The Peanut Meets the Mac

New entries from IBM and Apple battle for attention

When IBM introduced the PCjr last fall, it seemed to many industry observers that the personal-computer game was over. Initial buyer interest in the $1,269 machine was so feverish that sales of competing models slumped months before the so-called Peanut arrived at retail stores. Many dealers felt they would be selling PCjrs as fast as IBM could turn them out. "The market is voting with dollars," said David Wagman of Softsel, the country's largest independent software distributor. "And it's saying, 'IBM will be our standard.'"

Now those predictions appear to have been too sunny. Although IBM expects to ship more than three tunes as many personal computers this year (an estimated 2 million) as it did in 1983, many of the 1,400 dealers who carry the new PCjr have yet to sell even their initial 25-machine allotments. "Inventory is beginning to pile up," says Alexander Stein, an analyst with Dataquest, a California research firm. Says one New York City dealer: "A Cabbage Patch doll it isn't."

Moreover, Apple Computer, which has been siphoning customers from Junior with price cuts on its $1,395 Apple He, has captured the imagination of much of the industry with its two-month-old $2,495 Macintosh computer. Since the Mac does not adhere to IBM's programming specifications, its success directly challenges the standards set by the flagship of IBM's personal-computer line, the venerable and highly popular IBM PC.

Those standards are part of Junior's problem. IBM made the PCjr partly compatible with the PC, which means the smaller machine can run some programs written for the PC. But IBM engineers did not make it compatible enough. Internal differences prevent the PCjr from using more than 50% of the PC's rich library of software. Among the supplements it cannot accommodate are such market favorites as the bestselling business program Lotus 1-2-3. "When a consumer walks in the door, he is under the impression that the PCjr will run most of the IBM software," says Leon Wilson, general manager of Chicago's Computer World stores. "That impression is incorrect."

The Junior's other problems are more visible. Dealers and users alike complain about its toylike appearance, its Chiclet-shaped keys, the built-in design barriers that make it difficult to expand the machine's memory or attach extra disc drives. But its biggest drawback has been price. In the market for home computers, where most machines sell for under $300, even the stripped-down $669 version of the PCjr seems overpriced. "For its level of performance," says William Bowman, chairman of Spinnaker, a leading software publisher, "it is simply the most expensive machine on the market." Although the Macintosh was actually aimed to compete with the bigger IBM PC, the price difference between Mac and the Peanut shrinks to about $300 when the costs of IBM's color monitor, joystick and software programs are added on.

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