This feature was written for Micro Decision magazine in 1990. I was lusted after a Mac but it would be a few more years before I could afford one. Back in those days, PC manufacturers used to give computers to journalists on ‘long-term loans’ quite readily, but Apple was rarely so forthcoming.
IBM PS/1 & Apple Mac Classic
It’s unusual, perhaps even a little unnerving, to watch two of the biggest computer companies in the world, companies that pride themselves on their high-value corporate images, diving for the low-end of the personal computer market. Yet the attempts of Apple and IBM to woo the impecunious or budget-conscious – the home, educational and small business user – into their folds couldn’t be more different.
With the Macintosh Classic, Apple finally listened to the anguished calls from existing and potential users to provide them with a machine that was cheap enough to be bought for home use or in bulk. For IBM, the PS/1 is an attempt to fight off an increasingly ravenous and successful competition, to get its little blue badge into a market where badging is rampant: it is, in short, going up against the clones.
There is one similarity, however: both companies are heading back into territory on which they once held a tenuous grip, but which they relinquished in their drive into the corporate world. IBM always was going to have a tougher time. While Apple is, for all intents and purposes, the sole supplier of Macintosh-architecture machines, IBM is faced with hordes of look-alike micros selling at very low prices into what has always been a price-sensitive market.
In a way, Apple isn’t so much returning to the arena as finally turning up for the first time. When the original Macintosh was conceived, it was designed down to a price, as a ‘people’s’ machine. Its progenitors gave Apple a computer that could be made for $500: Apple then proceeded to sell it for nearly $2,500. That meant good profits for Apple on each machine, but alienated a large number of potential buyers.
Since then, and particularly under the leadership of John Sculley, Apple has pushed ever harder into the corporate world with larger, better and more expensive models. Those small business and home users who could afford it, did: but for the most part, Apple’s strategy left in its wake a lot of frustrated, aspiring Mac owners, allured by the machine’s attractions but with pockets of insufficient depth.
At the same time, Apple watched its share of the personal computer market decline. Something had to be done to win that share back, and that something is the Mac Classic. And all the indications are that Apple has got it exactly right.
The machine is pretty much the Macintosh Plus revisited. It has the same box – the original sit-up-and-beg design with integrated screen – and uses the same processor. The main improvement is the price.
‘It’s released a lot of pent-up demand for the Macintosh,’ says Rob Wirszycz, marketing manager at Callhaven, one of the country’s biggest Mac dealerships. He reckons that there’s an even split between people getting into the Macintosh for the first time, switching from other architectures, and those expanding their current Mac installations.
‘You’ve got people who use them at work, or use other systems at work but want something different at home,’ he says, ‘and you’ve got companies saying “Now I can afford to spread the use of Macintosh around the company”. And you’ve got people who are looking at computers for the first time, though I think those are in the minority. I think they are people who have had a desire for a Macintosh, now they can finally afford one.’
The amount of corporate buying has been relatively low, according to Wirszycz. Most of the larger companies are more interested in the LC, a modular system with a colour display and more expandability. No doubt this is due, in part, to a rather unfortunate shortage of Classics. Apple says the demand took it by surprise: others, including dealers, reckon the company fouled up. When they can’t get Classics, many buyers are digger a little deeper and paying the extra £200-300 for an LC, a machine Wirszycz described as a ‘PS/1-buster’.
All the same, Callhaven is selling the Classics as fast as it can get them. The same goes for Computer Warehouse, whose sales director, Steve Rubra, says: ‘I would say it’s been a resounding success. We’re selling everything we can get from Apple. In the short time it’s been out, I suppose we must have sold upwards of 50 units or more, though supplies have been very limited. Deliveries have now eased up and we’re selling a lot more. We’re getting them in batches of 25 at a time.’
This point is driven home by Ian Philpott, purchasing manager at the Sema Group, a recent customer for the Classic. Sema is a systems development company, specialising in systems for scientific environments for people like the Ministry of Defence, developing software and hardware.
‘We wanted to buy more Classics than we’ve actually bought,’ he says. ‘Because of the lack of availability, we’ve actually ended up buying the LCs. We’ve bought around 30 Classics: we were going to buy probably 50. The LCs are probably slightly over-specified, though the users are happy if they’ve got the higher specification machines.’ The Classics are being used across the board, for just about every kind of application, and all the machines are being used on networks.
‘Cost was one of the factors in going for the Classic,’ says Philpott. ‘We’ve got a corporate policy that, where possible, we try to buy Apple or Dell PCs. The price of the Classic has allowed us to buy more of the machines.’
A significant factor in all this is that what you get for your money is a real Macintosh – there’s no hint of this being a cut-down machine. ‘What Apple has not done is to cripple the machines,’ says Wirszycz. ‘It uses almost all the Macintosh software that is available – you’ve got 7000 business applications that can run on those machines.’
All that gives the machine obvious appeal to small business, educational and home users, the machine’s intended target and the areas where it’s selling best. Callhaven set up a new division, Callhaven Direct, to handle this kind of low-volume business, because the demand is so good. And there’s other kind of support, too. Claris has produced a £195 software bundle incorporating MacWrite, MacDraw and FileMaker, a package that Wirszycz reckons ‘blows MicroSoft Works out of the water’.
But what about corporates? Other than employee purchase schemes – using their buying power to get machines at low prices for people to use at home – can they make use of the Classic?
The fate that awaits most low-cost machines is to be hung on a network as a glorified terminal. Rubra was a little sceptical about the Classic’s abilities in this role, pointing out that on a typical Macintosh network the station handles all the actual processing locally. That explains the popularity of the LC, a machine that is surprisingly fast for its price. He has been seeing some use for networks, but mostly with the machines doing less demanding tasks: ‘word processing for secretaries and that kind of thing,’ he says.
Wirszycz, on the other hand, sees a role for the Classic as a network station machine. ‘Certainly there has been a significant amount of activity with the Classic for text-entry workstations,’ he said, pointing to the Mac’s willingness to be networked as a major selling point for this kind of application. ‘For example, magazines are putting them in for the journalists. Before the Classic came out, people were buying the high-end Macs for the designer or production department, and they were buying Amstrads or Dells or whatever for the journalists. Now the journalists are having Macs and they really like them, they like the software.’
The model that has been selling is the 2/40. The System 7 operating system software, due out in May, needs at least 2Mb of memory, and a hard disk is pretty much de rigueur these days. Dealers have also found buyers specifying the maximum 4Mb of memory when purchasing, although neither Rubra nor Wirszycz has seen much upgrading going on. ‘Most people can leave the configuration as it is, which is probably why it’s such a popular unit,’ says Rubra.
The story is very different over in the IBM camp. Whereas Apple’s dealer network accepted the Classic with open arms, IBM’s main resellers – those servicing the corporate market – have largely greeted the PS/1 with profound indifference. True, the PS/1 isn’t aimed at the corporate sector, but then neither is the Classic. The crucial difference is that the PS/1 is very much a cut-down machine – or ‘brain damaged’ as one dealer put it.
In a sense that’s a little unfair: it refers mainly to the machine’s lack of expansion ability. If you want to add something like a network card you need to buy an optional three-slot expansion kit, adding to the hassle and cost. There’s also the fact that the only hard disk IBM sells for the machine is a 30Mb model, which looks a bit puny these days.
It’s not all bad news. Coming from IBM, the machine is naturally well-built. ‘The general marketing opinion is that, it got slated in the reviews when it appeared and some people are saying that it’s not actually as bad as some of the reviews suggested,’ says Simon Haigh, marketing director at Debug, an IBM systems centre. ‘For example, the screen is excellent. The corporates who’ve been in, looking at other things, and just happened to see it have been impressed by the machine, but they position it as we do, as something that is really a home computer.’
This isn’t IBM’s first attempt. The original PC was seen very much as a home computer, and in 1983 IBM launched the PC Junior, which flopped badly.
There’s an interesting difference in perception between PS/1 marketing in the US and the UK. The US slogan is ‘IBM brings it all home’ and the machine is being heavily promoted through department stores like Sears. It is often being sold with a modem and Prodigy account – Prodigy being similar to the UK’s Prestel, an online system offering things like teleshopping and home banking. In the UK, the slogan is ‘Five minutes and you’re in business’.
The one thing that really militates against the PS/1’s acceptance by corporates is its processor. It’s not just that the 286 doesn’t deliver the necessary performance (as a network station it would be perfectly adequate), it’s that more and more corporates are adopting a 386-only strategy, and their entry level machines are based around the 386sx chip.
‘A while ago we would have said the minimum corporate machine was the Model 30. But now – it’s quite indicative of the trends people are following – it seems to be the Model 55SX-X61, which is a pretty powerful box,’ says Steve Booker at corporate dealership P&P.
Phil Keenan, marketing manager of Planning Consultancy, feels that corporates not only want and need machines more capable than the PS/1, but can now easily afford them. ‘If you looked at hardware, even a year ago, and said to someone that you need 4Mb of RAM and an 80Mb hard disk, they would have looked at you wide-eyed and said “we can’t afford that sort of hardware”. But it’s now very affordable,’ he says.
To sell the machine, IBM had to create a largely new dealer network, taking on smaller resellers who, if they were selling IBM kit already, were concentrating on the Model 30 and perhaps the Model 55SX. Over 500 dealers were recruited.
ATT is a typical PS/1 dealer. It is selling around 10 machines a month, mostly for home use but with about 10-15% going into medium size businesses (10-100 employees). The senior salesman, Sam Kay, reckons that makes the machine a good seller, ‘though not as much quantity as one would have imagined from the campaign that IBM launched prior to the launch,’ he says. For the most part, says Kay, the end users are running Microsoft Works, which comes bundled with the machine, and perhaps some games. ‘The people who buy it want it as a limited-use machine with an IBM badge on it.’
There is a problem for IBM down in that end of the market, however. Big Blue has never tried to compete on purchase price. What corporate customers look at is price of ownership, which involves all the extras of support, maintenance and reliability. That isn’t so true of the low-end market, however, and while the PS/1 sells for a reasonable price of around £1,000, depending on configuration, that still isn’t the cheapest deal you’re going to get.
The PS/1 faces a lot of stiff competition. It’s not hard to find better specified machines (particularly in the area of expansion slots) at lower prices. The PS/1’s attraction has to be that it is trading on its maker’s reputation. There is a certain aspirational element in buying an IBM machine for home or small business use. ‘IBM are really trying to mop up Amstrad dealers who would try to sell a machine to the sort of business we aren’t geared up for – the corner shop, the bakery, the butcher, whoever – to run their cash book, and so on, on it,’ says Haigh.
The complete package approach – so unusual for IBM – has been taken a step further with a special deal for National Health Service suppliers. The NHS5 package gives them the computer, a printer, modem, software (Works and a special EDI package) and use of IBM’s Information Network for a year. An electronic trading system, it’s designed to aid order processing. It sells for under £4,000.
It’s difficult to know how well the PS/1 is selling – it depends who you ask. But this kind of package approach may just give it a chance where the PCjr had none. Meanwhile, there’s little doubt about the success of the Mac Classic. It will be interesting to see what the re-emergence of IBM and Apple down in the low-end market will do for their diminishing slices of the personal computer business.
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MAIN FEATURES – MACINTOSH CLASSIC
The Mac Classic uses the Motorola 68000 processor running at 7.83MHz. The basic model comes with 1Mb of RAM and a 1.44Mb floppy disk drive. The Classic 2/40 has 2Mb of RAM and a 40Mb hard disk in addition to the floppy drive. The memory is expandable to 4Mb. The floppy disk drive is Apple’s SuperDrive unit, capable of reading and writing MS-Dos files.
The Classic is equipped with a SCSI interface, allowing external devices, such as additional hard disks, tape drives, CD-Rom drives, scanners and laser printers, to be attached to the machine. There is also full support for the AppleTalk networking system, with LocalTalk serial port connectors.
The display is a built-in, 9-inch monochrome screen with a bit-mapped resolution of 512 x 342 pixels. The machine also provides a sound port, using a four-voice generator, capable of driving an external amplifier or headphones.
Apple’s recommended prices are: Classic 1/F1 – £575.00. Classic 2/40 – £895.00.
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MAIN FEATURES – IBM PS/1
The PS/1 is based on a 10MHz 80286 processor. The basic model comes with a single 3.5in 1.44Mb floppy disk drive and 512K of RAM. The second, and more realistic model has 1Mb of RAM and adds a 30Mb hard disk. Both models have VGA graphics driving mono or colour monitors, one serial and one parallel interface, a mouse port with a two-button mouse.
The machine is bundled with MS-Dos 4.01 and Microsoft Works, an integrated applications package incorporating a word processor, spreadsheet, database and communications program. A second 3.5in disk drive, or external 5.25in drive can be added. There are no expansion slots as such, but an optional Adapter Card Unit gives the machine three slots.
IBM doesn’t give out recommended prices, but typical dealer prices for the hard disk, 1Mb model are £900 for a mono system and £1050 for a colour version.