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Company Announces First IBM Personal System-2 Clone

April 19, 1988

AUSTIN, Texas (AP) _ Dell Computer Corp. has become the first company to announce it has developed personal computers based on International Business Machines Corp.’s patented Personal System-2 design.

The Dell System 400 and System 500 are expected to be available for sale in the final three months of 1988 and should cost about 30 percent less than comparable IBM models, Michael Dell, the company’s 23-year-old founder and chief executive, announced Monday.

Dell said it expects to complete a patent licensing agreement with IBM ″in the very near future.″

IBM spokesman John Mihalec said the company could not confirm talks with particular companies, but reaffirmed that the company is willing to provide licenses on its patents under reasonable terms and conditions.

However, Mihalec said a patent license does not protect a company if it happens to infringe on features of the Personal System-2 and its Micro Channel Architecture that are protected in other ways, such as by copyrights.

IBM’s Micro Channel Architecture has been touted by IBM as a way to improve the performance of personal computers when they are linked together in networks. It also allows the machine to perform more than one major task at a time.

But industry analysts say the new Personal System-2 computers still lack the software and additional features to take full advantage of the new design. They say machines with conventional designs offer higher performance for less cost.

Dell reported sales of $159 million and earnings of $9.4 million for its last fiscal year ended Jan. 31. It has grown to the country’s seventh largest maker of personal computers since being founded in 1984 with a $1,000 investment.

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