Apple Computer Inc. president John Sculley unleashed his latest weapon last week in the war between Apple and International Business Machines (IBM). Apple had invited nearly 2,000 people to the Moscone convention centre in San Francisco to meet the Apple IIc, a sleek, white, portable home computer designed to rival IBM’s PCjr both in price and in capabilities. Declaring that the unveiling of the new home computer marks Apple’s evolution into a consumer products company, Sculley added: “This is not just a product game; it is a marketing game. Nobody will be able to start a computer company in a garage now.”
Apple introduced the lie to take advantage of the industry-wide trend toward smaller computers which offer customers portability combined with extensive memories. The lie has a memory capacity of 128K, meaning that it can handle 128,000 bits of information. At 7V2 lb., the lie is Apple’s smallest microcomputer and is priced at $1,295 in the United States and $1,895 in Canada. By comparison, the PCjr remembers the same amount, weighs nine pounds and costs $1,918 in Canada. One advantage of the lie is that it is able to use about 90 per cent of the more than 10,000 software programs already available for its predecessor, the Apple He. Said Ed Gould, an Apple Canada marketing representative in Toronto: “You can use it at work, then pick it up and take it home for the kids or to a business meeting with you in Houston.”
Still, industry analysts point out that the lie does not represent a technological advance for the personal computer industry. It is essentially a smaller version of Apple II product line: the contents of the original Apple II model, introduced in 1977, have been compressed into a smaller case. According to Robert Payne, a consultant with Toronto-based Evans Research Corp., the lie “is a tool to extend the life cycle of the seven-year-old Apple II line.” At the same time, while Apple calls the new model portable, a monitor and printer come separately and are not so easily transportable.
Not only that, but the lie is likely to
meet stiff competition from a host of other portable computer products besides IBM’s PCjr. They include such U.S.built rivals as the Compaq, as well as the Hyperion, which is made by BytecComterm Inc. of Montreal. More important, Apple will have to convince consumers that the new product is preferable to other less expensive home computers, such as the Commodore Vic 20 which retails for $220. Sculley admitted that Apple will have to “build a marketplace” for its new computer. The goal, he said, will be to convince consumers that the lie “is for the serious user in the home.”
David Fraser, executive vice-president of corporate development with Canada-wide Computer Innovations Corp., is enthusiastic about stocking the lies in his company’s 36 outlets when they become available in Canada in
early May. He said that buyers have become disillusioned with the capabilities of some less expensive home computers. Said Fraser: “They [consumers] realized that those computers could not do what they wanted them to. They were predominantly games-oriented.” Fraser’s company sells both Apple and IBM products, and he said that sales of the PCjr have been disappointing. Said Fraser: “We are not selling as many PCjrs as I expected.”
Indeed, the IBM PCjr has proved to be a controversial entrant into the home computer market. IBM introduced the model with widespread publicity last fall but could not supply its dealers until the following February. By then, marketplace enthusiasm had cooled substantially. Critics also complained about the small computer’s keyboard, with its flat, rubber keys that look like Chiclets gum. Indeed, Fraser’s disappointment is shared by other IBM dealers. Patricia Vaughan, a coowner of a Computerland outlet in Ithaca, N.Y., declared, “The response was underwhelming.” Still, IBM spokesperson Janet Vereshack said that sales of the PCjr “have been meeting IBM’s expectations, and we expect the demand to increase throughout 1984.” And no one would dispute that IBM has the largest segment of the overall personal computer market, largely because of the success of the PCjr’s larger predecessor, the PC, a personal computer designed mainly for business use. IBM now holds nearly 30 per cent of the world personal computer market, compared to Apple’s 23 per cent.
Apple says that it intends to spend $20 million (U.S.) on advertising the lie and hopes to sell 400,000 units by the end of the year. But Payne of Evans Research Corp. is more skeptical of its marketability, arguing that its price tag is “a hefty outlay” for consumers. What is more, IBM is convinced that the PCjr, He’s major rival, will prove to be a winner. The PCjr is an “attractive package,” said Vereshack, pointing out that it is not only compatible with other IBM personal computers but with a wide range of hardware and software offered by other companies as well. Apple, it seems, will have to use all the marketing muscle at its command to carve out a lucrative share of the home computer market. —BARBARA RlGHTON
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