Poughkeepsie Journal from Poughkeepsie, New York • Page 7

Thursday, March 21, 1985 Poughkeepsie Journal 7 The runner stumbles: IBM pulls back from troubled PCjr NEW YORK (AP) IBM'f sur prise decision to stop making the PCjr home computer caps the machine'! brief and checkered history, a path unforeseen when the PCjr was unveiled it months ago. IBM Corp. said Tuesday that with supplies ample and demand weakening, it would halt PCjr output in April and had no plans to resume production. The move will have little impact on the computer giant's financial results; the PCjr was a minor contributor to IBM's I billion in 1984 sales. But ending production of the PCjr, one of IBM's most visible products, was seen as embarrassing to IBM, which scored enormous gains with its office personal computers and which has a reputation for successfully reviving products that stumble.

Some observers said IBM was smart to abruptly change direction so as not to risk further resources on the PCjr for little reward. "In this case they took decisive action, which you could say is a sign of good management." said Robert Fertig. president of Enterprise Infor mation Systems, a research firm in Greenwich, Conn. But others said IBM has mostly itself to blame for the PCjr's problems. "All we have here are a bunch of IBM mistakes; IBM blew it." said William Bowman, chairman of Spinnaker Software Inc.

in Cambridge, Mass. Spinnaker developed education software for the PCjr before the machine was unveiled, assuming the more powerful of PCjr's two models would cost $800 to $900, Bow man said. When it was priced at $1,269 instead, "we dropped production (of the software) immediately" "because the PCjr was simply too costly for the home computer audience, and IBM should have known that. Bowman said. "IBM didn't talk to anybody when they designed this product," he said.

"They tried to enter a market seg ment without knowing anything about the customers." Peter Teige, an analyst with Data quest a research firm in Cupertino, said, "The positioning of the product was never really clear." IBM spokesman John Pope would say only that "we feel Junior is a fine product and the fact that our initial expectations were overly optimistic shouldn't detract from the product." IBM, considered a master marketer In general, previously has been criticized for giving the PCjr a market identity crisis, one of several problems that analysts said contributed to the PCjr's poor showing. Local dealers, customers confused on IBM's plans for PCjr market By George Bernstein Joaraal Mmm editor Computer dealers in Dutchess County said Wednesday they and their customers were a bit confused and frustrated by IBM'a announcement that it was indefinitely suspending production of its PCjr. Some said they got inquiries from consumers looking for markdowns on the PCjr, on the assumption that demand will collapse for a product that's no longer being made. And there was some concern about how well IBM would support the line. If it is to be permanently discontinued.

"We're in kind of an odd position," said Robert Knapp, general manager of Computer Systems Specialists in Wappinger. "The only communication we've gotten from IBM is an open ended statement saying production is being suspended indefinitely. They don't specifically state that they're never going to continue it again." Knapp said he had some customers cancel orders for the model Wednesday, and some of those buyers moved up to the more powerful, more expensive IBM PC. "I can only assume their concern is that the product (the PCjr) won't be supported," he said. Dealers complained that IBM hasn't clarified whether the PCjr is dead, or whether production might resume at some point.

"There are all kinds of rumors going around that maybe it's going to be dropped, maybe they're revamping it. or maybe they just have too many right now," said John Scarchil li of Computerland. He said he doubts IBM would drop the Junior without having something to take its place. "If it does appear it is going to be a permanent withdrawal of a product, then I can foresee prices are going to go down to move out what's in stock." said CSS's Knapp. But Richard Kip of ASD Office Systems in LaGrange said he doesn't ex pect much discounting.

"In that price range, a lot of the other computers have been discontinued. There's not much else in that price range," he said. Kip said the PCjr has been selling well, around here at least, and that he expects IBM may come out with a model to replace it. He said no one has cancelled PCjr orders, and he doesn't expect to have to cut prices to. move his inventory.

"We don't have a ton of them, anyway." he said. Computerland's Scarchilli said he had several calls asking about price cuts, but isn't planning any beyond a sale already in progress. The Junior, along with a color monitor, printer and accessories, is selling for $1,795, he said. Scarchilli said he doesn't expect Apple or others to benefit if the Junior is dropped. Most people will simply move up.

he said. "In general, people are very committe'd to IBM or to Apple. I don't see them crossing over." The PCjr was introduced on Nov. 1. 1981, amid what some observers said rwas the biggest fanfare in the history of computers.

The machine, dubbed "Peanut" by the trade, arrived after IBM established Its more advanced Personal Computer as a best seller in the business market, and after a severe price war had ravaged the home computer business. The PCjr cost much more than most other home computers. But it was expected to appeal to what was described as a growing audience willing to pay more for computer power that exceeded the limited use of machines priced $500 or less. But the PCjr immediately ran into problems. Initial shipments did not start until early 1984, after the 1983 Christmas selling season.

The computer's keyboard was widely criticized as awkward and uncomfortable, its computing power was deemed too limited and its price too high. Nine months later, IBM responded by replacing the keyboard with a more conventional one, for free. It also offered memory expansion equipment and other options to enhance the PCjr. In last year's fourth quarter. IBM's We when no one else con.

oA" Creative 778 3595 f0ndln9 program of 'discounts and other pro motions aroppca the price of the more powerful PCjr to between $800 and $900. IBM also poured about $2 million into advertising and other promotion for the PCjr during the quarter, estimates Dataquest a research firm in Cupertino. Calif. As a result, dealers stocked up on 'the computer, and sales were brisk. IBM sold about 270.000 PCjrs last year, most of them during the Christmas season, according to Future Computing a market forecaster in Dallas.

But after Christmas the price went back up. demand for home computers in general turned sluggish and inventories of" the PCjr grew excessive. IBM then found it could not sell enough of the computers at the higher price to make an adequate prbfit, nor could it Justify continuing to receive the slim profit margin on the discounted PCjr, analysts said. Which pointed up IBM's blunder in marketing the PCjr, some observers said. Teige of Dataquest agreed that many consumers want a computer that is more powerful than those costing less than $500.

But a $1,000 price tag j'seems to be the ceiling" for those buyers, he said. At the same time. Consumers willing to spend more than $1,000 can find computers more advanced "than the PCjr for about the same price, he said. In effect the PCjr at once was too much computer for some and not enough for others, analysts said, and in both markets IBM found itself unable to earn a sufficient profit to continue producing the machine. Employment group for disabled elects officers Mid Hudson Projects with Industry, a new organization formed to promote the employment of disabled persons in the Mid Hudson Valley, has elected its executive committee.

Elected were Peter Fallon of Metropolitan Life, chairman, Gabe Ci calc of Pilot Industries, assistant chairman: Kathv Sortlno. Dutchess Community College, secretary; Lorraine Uptegraft, Hudson Valley Opportunities Industrialization Center, membership chairman: and Mark Ridgeway of the New York State Office of Vocational Rehabilitation, program chairman. 160 INSURANCE YEARS OF DEPENDABILITY rt.jsi ILL 454 HILL (4455, latitat! Slut), OwkIm rfe. Mutual Funds NEW YORK IAPI lb Ta.Ei ItniMI JI Cat llalllJI Rath UU Nl Pen Ma let NL tout Ills NL bjbunjhw aaaaitleae. Nam Colwnta Fanda Grurfh IB Liberty Group PermPrt MM Nl It IncGro let tsi II tht Natlenal AanaclathM Fine II ts NL Jl Ineont in on Am Ldr 114 Nl Phil IM fOI USbvf UN lMt I SecarHbn DMtart, Inc.

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aa, a auaao auata JB MM BJIUtt 4uM 111 ML PmnuI IIP NL. Ac taa tllMla ai Raaamptan chare may OpNH IIMBtJa ja Bmm lljenee Jl Cram ML SI 1 Pona la bit It Jeb kameo appry 1 It Irani Jl nnie $e'i The Ri3ht lookThe Right LabclThc Right Price MEN'S ACTIVEWEAR $12" to 'M99 (compare to s48) Knit Tops and Pants Swimwear SALE ENDS: 328 POUGHKEEPSIE, NY: Route 9, South Road Store Hours: Mon Fri. 10 am 9 pm, Sat 10 am 6 pmrSua 12 pm 5 pm. mftup' WZ maf I h.Tl When you wantu comfort able don't settle for less th.m Florsheim. Step into this Florsheim IDLER, crafted in le.it her cushioned throughput.

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