A Clone of Their Own: Psystar's Pedraza Brothers

The 24- and 22-year-old computer whiz kids are undercutting Apple (Nasdaq: AAPL) by building "clone" computers with Mac software and selling them for less money than the tech behemoth. The daring move (cloned PCs are old news, but Apple has been vigilant against Mac imitations) has sent shock waves through the techie world. With little business experience and nothing to lose, the two South Florida brothers are relishing their revolutionary moment.

"It's like our Boston Tea Party of computing," Rudy Pedraza said, looking a little like Matt Damon as he walks around his company's office/assembly line. "We are challenging the establishment to make the market better for everyone else."

The Pedrazas -- single, homegrown guys who like to play shoot-'em-up computer games like "Quake 4" -- are confident to the point of cockiness about their clones.

"It's never crashed on me, and that's not something I can say about any Mac or PC I've ever used," said Robert, the younger of the two who sports a face full of scruff and slicked-back hair.

He and his brother grew up tinkering with computers. Their parents run a computer and IT business and helped with the money the brothers needed for their startup, said family friend and lawyer Jose Quinon.

Going Retail?

Rudy, who also dresses the part of tech entrepreneur in jeans and a graphic T-shirt or three-buttons-open collared shirt, takes the lead on business decisions and media interviews. He's already talking about selling their clones in retail chains and investing in a bigger headquarters.

However, he's unwilling to pull back too much of the curtain yet, declining to talk about sales figures or legal implications. There's even a sign on the company's front door informing visitors they're not welcome to come in.

"We figure, it's better to leave some element of surprise, of suspense," Rudy said.

For about US$550 -- about the same price as a bare-bones Mac Mini -- the Pedrazas will build a faster, more powerful computer that runs on Apple's latest operating system, called "Leopard."

'It's Gonna Happen!'

Techies say it's a no-brainer for people looking for a cheap, custom-built machine but worrisome for those who want brand-name dependability and support.

"I just can't wait for an owner to call Apple tech support looking for help with their Psystar unit -- c'mon, you know it's gonna happen!" technology correspondent Adrian Kingsley-Hughes wrote this week on his ZDNet blog, Hardware 2.0.

Kingsley-Hughes has been following the Psystar commotion and the user reviews that have been coming online in the past few days.

He and other bloggers have questioned the legitimacy of Psystar based on a number of hiccups the company had last month.

First, the Pedrazas changed office locations for more space, and then they had to halt production and shipments when their credit-card processors locked them out. People accused the company of scamming to steal credit information. Not true, Rudy Pedraza said.

"We never expected to get so many orders so fast, and when we did, we had to ask the credit processors to handle the extra volume," he explained.

That problem is now solved, and Psystar is working to build and ship a backlog of computer orders.

Apple Remains Quiet

There are legal concerns, too.

Apple has a licensing agreement that prohibits using its software on non-Apple computers.

For years, Apple had allowed clones of its computers, but CEO Steve Jobs shut that down when he took control of the company in 1997.

Despite the flurry of attention Psystar has received -- some bloggers posted Google (Nasdaq: GOOG) satellite images and exterior photos of the Pedrazas' warehouse to prove it existed -- Apple has remained quiet. Company reps have not commented publicly, and calls and e-mails to Apple's media office for this article were not returned.

Experts predict it's only a matter of time -- days, really -- before Apple bites back.

"These guys are opening themselves up for a world of hurt," said Randy Friedberg, an intellectual property and technology attorney for Olshan Law in New York. "Apple is one of those companies, like Disney (NYSE: DIS) and Coca-Cola (NYSE: KO) , that doesn't screw around when it comes to protecting their IP (intellectual property). This will be a classic David versus Goliath battle, and I don't know how the little guys would come out on top."

Is it a brilliant business idea from tech geniuses or a novice misstep from an inexperienced start-up?

Making History?

Kevin Levy, chair of the technology law practice at Gunster Yoakley in Miami, said not to count out the Brothers Pedraza just because they're young and their business is new.

"Sometimes young people might not have an appreciation of the legal matters and the business models, but they get the technology in a way others do not," Levy said.

Then, referring to computer icons Bill Gates and Paul Allen, Levy said: "If I recall, there were a couple of gentlemen no more than 22 years old who left Harvard and started a little company called Microsoft."