to aggressively protect its PS/2 patents and other intellectual property.
"As far as I'm concerned a legal battle with IBM awaits the first attempt to re-create the PS/2," said Patty Woo, an analyst with the Gartner Group, a Stamford, Conn., market research and securities firm. "Western Digital is really taking a risk by introducing it first."
William Lempesis, an analyst with Dataquest, a San Jose market research company, agreed, saying: "The potential is certainly there to make a lot of money, but they will have to have a good legal staff."
Western Digital Chairman Roger W. Johnson bristles at any mention of attorneys, lawsuits and the like. "We don't think there is any foundation for legal challenges," he said. "We have not copied anything. We have invented our own unique product that does what the Micro Channel does."
For its part, IBM isn't talking about the new Western Digital products.
However, earlier this year, the company launched an aggressive campaign to protect the PS/2 line from would-be clone makers. In addition to stern warnings that it intends to protect its patents, IBM also filed suit against two makers of accessories for the PS/2 because they used the PS/2 name too prominently in their product advertising.
IBM's approach with the PS/2 is in sharp contrast with the way it dealt with companies that cloned its original personal computer.
Introduced in 1981, the first PC was assembled largely with commonly available parts and readily available technology. The company didn't push hard for patent protection. As a result, the PC was widely copied, to the point where analysts estimate that IBM will account for just one-third of the $22 billion in worldwide sales this year of IBM PCs and compatible machines.
Working on New Chips
For the PS/2, IBM deliberately developed technology that would be difficult to duplicate. The Micro Channel, which governs the interaction between the computer's brains and its accessories, had been considered the most difficult system to crack. But there are others. To clone an entire PS/2 system, a manufacturer would need a video chip to handle graphics and a controller to handle data flowing in and out of the computer's central processing unit.
Chip makers including Zymos, Chips & Technologies and LSI Logic along with Western Digital, are already hard at work on the tasks, and the necessary chips are expected to be available early next year.
Dataquest's Lempesis estimates that IBM will sell about $2.5 billion in PS/2 systems this year. Eventually, he predicts, annual sales of the PS/2 and its compatibles could exceed $22 billion, the estimated value of all personal computers to be sold worldwide this year.
Gartner's Woo estimates that sales of PS/2-style machines will represent about 50% of the personal computer market by the early 1990s. But she said she expects "no big demand" for the machines before then.
Analysts said sales of PS/2 machines have been slowed largely because the advanced operating system designed for them will not be available until next year and because software isn't widely available to exploit their full potential.
So, did Western Digital really win anything by being the first to announce a chip set for would-be clone makers?
"There's always an advantage to being first," Lempesis said. "You get a jump on the competition. You get visibility."
You can also surprise your competition.
Even though it was widely known in the industry that Western Digital and its Silicon Valley competitors were working on Micro Channel technology, Western Digital's announcement Oct. 5 caught many off guard.