How Apple beat IBM in Steve Jobs' first retail war

A Christmas, PoS tale

How to attract customers and influence people ...

We created a simple word processing document and printed it in mere seconds, using Appleworks. The IBM machine used PFS:Write. At the end of the demos, the VP was baffled. The demos were relatively equivalent, demonstrating the same functions, the computers were fairly evenly matched in cost and features, why wasn't the PCjr selling?

I told the VP that he'd failed to observe one thing. Notice that the PCjr was inactive and had a blank screen when he first approached it, but the //c had a nice demo disk that attracted him to interact with the machine. I explained that we could not leave the PCjr in an operating condition, customers would shoplift the expensive ROM cartridges, so we had to keep them locked up and only demo the machine on demand. But if someone swiped the Apple demo disk, I had an extra disk in the back and I could just make a new copy. I explained how this was the crucial difference, the Apple attracted customers all by itself, but PCjr was an inactive lump of plastic unless we actively demoed it. Apple had a carefully planned retail experience, IBM basically had none.

So the question was posed to me: how does IBM fix this?

I told the VP there was absolutely no way to catch Apple, their campaign had been building for months. I said they desperately needed an interactive demo disk like Apple's, but there was no way they'd be able to write and distribute anything like that before Christmas so they were pretty much screwed. I was completely blunt in my opinion. IBM has huge marketing forces, but they are notoriously slow to get into action. The IBM VP seemed to agree that any new sales effort was too little, too late, but he asked for a copy of Apple's demo disk, so the owner quickly popped it out of the //c and handed it right to him. We wrapped things up, and the VP thanked me for my help and we all went home. It was a Friday night, and time for some rest before the big sales weekend was upon us.

On Monday morning, a courier arrived with a package from IBM, containing new demo disks for the PCjr. I looked at the dates of the files; they were all created from scratch on Saturday or Sunday. It was obvious what happened, the IBM VP had cracked the whip, and a huge group of programmers had labored continuously through the weekend to produce this disk, and shipped copies out to every IBM dealer in the US overnight at huge expense. We ran the demo disk and it was absolutely fantastic.

From that moment forward, the PCjr matched the //c in sales. I had given IBM exactly the information they needed. I didn't think they could respond in time, but they did the impossible. IBM put a huge dent in //c Christmas sales, and that was the only reason the PCjr existed. It had no function except to kill Apple II sales. Still, it was a Pyrrhic victory for IBM, they lost money on the PCjr, but they gladly flushed money down the toilet as long as it kept people from buying Apple computers.

In the end, it was a very successful sales season for everyone, money was moving and we couldn't grab it fast enough, and everyone went home believing they had achieved their goals. It was also the zenith of the 8 bit computer era, and the dawn of mass-market computing.

And 15 years before Apple launched its first retail store, it showed Steve Jobs manic attention to detail. Apple couldn’t control everything in the store, but it could try and make the point-of-sale experience insanely great. And that sold computers. ®

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