Reprinted from Softalk 2/83, pp. 143.
Apple’s announcement of Lisa, a souped-up third-generation microcomputer, poses the question of whether
the Two Guys from Cupertino show can play in Fortune 1000 theaters.
Of course, it’s likely that neither Steve had anything to do with the conundrum Apple now finds itself
in. Steve the Wozniak was in school last year and apparently was not active in the Lisa project. Steve the
Jobs is rumored to be backing Lisa’s little brother, Mcintosh [sic], as Apple’s next big hit.
If Lisa got off the starting blocks without the active assistance of either of the founding teenagers of
Apple, more’s the pity. The company certainly didn’t choose an easy market to aim toward. So they
can use all the genius at their disposal.
Lisa is still in beta testing, so no firsthand knowledge of the quality and reliability of the system
is available. But conceptually Lisa is either a stroke of genius or a good example of high tech engineering
gone amuck. It all depends on whether it sells.
There’s no question but that Lisa is a first-class piece of work. The driving microprocessor is
powerful, the inclusion of two inboard, high-density, double-sided drives is far-seeing, provision
of sufficient applications software to do the jobs an executive would want to do at his desk
is a reflection of an Apple III lesson well learned, and the bundling of the Profile hard disk probably reflects the
not unrealistic expectation that anyone who buys a machine this potent will probably need plenty of storage.
The problem is that Lisa sells at $9,995. For those of you slow on the pickup, we’re discussing five
figure dollars here unless you live in a state with a sales tax of less than one-tenth of a mill per dollar.
This is not an item expected to be high on impulse buyers’ lists. After all, it can’t play Pac-Man.
The question is why does Apple fearlessly go where others fear to tread? Xerox pioneered the kind of
user interface featured on Lisa at $18,000 per machine, give or take a two-martini lunch, Buyers queued
up in numbers estimated to be at least double the population of working lumberjacks in the Gobi Desert.
IBM, one of those other techie companies, saw what Xerox had done and waxed wise. Not desiring to be
in the business of selling chain saws to those selfsame Gobi lumberjacks, they entered the market at
what appears to be the high end of the low end market. Translated into real English, that means IBM will
sell you a real usable machine for about $4,000.
Apple seems to have almost split the difference: They’re twice as high as IBM and half the price of
Xerox. It’s easy to believe that Xerox is too high. Neither Xerox nor IBM has ever shown any
indication to run after-Christmas white sales or Valentine’s Day two-for-one sales. Margin is
the founding principle in both conglomerates. So, if there’s a marketing window at ten grand, why
aren’t these guys there?
It’s patently obvious that Fortune 1000 executive and upper level management personnel are the
targets here. There are not many Winchell’s Donut franchisees in the market for ten gees of computing
power. You can almost visualize the advertising campaign: How much is the efficiency of your top
executives worth to you? Underneath the headline will be cuts of Lisa and PC with $9,995 under Lisa
and $4,000 under PC. Lisa will become the perk of the elite class. That’s all
of a two-thousand-unit marketplace.
One of the problems in assessing Lisa’s future lies in definitions. Everyone knows Apple makes personal
computers, so the press kits all announce Apple’s wonderful new personal computer. It’s understood
that the more you pay a massage parlor, the more personal they get. It’s not clear that the same law
holds for small computers.
Pundits are fragmenting the market into what they hope are functional definitions if they’re to maintain
their punditry to the end of the decade. Generally, they all agree that we’ve either got a home
computer, a personal computer, a desktop computer, or a work station. What they don’t agree on is
which computers go into which categories.
Stopping far short of any consensus is the feeling that home computers cost less than $500 and have less
than 48K of memory. Personal computers cost less than $2,000 and have 48K or 64K standard. Desktop computers
go for 64K to 256K and cost $2,000 to $4,000. Nobody knows what a work station is because we aren’t there yet.
These definitions, albeit probably all wet, certainly clear the air. Vic-20 and Atari 400 are home
computers. Apple II and Atari 800 are personal computers. IBM pc and Apple III are desktop computers. Does
this mean Lisa’s a work station?
If it does, the experts think Lisa’s too early. They say there’ll be nine million desktop computers
before any significant phasing into work stations commences. That’s four or five years away, even
if IBM starts selling a million units a year, which is what they’re shooting for.
Apple is a company worth worrying about. The number of businesses that have sprung up in support of
the Apple II makes Apple the biggest nouveau employer in America. They’ve been good for a lot
of people who have never crossed the city limits of Cupertino.
Apple seems to be riding a fantastic streak of good fortune, and Lisa is at least starting out that way.
After using Lisa as a code name for years, the company got attached to it. But the name was owned
jointly by Randy Hyde, author, and Sierra On-Line, publisher, of Lisa 2.5, an assembler of some renown.
Apple’s a big, rich company now. Hyde or Sierra could have perpetrated highway robbery under the ruse
of sincere negotiations. Instead, they negotiated a price representing their fair interest in the name.
That’s Apple’s fairy godmother at work again.
But it’s okay.
They deserve success.