| Sinclairvoyance |
IT IS a widely-held belief that whatever happens in the United States will, sooner or later, happen on this side of the Atlantic. If that is so, we must view with some anxiety the sudden withdrawal of Timex from the home computer market in the U.S., a withdrawal announced with a somewhat ominous prediction from Mike Jacobi, vice-chairman of marketing and sales at Timex: "We believe instability in the market will cause the value of inventories to decline, making it difficult to make a reasonable profit."
That portentous statement refers to the price-cutting war waged recently in the States, a war which claimed several dead and not a few wounded, and which continues to influence the marketing strategies of those micro manufacturers fortunate enough to survive.
| 'In the long run it should result in a more stable, more mature computer industry' |
When Sinclair Research introduced the ZX-81 in the U.S. it was welcomed with immediate, if moderate success, selling an estimated 500,000 machines by the spring of 1982, at which point Sinclair handed the marketing to Timex. Six months later Timex launched its version of the ZX-81, the TS-1000, which proved to be even more popular than its predecessor. In three months 600,000 units were sold, securing for Timex a staggering 25 percent of the total U.S. home computer market. So far, so good.
Buoyed by such an achievement, the company predicted confidently at least a doubling of unit sales in 1983. The optimism was shared by others, among them Mattel, Commodore, Atari and Texas Instruments. A year later only two of those companies would still be manufacturing home computers, and only one, Commodore, would not have sustained enormous losses.
The move towards chaos in the market was initiated by Texas Instruments, which made a bid to secure a large share of the market by reducing its prices drastically to compete with Atari and Commodore; cutting them so low, in fact, that the TI 99/4a was selling for $20 less than it cost to produce. In October, 1983 Texas Instruments decided to cut its losses - more than $500 million for the year - and withdraw. Mattel Electronics had already reached a similar decision a month earlier. Atari sustained losses of the same magnitude but survived, bloody but unbowed, and now refuses to be drawn into another price war, instead increasing its prices by $40 a machine. Only Commodore emerged victorious, achieving record sales and appearing well set for continuing success.
| 'At least 25 percent of personal computer owners no longer use them' |
An uneasy peace prevails but for Timex it has arrived too late. During 1983 sales of the new computer, the TS-1500, were poor and even the big discounts offered on the TS-1000 before Christmas, when it sold for as little as $15, did nothing to maintain the Timex share of the market. The latest machine, the TS-2068, barely got off the ground.
Where does all that leave Sinclair Research? It seems likely that the company will forego the low end of the market and concentrate on selling the QL, which at $499 should appeal to buyers who increasingly are expecting more from their computers. The company plans at first to sell through its traditional mail order policy, though it will have to opt for stronger promotion than it exercised in the U.K. where, it seems, Sir Clive has only to announce the ghost of an idea for consumers to be falling over themselves to be first in the queue.
As for stability in the British market, the shakeout has already begun, with Grundy and Jupiter Cantab the first casualties. In almost every direction companies are falling by the wayside. Distributors, software houses and add-on manufacturers are all feeling the pinch and even Sinclair Research disclosed disappointing profits for the first six months of the last financial year.
If all that sounds gloomy, in the long run it should result in a more stable, more mature, computer industry which must be good news for the consumer. The less professional fly-by-night companies will disappear or be amalgamated into larger, more viable concerns, and the consequent tightening of standards will ensure that the buyer has his money's worth. As Mark Eyles of Quicksilva sums up: "The computer industry has grown to the size where you have to have a fairly stable business-like approach to survive."
| 'It has become apparent in the States that all is not well with the consumers' |
There is, however, a nagging suspicion that the worst is yet to follow. It has become apparent in the States that all is not well with the consumers. Research prepared for the U.S. magazine Infoworld, in November, 1983 revealed that at least 25 percent of personal computer owners no longer used them. The percentage was even higher among those who had owned a micro for less than six months. Another illuminating fact was that the less expensive the computer, the less it was being used. Of those who had paid less than $300 for their machines, half had ceased to use them.
Reasons for the micro-in-the-wardrobe syndrome centred on false expectations on the part of the purchaser. Many bought computers only to find the claims made of its use as an indispensable home aid to be greatly exaggerated, as it was little more to them than a glorified games machine which they soon grew tired of using.
Does that signify that all now caught in the latest craze to follow the now extinct hula hoops and pogo sticks? Probably not, for though computers are not yet essential in the home they soon will be, as networks, databases, electronic funds transfer and electronic mail come into their own. Games will then be the side product, not the mainstay, of the industry.
In the meantime, if your Spectrum is gathering dust under the stairs, side by side with the frisbees, skateboards and roller skates, you had better keep quiet about it. It would never do, after all, to criticise the Emperor's new clothes, would it?