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back to article How Apple beat IBM in Steve Jobs' first retail war

The Golden Age of Computer Sales surely must have been Christmas 1984. The Macintosh had just been released, Compaq and IBM offered powerful new CPUs, but the real action was a massive Christmas sales battle between the Apple//c and the IBM PCjr. I remember it well, I was working at ComputerLand in Los Angeles, and I was at the …

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Brilliant

Loved that article great read.

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Unhappy

Yes.

It's a shame Commodore had the exact polar opposite philosophy towards marketing.

Oh well, too late now :(

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Great stuff

An enjoyable read and great to see that old sales letter. i hope that the calculator for 10 sales was a scientific one - I can't imagine that being a great incentive otherwise.

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"The Apple Report"

Alas, it was an inexpensive "credit card calculator" that fit in your wallet. But It was a nice gadget if you were a salesman like me that lived with a calculator in hand.

I published a few pages my sales newsletter, but some pages are incomplete first drafts. That's all I could find in my old paper records.

http://imgur.com/a/0P6mS

You can tell this document was written by an overworked, snarky salesman. I remember I used to get up in the morning, drink some coffee, drive to the store, then it was so busy all day that I wouldn't have time for lunch. Then I would get home late in the evening, too tired to make dinner, and I'd just flop into bed. A few days before christmas, I suddenly realized I had not eaten a meal for 6 days!

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"Apple produced glossy 4-color packaging for the //c, which had all the sales information written right on the box"

Aha! So every time I ask a salesgrunt a question and they answer it by reading off the box I know who to blame! (Answer: myself, for not reading the box in the first place and thinking that I'd get an intelligent answer from the floor staff).

Am I the only person who saw 'spiffs' and thought, 'Wow, I knew Apple was laid back in those days, but I didn't think that extended to handing out d... Oh, right, it's an acronym....'?

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Pint

HOLY SHET

To the Author,

You sir have a well earned place in computing history. I;'m wondering if Mr. Jobs himself had not contacted you recently and if you may have had a word or two on the switch to intel architecture, and other changes that have resulted in success of many Apple products such as the Mac Pro, Macbooks, iPhone, and iPad??

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merkin market!

If your store was shifting lots of apples, I expect your demographic was an affluent one. Those things were expensive!

That was around the time when the UK market was a veritable Tower of Babel, full of competing not-yet-PC-clone models. We remember just a few of them: IBM and Apple for obvious reasons, BBC micro 'cos it was in many ways so far ahead of its time, Atari the leading name in games, Commodore, Sinclair, ... But who remembers, say, the Dragon or the Lynx?

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Commodore and Atari sold better at least on the Low end in 1984, a Commodore 64 was $199, and a 1541 was $249, I think or they could have been $50 cheaper. I know that, it was the year I bought my C64 and got my 1541 as a Christmas gift. IBM had the larger business market and small business market was Apple II and sometimes Commodore. Apple II computers where not that cheap back then, and IBM was even more expensive. I remember looking an Apple II computer, and trying to figure out how to buy one, then I just bought a Commodore which I could afford even though I knew someone who could get me an Apple II at wholesale cost.

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Ditto really great read

Great illustration of the basics - the basics and the Jobsian focus on Customer interaction and quality. Its not rocket science but surprisingly few companies get it today

Very good read

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Devil

Indeed

Sales is a messy business, dealing with customers and all that.

It's far more comfortable to be in administration and churn out "procedures".

And you can piss off the sales people.

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Devil

Not really...

All this article shows is that the reality distortion field has been on for a very long time.

As others have said, it was a crowded market in 1984. The idea that Apple was pushing an overpriced variant of the Apple II at that point was just sad. You can excuse Atari and Commodore for it a bit since their machines were cheap and they had not yet come out with their 68K machines.

If IBM was "failing" at this point then it was because the clones were beginning their rise.

The Apple narcissists are once again fixating on the wrong details.

Any perceived triump attributed to Apple here is statistical noise in the big picture.

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Not up on your personal computer history, are you?

@JEDIDIAH:

IBM was not "'failing' at this point", and Charles never claimed they were. The *PCjr* was failing (though as Charles noted, it had one decent Christmas season - but not a great one), but that had nothing to do with clones. The PCjr suffered from overpricing, disillusionment (hugely hyped before release and lots of negative publicity after release), and a failure to target the correct market; it was too expensive for the lower end of the home market, and inferior to the PC for the high-end home or SOHO markets.

There weren't any PCjr clones until the Tandy 1000, which had negligible impact.

At the PCjr's price point, the Apple IIe and IIc were better choices for most purposes, even though they were only 8-bit machines; and the Coleco Adam looked like a better choice on paper (in practice it was a disaster, with huge implementation errors). If you wanted to spend more, there was the PC and its clones; if you wanted to spend less, there were the Commodore and Atari machines.

Charles' basic point is that Apple did a much better job of marketing the Apple IIc *at the point of sale* than IBM did with the PCjr. That certainly matches my experience; in the store, the PCjr was generally just sitting there, for much the reason Charles gives. IBM spent a reported $40M on PCjr marketing, but it was mostly TV and print advertisements.

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Windows

Demo disk, big whoop

Interesting article and well written and original. But one gripe...

Yet again the 'Apple did this' line gets mismorphed into "Apple invented this and all credit to Steve Jobs' genius'.

Actually any mass-market computer worth its salt in those days had a demo disk, and one which the sales people used. The fact IBM didn't is merely a marker of how little they understood of how retail customers bought machine, not that Apple had the unique insight and mastery which is somehow projected 25 years hence to their retail outlets (which *are* pretty good but who couldn't support those storefronts on *those* profit margins?).

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Retail Presence

Apple really had something that no other computer manufacturer had: a unified retail presence. It went way beyond a demo disk, it was a complete retail system from store fixtures down to the sales pitches. Their //c marketing packet for dealers changed the game completely. I will post one photo I scanned from their marketing materials, look at it and you will understand why I said this was the birth of the Apple Store.

http://i.imgur.com/sGCEz.jpg

There really was nothing like this in the retail computer industry, until Apple produced this campaign in 1984.

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Anonymous Coward

Thatts why

The Apple compabitle is now found iin every home and office,,,

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Anonymous Coward

Well it's not, but to be fair the PC dominance is not thanks to the PCjr either (or even IBM)

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Anonymous Coward

re: The Apple compabitle is now found iin every home and office,,,

That's what I've seen.

Nearly everyone I know who doesn't work in IT and gets a laptop from work runs windows. Their home machines or "personally bought" laptops are Macs.

IT contractors are cheapskates of course and will get the Medion from Aldi. Gamers will stick to windows for the performance but the others have mac laptops and/or imacs.

Personally I think iLife + itunes make the difference. Owners will still probably buy MS Office, but I've never seen a windows equal to ilife at those prices. And easy of use too. Yes a Mac costs more but by the time you've bought all the software you need and brought your pc to its knees with A/V, the experience and the cost is rather unpleasant. Put a DVD in a mac and it appears on the desktop with its name. No daft drive letters which keep moving around and wreak of DOS. I know, its a small seemingly inconsequential thing, but it's something you do all the time.

I'm not a fanboi - I have an android phone, windows, linux and mac at home. They each have their uses, but the most pleasant one to use for day-to-day non-IT work is the old, low-powered mac.

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FAIL

User fail

If your drive letters are moving around, you can't read the DVD name and your AV slows your system the problem isn't with the OS - you are doing something perverted to your PC.

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Linux

Velvet blinders

> Nearly everyone I know who doesn't work in IT and gets a laptop from work runs windows. Their home machines or "personally bought" laptops are Macs.

You must have a lot of rich friends. This goes double if you are on the other side of the pond.

Even if I liked MacOS, I would not touch Apple products due to poor engineering and bad ergonomics. It's too bad you can't run it on better hardware.

Most people outside of IT don't have any appreciation for "the better things" and tend to just be intolerably cheap.

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Devil

Fanboy silliness

> Personally I think iLife + itunes make the difference.

Just don't let your data take a trip across another brand of computer between being recorded and being used by iMovie.

Any cheap software at BestBuy or available free as shareware can do better than iLife.

iLife is a joke for people with no clue or taste.

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"Apple compabitle [sic]"?

If you want anyone informed and sensible to believe that the success of the Macintosh line (such as it is) has anything to do with the success of the Apple IIc in 1984, you'll need to make a far stronger argument than that.

The Mac and the IIc came out in the same year, and were substantially different architectures. Macs have gone through two major architectural changes since. As a company, Apple's been through some pretty major changes too.

Now, someone might claim that Apple's retail marketing was responsible for the early success of the IIc (as Charles described), and is also responsible for the current success of the Macintosh (though that "success" is rather heavily qualified - various 2011 estimates show Mac home market share at around 11% and overall market share around 7%). But that's not the claim you're making, as far as I can see; you're attributing the Mac's success to iLife (really?), iTunes (also available on Windows), and some vague rambling about "A/V software" and DVD use.

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I guess that's why...

1984 wasn't like _1984_.

Now we have the internet and the prediction was a few years early (*SIGH*).

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Excellent

Really great article from an era I remember very fondly. Shows how slow IBM were to understand the retail market against the corporate one.

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Linux

The value of many

I don't think IBM ever has understood the "retail" market.

They never had to really.

Others were able to take up the slack for them.

That's the value of a platform not limited merely to a single vendor. You can have multiple companies each effectively addressing different parts of the market some of which may be mutually exclusive.

You don't have to be excluded because a computer costs you what a new pickup truck would.

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Anonymous Coward

Marketing...

Hasn't changed that much. I ask a market exec level person-- what do you want development to build for you to market?

They say:

Make something for us to sell!

You can see the disconnect.

It still comes down to who can peddle their dog and pony show harder.... only rarely is a market hole recognized and plugged. Although there is a penchant to eating ones babies now (which is good for customers) since that failure of cannibalism lead to near death in the late 80s and there are still people around to remember that event (a few who have not yet shifted to China at least).

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Holmes

Since you were off the clock that evening...

...You should have sent IBM a whopping huge bill for consutant's fees!

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WTF?

history re written

As usual it seems that every one is intent on ignoring the fact that The Commodore 64 was a technically better computer than the 2c, and was out selling IBM and Apple at the time, why pay $700 for a PC Jr when the C64 was under $200. its odd how Computer history seems to have been re written by the Apple boys...

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"technically better"?

It really depends on what you mean as "technically". The C64 had the same speed processor, less available memory, and only really had an advantage in hardware sound and sprite facilities. It did not even look better! OK, it had a 6510 rather than a 65C02, but the differences where not huge, and most software did not take advantage of the re-instated 'missing' instructions in the 6502, or the extra I/O processor port.

The IIc had a screen resolution that was more appropriate for real work (rather than games) and a software portfolio that included real business software. It could be seen by affluent people as a 'real' computer, running 'real' programs, rather than a home computer that was only ever going to be used for games. And if you had good tax advice, it would not surprise me if you could get a tax break in the US for buying something like the IIc that could be considered a business machine!

It also had about as long a heritage as a personal computer could have at the time. I suppose that you could say that a C64 was an evolved PET, but in reality, there was nothing that made a C64 able to claim to be an updated PET except for the possibility of using some of the same (expensive) peripherals. The Basic was not really the same, the character set was different, and the memory map and OS entry points were completely different.

I used an European Apple II color (or should that have been colour), and was always impressed by the card slot capability that allowed the system to be extended in ways that were not imagined by Apple (like the UCSD Pascal system). The IIc only had marginal expansion capability, but included much of what made the II so useful (like disk drives, memory expansion, and I/O ports) in the base system.

There was no way that the C64 could offer many of these features without expensive and often ugly add-ons.

I will not deny that the C64 was successful, but that was entirely down to it's relatively low price rather than it's technical merit, which made it accessible to a much wider customer base. At the time, even £199 in the UK was a significant purchase, and for a normal working family to try to justify spending £800+ (which was the price of a reasonable 2nd hand car at the time) on something with only intangible benefits was just not going to happen. Most families at the time would pay £50-70 for a ZX81 or £125 for a Spectrum if their kids pestered them long enough.

As a foil to this, I don't believe that IBM even offered the updated PCJr in the UK, because there was just no market for it!

I still keep my original BBC Model B running though!

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@Simon Noble

It's revisionist to factor Commodore into the same market as IBM and Apple, and in any case Commodore isn't relevant to the story presented.

The article is entitled "How Apple beat IBM in Steve Jobs' first retail war". It's a story about Apple versus IBM. It's framed like that because the two big beasts in the business computing market at the time were IBM and Apple. You have to rewrite history to pretend that the home and business markets were joined in 1984 — that wouldn't happen until the death of the proprietary home computers in the late 80s and early 90s.

The article is also written from the point of view of a computer specialist retailer. Apple dominated computer retail profits, the Apple II being the first computer to produce over $1bn in revenue in a year. The home suppliers, like Commodore in the US, piled them high and sold them cheap through general retailers like Sears. They didn't invest much in their sales presence in terms of aisle ends or literature since those costs would have to be passed on, which makes them even further irrelevant to this specific story.

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Mushroom

The real revisionism...

The real revisionism is to factor Apple in the same market as IBM.

It was never really a business computer. IBM entering the market really sealed Apple's fate and there's no arguing around that. Macs were just another "home computer" like Commies.

Anyone trying to claim that any 8-bit Apple was more appropriate for "work" is just on crack.

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Fascinating article, thanks.

I worked in an environment at that time surrounded by Apple ][e's, BBCs, acorns, the odd ZX spectrum and even an 'old' commodore PET. The Apple ][ was the one we'd pick for writing stuff on.

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