Apple's new focus on business

Information Procesing

Business Week

May 19, 1980

Just four years old, Apple Computer Inc. has built itself up to $150 million in annual revenues and has become a major force in the emerging market for personal computers. But on May 19 it will introduce what is by far its most powerful system to date, taking dead aim at the fast-growing market for small business computers.

The company's Apple I and Apple II have found wide favor among hobbyists and among executives who work at home after business hours. But they have gained even wider popularity in small businesses, where customers have adapted Apple II to keep track of inventory, personnel, and financial records. It is this market that the company is now addressing. The new Apple III, the company says, is aimed at doctors, financial planners, and other "serious" computer users. "The market for personal computers is expanding at the speed of light, and people are clamoring for a machine like this," claims Steven P. Jobs, an Apple co-founder and its marketing vice- president.

Everything about Apple III is more serious, including a price tag that starts at $4,340 and goes to $7,800. That is a big jump from the $2,200 price of Apple II, but it buys twice the processing power and twice the main memory. The most visible difference, however, is a new display screen with 80 characters -- upper and lower case. Along with a word processing software package to be released in the summer, this will make Apple III a "multipurpose desk-top work station," says Robert F. Wickham, a Mountain View (Calif.) market researcher.

Crucial time

Last year, Apple shipped 65,000 computers, many of which went to the small businesses that are now the targets of Apple III. Those sales make Apple No. 2 in market share, behind Tandy Corp., whose Radio Shack division shipped about 135,000 of its TRS 80 personal computers. Tandy has been making a strong bid for the small business market with its $7,000 TRS 80 Model II, but Apple has a better reputation with these customers, says Edward E. Faber, president of ComputerLand Corp., the largest independent chain of retail computer stores. He adds: "I don't think Tandy has done anything significant in the small business market."

Apple's bona fide entry into this market may be coming at a crucial time. The hobby market, where the company found much of its early growth, is slowing down (BW -- June 11, 1979), and a severe recession could send what sales may be left into a steep decline. In contrast, small business users comprise the fastest-growing market segment for these computers, and Apple's Jobs is quick to recognize that the new Apple III computers are his company's "next shot at the brass ring."

Indeed, Jobs is counting on Apple III to tip the balance in the personal computer market in his favor. Already, he claims that his company is the most profitable in the field, and he predicts that revenues will grow to $1 billion by 1990. All that does not seem to worry Tandy. Says John V. Roach, executive vice-president: "We may have a little something up our sleeve" that should give Apple a run for its money.