Be to Exit Hardware Business
By Charles Cooper
January 31, 1997 1:45 PM ET
Be Inc., which lost out in the bidding to help Apple Computer Inc. develop the
next version of the Macintosh operating system, is getting out of the hardware
business.
The Menlo Park, Calif., company said it was focusing on software development to
avoid what a company representative described as an "ethical dilemma."
"As we license hardware vendors to bundle the BeOS, we have a potential
conflict of interest," according to a letter sent to developers by Be official
Alex Osadzinski. "How do we optimize between our hardware sales and making the
BeOS available on other manufacturers' hardware? This conflict of interest
faces any company that sells an OS on its own hardware while licensing it to
other hardware manufacturers. We've chosen to avoid the conflict in the
simplest way possible."
But the company also grappled with the dilemma faced by many small companies
attempting to build a successful business around a new product line.
In his letter, Osadzinski said the company concluded that "products like this
take a lot of time and money to develop, and cost a lot to build, especially in
low volumes."
Be will honor warranties on systems bought by customers, but officials did not
say how long replacement parts would remain available.
Late last year, Be was involved in merger negotiations with Apple. But the
talks fell through when the companies failed to agree on a price. Be's founder,
Jean-Louis Gassee, was Apple's head of research and development until 1990.
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