Apple licensing FireWire for a fee
By Jim Davis
Staff Writer, CNET News.com
January 15, 1999, 4:00 a.m. PT
Apple Computer may have found a way to profit from the convergence of PC and consumer electronics technologies: Charge royalties for the means of connecting them together.
But the scheme doesn't seem to be popular with manufacturers looking to take advantage of high-speed, “plug and play” data transfer, and could slow the technology's adoption.
As prospects brighten for Apple's FireWire, formally known as IEEE 1394, the Cupertino, California, company has begun asking new licensees for around $1 "per port," according to Dick Davies, spokesperson for a trade association devoted to promoting FireWire.
That means that a FireWire-enabled hard drive, for instance, could cost $2 more if there are two connectors on the drive. Many who see the technology as a bridge to the world of seamlessly merged computer and consumer electronics devices worry the move will further delay what has already been a slow rollout.
"IEEE 1394 is a technology that needs to proliferate to take advantage of itself, and a royalty isn't the way to do that," said Mark Bridgewater, vice president of marketing for Digital Harmony, an opinion shared by others involved with the technology who talked to CNET News.com.
FireWire, invented by Apple, is a networking standard recognized by the Institute of Electrical and Electronics Engineers (IEEE) in 1995. Though currently little-used, it promises users the ability to easily connect electronics devices such as digital TVs, cameras, cable set-top boxes, and stereo equipment to each other and to PCs.
Both Microsoft and Intel are trying to move the industry to use FireWire as a universal interface for such peripherals such as storage drives, CD-ROM drives, and DVD drives. That's because FireWire can transfer data at rates of up to 400 mbps (million bits per second), many times faster than the 12-mbps rate of Universal Serial Bus (USB) connectors, now commonly found on newer PCs.
More important, Firewire makes it easy to hook up devices like digital camcorders, thus encouraging new uses for the PC--and new reasons to buy more systems.
Beginning last year at the Comdex trade show in Las Vegas, observers say, Apple started asking for more money for 1394 technology licensing. The plan has made a number of executives in both the consumer electronics and PC industry privately nervous.
"I can't imagine they'd prohibit the proliferation of 1394," said Bridgewater, whose independent company is hoping to become a Dolby Labs of sorts that would license out its own technology for enhancing 1394 devices, test manufacturer's devices for interoperability, and license its logo to companies which pass muster.
The stakes are higher for electronics manufacturers, facing razor-thin margins but not wanting to miss out on the industry's evolution.
To date, few PC makers have incorporated FireWire-ready ports into new PCs, while Microsoft only began supporting it with Windows 98, but that trend is starting to change. Compaq and Sony recently introduced consumer computers with 1394 connectors, while Silicon Graphics' first Windows-based workstations are shipping the technology.
Apple itself just shipped its first computers with the technology built-in, and at a recent Macintosh trade show, manufacturers were showing a slew of FireWire devices.
Current licensees of the technology such as Sony, Philips, IBM, and Texas Instruments--all of which make their own chips for 1394 devices--aren't expecting to see any changes in their agreements, most of which involved a one-time, flat fee.
On the consumer side, Matsushita, the world's largest consumer electronics company, just recently licensed FireWire from Apple.
Marty Gordon, a spokesperson for Philips Electronics, noted that the world's third largest consumer electronics company "view[s] connectivity as one of key platforms of future, and 1394 is a huge part of that. That hasn't changed."
If original licensees and consumer electronics companies don't seem to be affected by the plan, who is?
Some think Apple may be trying to use its position as patent holder to gain a competitive edge in its core market of desktop and graphics publishing.
The companies that stand to be most affected are start-ups interested in PC peripherals, Davies said. These smaller businesses are most likely to make FireWire commonplace in the new world of convergence.
And the companies most affected by that issue are big-league PC companies such as Compaq, Intel, and Microsoft.
"The thinking is that this will temporarily confuse the [Windows-Intel] companies, so then they give the convergence market to Apple by default," said one source, who declined to give his name because he is closely involved with the ongoing development of 1394 technology. "Or it could just be a side effect of what Apple is doing," he conceded.
Few industry experts think Apple's decision will inhibit the growth of the market for FireWire-enabled devices, but the changed licensing policy will take its toll. "The view in the [computer] industry is that [the new fee] is a challenge but is not stopping design, because there is ample supply of silicon," Davies said.
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