SAN JOSE, CALIF. -- Imitation is the sincerest form of flattery. But is it profitable?

That's the question facing a handful of small Silicon Valley computer and peripherals companies introducing plug-in products called fax boards that can turn a personal computer into a facsimile machine.

Facsimile, or "fax," machines are one of the hottest office products around. Able to transmit words and images over conventional telephone lines, they're popular with lawyers, bankers and other people who must send and receive documents in a rush.

Last year, shipments of fax machines jumped to 365,000 units, more than 90 percent ahead of 1986 shipments, according to Cap International Inc., a market research firm in Marshfield, Mass.

Growth in the business should continue unabated into the next decade because of advances in fax technology and competition, which lowers prices. By 1991, more than 700,000 fax machines worth almost $1.5 billion will be sold or rented annually, according to Cap International.

With numbers like those, it's no wonder that manufacturers of computers and computer peripherals are trying to get on the bandwagon. Cap International predicts that fax boards, costing roughly $1,000 to $2,000, are the best ticket. The company estimates that more than 227,000 units will be shipped by 1991; fewer than 12,000 were shipped last year.

The advantage of fax boards over fax machines is debatable, however. Fax boards can be very flexible, allowing a sender to manipulate information before sending it to several clients at once. However, some fax machines take only 12 seconds to send a page, whereas some fax boards can take up to 45 seconds.

"The best thing about {fax boards} is the fact that they create a document on the {personal computer}, read it right from memory, and transmit it," said Jim Carney at System Business Machines Inc. of Santa Clara, Calif., a distributor of Sharp Corp. fax machines. "But I have no customers begging for these things."

That hasn't stopped Apple Computer Inc. of Cupertino, Calif., from getting into the fax board act. In April, the company will begin shipping its $699 Apple Fax modem, a device that sits next to a Macintosh computer. Abaton Technology Corp. of Pleasanton, Calif., a supplier of optical scanners and other products for the Macintosh, will also begin selling a fax modem for $895 in April.

Unlike the fax machine business, which is dominated by the Japanese, the market for fax boards is still mostly the province of American companies. They include Datacopy Corp. of Mountain View, Calif.; Gammalink Corp. of Palo Alto, Calif.; Dest Corp. of Milpitas, Calif., and Complete PC of San Jose.

All say that the fax board market will grow. "Fax boards are bought by people who already know what fax is," said Mike Rehmus, Datacopy's director of product marketing.

And the customers who know what fax machines can do might be enticed by some of the advantages of fax boards.

Actually nothing more than computer modems, fax boards act like central fax dialers. Datacopy's Microfax board, which sells for $1,195 and plugs into most computers that are compatible with those made by International Business Machines Corp. of Armonk, N.Y., can be programmed to send a document to as many as 160 fax machines. In contrast, most fax machines are only as quick as their users, who usually have to feed in a document each time a new line is called.

Fax boards also can solve a nagging fax machine problem: the busy signal. They can be programmed to dial other fax machines again and again until they connect.

Some fax machines with additional computing power can do the same things, but they cost more. Carney said that Sharp's 3200 fax machine can be programmed to dial up to 110 fax numbers. But it costs $2,900 to $3,700.

There are drawbacks to fax boards, however. If the image you need to transmit comes from a piece of paper, you'll probably need to buy a scanning device that will put letters and documents into the digital form computers can understand.

And a fax board is inflexible in another way: It can be plugged into only one personal computer at a time, whereas a fax machine can be used by many people in an organization. For that reason, some analysts think companies will be hard-pressed to justify a fax board when many fax machines cost about the same.

"It's a different market with its own nuances," said Scott McCready, an analyst with Cap International.

But manufacturers say such objections will vanish once people become accustomed to using fax boards. For example, if the documents to be transmitted are stored in computer memory, a scanner is unnecessary. Datacopy officials say it will cost only $2,200, including the Microfax board, software and scanning equipment, to turn a computer into a part-time fax machine.

The market for fax boards includes electronic publishers -- people who use a personal computer, a laser printer and specialized software to publish their own newsletters.

In some desk-top publishing systems, graphic images must be copied from paper by a scanner, then processed by software in the desk-top computer before being printed in the finished newsletter. But a fax board can help enhance the image before being processed by the computer's software, resulting in better reproduction.

Although the Silicon Valley firms and a New York company, Cypress Research Corp., appear to have a head start in the business, most of them are small firms and are not making much money yet.