THE PRICE WAS RIGHT

Dick Pountain/03 July 1996/14:16/Idealog 23

So farewell then Alan Sugar, the computer industry pundits (and more to the point, the
financial page hyenas) won't have your designer stubble to kick around any more. The
sale of Amstrad to Psion, and the disposal of its consumer electronics business marks
the end of an era in British computing, namely the era when we aspired to make
computers that other nations might want to buy. It's perfectly fitting that Psion should
be the buyer, since Psion is probably the only British computer firm that anyone in, say,
the USA has heard of nowadays (except that they probably wouldn't know it *is*
British.)
I've never exchanged more than a few words with Sugar, but I know quite enough
about the difficulty of his character and the amazing hostility he is capable of arousing
among the press. Nevertheless I've always had a respect for the man because he has
come closer than anyone else to making that elusive beast, the computer for the 'rest of
us'.
Actually 'us' is not the appropriate word here because I'm not one of 'us', I'm one of
'them', that small minority who actually makes money out of computers (in my case by
writing about computers for other people), rather than just spending money on them. I
never bought an Amstrad of course – I never had to because I had access to all sorts of
other better computers, either on loan or at trade discounts. We in the computer press,
more so even than the car press, are usually completely out of touch with the financial
realities of our readers. We always have the latest processor, the fastest hard drives,
and the most video RAM, and we can change our kit (at work at any rate) just about
whenever we like.
Sugar's genius was not technical like Clive Sinclair's (whose business he later
absorbed). He just asked the right question, namely ‘how much is a computer worth to
the average person in this country’, and then had the courage to accept the real
answer, which is ‘about half what every other computer manufacturer thinks it is’. At
the time that meant £399 (around the same price as a VCR), including a printer and
software.
Funnily enough the answer is probably around the same today, though of course you'd
get a lot more computer for your money, assuming anyone had the guts to deliver it.
Sinclair on the other hand asked the question ‘what is the cheapest computer I can
make, regardless of whether it is of any use for anything’ and then applied his
undisputed electronic skills to making the answer come out at £100.
I still occasionally enter an office that has, tucked away in some corner, the horrible
green screen of an Amstrad PCW. One of the daily papers this week described
Amstrad as the Ratners of personal computing, but that is a gross calumny; the true
comparison should be with Volkswagen, or perhaps the Citroen 2CV.
Ten years ago the PCW 8256 was the computer that introduced word processing to
hundreds of thousands people who would have otherwise never purchased a PC – it
was the machine of choice for vicars and Eng. Lit students and Womens' Institutes
and, yes, perhaps even trainspotters. Sugar went on to repeat the trick later with the
IBM-compatible PC1512, and built his company to a peak worth of £800 million. Then
the nerve failed, he conformed with the rest of the industry in chasing the corporate
market, and got his fingers burned by an (allegedly) ropey hard disk supplier.
Sugar's key insight was that, at that time, most people wanted a computer for its use
value rather than its fashion value and therefore were not concerned about having the
very latest technical spec. His hired designers built him an 8-bit, Z80-based machine
running the obsolete CP/M+ operating system, with a surprisingly powerful word
processor that could print out without a fuss (a rare ability in those days). Meanwhile
across the Atlantic another brave man, Steve Jobs, tried to tackle exactly the same
market by the opposite strategy of applying advanced technology, and called it the
Macintosh. Unfortunately using new high technology meant that the price could never
be right, leaving a problem that dogs Apple to this day.
Could someone pull off a PCW today? Well technically the answer must be yes. You
ought to be able to sell a 486-based PC with 4 Mb of RAM, a 200Mb hard drive
running Windows 3.1 populated with a selected suite of shareware-derived
applications, and a cheap inkjet printer for £500. However, as Sinclair and Jobs
discovered, the problem isn't just a technical one. After a decade of intense advertising
pressure I would no longer bet that many people put value for money at the head of
their shopping list. They are now more concerned with brand recognition (MS Office
with everything), ticking off feature checklists, and of course playing Duke Nukem at
high-resolution.
Be in no doubt that it takes courage to enter a truly mass-market, low-margin business.
You have to plan for and partly pay for very large production volumes before you have
sold a single unit. It is gambling on a very large scale and not many folk have the
stomach for it nowadays.



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