Apple's Computer Will Soon Talk With IBM's

January 24, 1985|DONALD WOUTAT | Times Staff Writer

CUPERTINO, Calif. — Bowing to the inevitable, Apple Computer Inc. said Wednesday that it will begin peddling the necessary equipment so that its Macintosh personal computers can talk with the machines of giant IBM.

Apple, which has held itself out as an alternative to a corporate world represented by International Business Machines Corp., made the concession as part of its bid to compete with that company in the market for office computer systems. Apple's strategy, already widely known, was spelled out at the annual shareholders meeting here.

Chief Executive John Sculley said last year's shakeout in personal computers left only Apple and IBM as serious players in the market, and he declared: "We are the unquestioned challenger to IBM."

But it remains to be seen how many corporate purchasing agents will buy computers from a company whose board chairman walked on stage at the shareholders meeting wearing a blindfold in a parody of a lemming.

The gag by founder Steven Jobs, 29, was borrowed from the firm's latest Super Bowl television commercial. The ad showed long lines of briefcase-carrying, blindfolded business people following one another off a cliff--presumably to buy IBM computers for their offices.

Jobs' gag and several others before an adoring crowd of shareholders, many of them Apple employees, reflected Apple's irreverent, anti-authoritarian culture. But it also served to underscore the difficulty Apple has encountered in trying to crack the conservative business market, where it is a cliche that no purchasing agent ever got fired for buying from IBM.

Analysts said the decision to begin making its office systems compatible with IBM products was Apple's only realistic course if it hopes to sell its machines to offices.

Additionally, the Cupertino-based firm unveiled several new products intended to make its $2,000-plus Macintosh more practical for office use.

Sculley said the new equipment signals the beginning of a move into corporate offices that will take two years to implement. He said that will position Apple to take advantage of the next "boom year" in small computers, which he predicted will be 1987.

He said that's also the year in which Apple will have the means to hook office computer "networks" to each other, effectively linking an entire company by computer.

But coming off record first-quarter earnings of $46.1 million, or 75 cents a share, Sculley didn't sound bullish about the current year. Though he said Apple hopes to sell 10,000 "bundles" of Macintosh office systems in 1985, "1985 is not going to be an easy year for the industry as a whole. The market is somewhat fragile."

The equipment shown Wednesday included an extension-cord-like device called AppleTalk, which, for $50, will let two Macintoshes talk to each other. Up to 32 computers can be connected this way, which is considerably cheaper than other office networking methods.

Apple also showed off a $7,000 laser printer that can be shared by as many as 31 Macintoshes to reproduce on paper what appears on a terminal, ranging from words to graphics and sketches, in various typefaces and sizes.

'A Very Nice Printer'

A laser printer looks like a desk-top copier and puts ink onto paper in much the same way that a photocopier reproduces an image.

"It's a very nice printer," said analyst Jan Lewis of Infocorp, a Silicon Valley market research firm. "In terms of (selling to) the Fortune 1,000, it might be their best entry."

The printer and complementary "networking" device, which are scheduled to reach the market in March, are a combination that Jobs claimed will put Apple 18 to 24 months ahead of IBM.

But Apple said the various hardware devices enabling its Macintosh to communicate with IBM PCs in an office network won't be available until fall.

That and other delays, including the wait for significant numbers of business software programs for the Macintosh, prompted some skepticism among analysts.

Though Apple says its Macintosh sales of 275,000 last year slightly exceeded expectations, a lack of business software severely hampered office sales.

"Any talk of the so-called Macintosh Office is moot until Apple can display large amounts of business software," says Computer Letter, a trade newsletter.

The most important such product is Lotus Development Corp.'s Jazz program, which was to have been available in January but has been put off until March.

New York-based analyst Joan McKay of Kidder, Peabody, last week withdrew her "buy" recommendation on Apple stock and lowered her second-quarter earnings estimate to 40 cents per share from 55 cents.

"A lot of what they said today tells me to be careful," McKay said after the annual meeting.

"They're talking about two years. And how fast is the software going to come on stream? There's enough uncertainty about their timing and enough turmoil in the personal-computer market that the investor would be better off investing somewhere else besides computers."

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