Osborne Computer Corporation
Osborne Computer Corporation Industry Computer Hardware Fate Bankrupt Successor Mikrolog Ltd Founded 1980 Defunct 1985 Key people Adam Osborne Products Osborne 1, Osborne Executive, Osborne Vixen
The Osborne Computer Corporation was a pioneering maker of portable computers.
The Osborne 1
After Adam Osborne sold his computer book-publishing company to McGraw-Hill in 1979, he decided to sell an inexpensive portable computer with bundled software and hired Lee Felsenstein to design it. The resulting Osborne 1 featured a 5 inch (127 mm) 52-column display, two floppy-disk drives, a Z80 microprocessor, 64k of RAM, and could fit under an airplane seat. It could survive being accidentally dropped and included a bundled software package that included the CP/M operating system, the BASIC programming language, the WordStar word processing package, and the SuperCalc spreadsheet program. Osborne obtained the software in part by offering stock in the new Osborne Computer Corporation, which he founded in January 1981. For example, MicroPro International received 75,000 shares and $4.60 for each copy of WordStar Osborne distributed with his computers. The software alone was worth $1,500, but the Osborne 1 sold for $1,795; as InfoWorld stated in an April 1981 front-page article on the new computer after listing the bundled software, "In case you think the price printed above was a mistake, we'll repeat it: $1795." Osborne claimed that the new computer had a "significant price/performance advantage", but emphasized the price, stating that its performance was "merely adequate": "It is not the fastest microcomputer, it doesn't have huge amounts of disk storage space, and it is not especially expandable."
The Osborne 1's low price set market expectations for bundled hardware and software packages for several years to come. The company sold 11,000 Osborne 1s in the eight months following its July 1981 debut, with 50,000 more on backorder, although the early units had a 10 to 15% failure rate. The peak sales per month for it over the course of the product lifetime was 10,000 units, despite the initial business plan for the computer predicting a total of only 10,000 units sold over the entire product lifecycle. Osborne had difficulty meeting demand, and the company grew from two employees, Osborne and Felsenstein, to 3,000 people and $73 million in revenue in 12 months. The growth was so rapid that, in one case, an executive who returned from a one-week trade show had to search two buildings to find her relocated staff. The company announced in October 1982 a temporary bundling of Ashton-Tate's dBase II, increasing demand so much that production reached 500 units a day and severely diminishing quality control.
Despite early success, Osborne struggled under heavy competition. Kaypro Computer offered portables that, like the Osborne 1, ran CP/M and included a software bundle, but Kaypro offered larger 9 inch (229 mm) screens. Apple Computer's offerings had a large software library of their own and with aftermarket cards, could run CP/M as well. IBM's 16-bit IBM PC was faster, more advanced, and offered a rapidly growing software library, and Compaq offered a portable computer that was almost 100% compatible with IBM's offering. Osborne's efforts to raise $20 million in capital to rush an IBM-compatible computer to market were unsuccessful.
The Osborne Effect
According to proponents of the Osborne Effect, Adam Osborne damaged his company's current sales when he began showing the Osborne Executive to journalists in early 1983. Dealers rapidly started cancelling orders for the Osborne 1. Unsold inventory piled up and in spite of dramatic price cuts - the Osborne 1 was selling for $1295 in July 1983 and $995 by August - sales did not recover. Losses, already higher than expected, continued to mount, and OCC declared bankruptcy on September 13, 1983. Disagreement exists on whether the Osborne Effect truly caused the company to collapse, with some attributing its failure to other causes.
When it was apparent that the company would be closing down, a company meeting was held with all employees. The first round of layoffs involved sales staff, production staff, and most mid to low-level clerical support. These employees were presented with their paychecks, accrued vacation pay and two-weeks' severance pay. They were also given an Osborne. The second round occurred within the month when the remaining employees were given the same severance package.
Nine days later on September 22, a group of 24 investors filed suit against OCC and several individuals, seeking $8.5 million in damages for masking the company's true financial situation and accusing several directors of the company of insider trading. Osborne emerged from bankruptcy in the mid 1980s and finally released the Osborne Vixen, a compact portable running CP/M, in 1984. However, the company never regained its early prominence.
Commercial rights for the Osborne brand name were later acquired by the Finnish clone PC maker Mikrolog Ltd which is until this day marketing its products (server and desktop PCs) domestically under that once world famous name.
- ^ a b McCracken, Harry (2011-04-01). "Osborne!". Technologizer. http://technologizer.com/2011/04/01/osborne-computer/. Retrieved April 03, 2011.
- ^ a b c d Ahl, David H. (1984-03). "Osborne Computer Corporation". Creative Computing (Ziff-Davis): pp. 24. http://www.atarimagazines.com/creative/v10n3/24_Osborne_Comptuer_Corporat.php. Retrieved April 04, 2011.
- ^ a b Hogan, Thom (1981-04-13). "Osborne Introduces Portable Computer". InfoWorld (IDG): pp. 1. http://books.google.com/books?id=Dj4EAAAAMBAJ&lpg=PP1&rview=1&pg=PA1#v=onepage&q&f=false. Retrieved April 04, 2011.
- Freiberger, Paul; Swaine, Michael (1984). Fire in the valley. McGraw Hill. ISBN 0-07-135895-1.
- Osborne, Adam; Dvorak, J. C. (1984). Hypergrowth : the rise and fall of Osborne Computer Corporation. Idthekkethan Publ. Co. ISBN 0-918347-00-9.
- Leonard G. Grzanka, Requiem for a Pioneer in "Portable Computer" Magazine, January 1984
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