Return to the Little Kingdom_ Steve Jobs and the Creation of Apple - Michael Moritz [164]
A decade later IBM was virtually rebuilt around a family of computers given the number 360. In the late 1960s, after leasing companies sprang up to serve as middlemen between the factory and customers, IBM helped savage them. At the start of the 1970s when the so-called plug-compatible manufacturers started to chip away at the market for peripherals, IBM responded aggressively. In the mid-1970s when other mainframe companies introduced powerful machines, IBM cut prices and changed the price structure of the industry.
There were only two conspicuous exceptions. IBM had failed to match Xerox when it tried to sell copying machines and had also played second fiddle in the minicomputer market which was dominated by companies like DEC, Data General and Hewlett-Packard. It was those two examples, the exceptions to IBM’s general ferocity, that offered hope for personal-computer makers. But the moral was plain: Anytime the managers of IBM felt that other companies were threatening their business they retaliated savagely and with a ruthlessness that was hidden behind a benevolent facade. In every decade of its history, when IBM had been threatened by other companies, it had always eventually competed and it had almost always won. IBM had made an art of defying the past and none of its victims ever accused it of playing fraternal games.
So it was with IBM’s personal computer. It was not novel but it was impressive. The Apple II, even as a four-year-old computer, was more elegant than the IBM machine. The Apple was cleverer, it occupied less space on a desk, was nowhere near as heavy, and didn’t need a fan. Thanks to the passage of the years IBM’s had a better keyboard and more memory. It copied some of the features of the Apple II like expansion slots and graphics.
The most impressive feature of IBM’s introduction was not the computer but the nimble way this enormous company had moved. IBM had established a small group to do in thirteen months what Apple had so conspicuously failed to achieve with the Apple III. IBM relied heavily on outsiders. Outsiders were brought in to help plan the product and outsiders supplied software. Microsoft, the company that had licensed a version of BASIC to Apple for the Apple II, developed IBM’s operating system. Personal Software adapted Visicalc to run on the IBM, and the men from staid America even dealt with a convicted felon in the shape of retired phone phreak John Draper, who converted his Easywriter word processing which he had originally written for the Apple II. Outsiders supplied the microprocessor, which like those in the Apple II and III (despite IBM’s assertions to the contrary) was an eight-bit device. Outsiders supplied the memory chips and printer and disk drive.
IBM, which had always relied on its army of salesmen, also announced that it would sell the personal computer through stores like Computerland and Sears Business Machines stores. The computer base price was between the Apple II and Apple III. As the electronics analyst Ben Rosen remarked, “It seems to be the right system at the right price with the right marketing approach for the right markets.”
Neither precedence nor presence seemed to matter at Apple. The company greeted the arrival of the IBM Personal Computer with a full-page advertisement which reeked of earnest goodwill and, some said, condescension: “Welcome IBM. Seriously. Welcome to the most exciting and important