Computer sugarplums are in short supply
Home computer makers are dangling new treats for shoppers this Christmas. But just try to buy them. The computer snack that many people have been holding out for - the long-awaited IBM Peanut - is out of the shell. But IBM says the new computer won't be available until after the holidays. William Bowman, who had a chance to use the prototype at his software firm, describes the PCjr as ''very easy to use , but higher priced than we expected.'' Other tempting delectables, like the Coleco's Adam computer, are in short supply.Skip to next paragraph
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The choice now is to wait for this new IBM computer, officially called the IBM PCjr, or to fill up on less expensive goodies, like the Texas Instruments 99 /4A home computer.
After deciding last week to withdraw from the home computer market, Texas Instruments has since slashed prices on this computer to $75. ''It's the best buy at the moment,'' says Harold Kinne, senior vice-president of Future Computing, a market research firm in Richardson, Texas.
Like last Christmas, the market this year is alive with activity - but of a different sort. For instance, the demand for video games and game machines has weakened considerably. ''The driving force now is computer literacy, children's educational software, and word processing,'' says Jeanne Dietsch, president of Talmis Inc., a research firm in Oak Park, Ill. The consumer is more sophisticated, and is looking for a computer that can do more than play games.
Computermakers are responding. Early this year Atari Inc., a division of Warner Communications, introduced two new computers with greater capabilities, the 600XL and the 800XL, which sell for $199 and $299. And Coleco Inc., a company that only made game consoles, began shipping its long-delayed family computer, the Adam, in October. The Adam is sold as one package, which includes a printer and word-processing software, for a suggested retail price of $695.
Manufacturers like Commodore, which were already making more-sophisticated machines, have benefited from this change of consumer interest. ''One of the reasons Commodore did very well in the home computer market . . . was that you could use it for business, you could use it for word processing,'' explains Robert Freeman, an analyst at Input, a California research firm.
But demand for these products is so hot that none of these manufacturers can turn the wares out fast enough. ''We're working on a very sizable backlog right now, almost 700 units,'' says Herbert Kline, who sells Adams through mail order and at his two Markline stores in the Boston area. ''We've got demand outstripping supply for the 600XL and 800XL,'' says Atari spokesman Bruce Entin. ''We are working as fast as we can to straighten out the imbalance.'' The company is just now shipping the 800XL units.
In some cases, that fast work has resulted in fading quality. Although Mr. Entin says this is not happening at Atari, the Wall Street Journal recently reported that wholesalers and distributors have had to return 20 to 30 percent of the Commodore 64 computer because of quality foul-ups. Commodore officials say the reports are exaggerated.
For this buying season, prices are still a big unknown. ''If you'd asked me a week ago, I would have said prices would be stable,'' says Daniel Ross, vice-president for computer products at Timex Computer Corporation, another maker of inexpensive home computers. ''The question now is, what impact will Texas Instruments have?''
Texas Instruments has cut prices on its computer and software to unload stacks of inventory sitting on retail shelves. Consumers could flock to the machine - taking advantage of the discounts; or they could stay away from it - concerned they won't be able to get service once the company stops making the machines. If consumers buy heavily, it will put pressure on other manufacturers to reduce prices. If they hold off, prices could stay where they are now.
Texas Instruments maintains it will continue servicing the computers. ''There's really nothing to worry about,'' says Robert Schledwitz, director of the TI user group of the Boston Computer Society. He believes other software and hardware manufacturers will fill in the gaps once TI leaves off. One problem, however, is that certain products that go with the computer - like software or extra memory storage devices - could run out before the computer does.
There's no doubt that the TI pullout and the PCjr will cause waves - maybe even tsunamis - in this industry. A rush on TI computers could be the end for the weakest in the low-end of the home computer market.
The story is not quite the same concerning the PCjr. This computer, which comes in two versions (costing $669 and $1,269) is positioned between the low end of the home market and the business market for personal computers. It is priced below its main competitor, the Apple IIe.
''You can expect that Apple will have to drop their price to compete,'' says Mr. Freeman of Input.
But Apple officials don't agree. Says spokeswoman Barbara Krause, ''We have no plans at all to drop our prices.'' Instead, the Apple strategy is ''to continue adding value to its products.'' But nothing is fixed in concrete. ''The market will ultimately judge,'' she says.