At the start, Apple’s marketing strategy was not the result of any clearheaded vision. Notions of product life cycles resembled the sort of patterns that were common in the semiconductor industry where chips were liable to be superseded within twelve months of introduction. The early gaffes were concealed by the forgiving nature of an expanding market. At first there was great uncertainty at the Regis McKenna Agency about Apple’s prospects. The account executive, Frank Burge, explained, “People who knew Markkula and Apple wondered whether they would make it. We kept saying ‘These guys are flakes. They’re never going to make it.’ Jobs and Wozniak looked as if they were on something. It was counter to everything we believed in.” The agency people looked at Markkula, whom they didn’t consider to have much of a reputation for marketing, and Scott with his manufacturing instincts, and worried that nobody at Apple had any experience selling to consumers.
To hedge his bets McKenna took on another computer company, Video Brain, which at the start of 1978 announced a non-programmable computer named The Family Computer, with the hope that people would plug cartridges in and use the machine at home. The product was greeted enthusiastically by the press and by buyers for major department stores who felt that consumers wouldn’t want to learn how to program. Eventually consumers balked at the price, which kept creeping up, aided by the company’s ambitious decision to make the semiconductors for the machine. Video Brain failed.
However, for some months McKenna had a tough time trying to decide whether to dump Apple in favor of Video Brain. Though the agency chose to stand by Apple, its caution was reflected in the size of the advertising budget it proposed for the company’s second year. McKenna proposed that Apple spend $300,000. Markkula insisted that the budget be doubled. Markkula was convinced that it was futile for Apple to try to eke out a living on a small share of the microcomputer market and steadfastly insisted that Apple had to look imposing and pretend to be large if it was ever to become a force in the industry. McKenna explained, “I’m always conservative with very young companies. I don’t want to be stuck with unpaid bills of one hundred thousand dollars. Markkula kept saying ‘We must develop a position early.’ He really pushed for that. It was a very important decision.”
The advertisement that introduced the Apple II showed a kitchen with a woman merrily at work beside a chopping board while her husband sat at the kitchen table using the computer to attend to more worldly chores. The copy was unequivocal about what the computer could be used for: “The home computer that’s ready to work, play and grow with you . . . You’ll be able to organize, index and store data on household finances, income taxes, recipes, your biorhythms, balance your checking account, even control your home environment.” The advertisement also carried a lot of technical specifications which were aimed at the ardent hobbyist but were not calculated to appeal to the layman. Keen hobbyists with agile hands and a technical bent were told they could buy the Apple II in the form of a single printed circuit board for $598.
A large poster which started to appear in computer stores about the same time carried the distinctly equivocal slogan APPLE II: THE HOME/PERSONAL COMPUTER. Markkula was quoted at the time as saying that Apple would not be an exhibitor at the National Computer Conference, the traditional showcase for manufacturers selling to businesses, but would concentrate its efforts on the Consumer Electronics show. Apple’s advertising manager, Jean Richardson, admitted, “There was not a lot of sophisticated strategy. They thought they were selling to people in a home.”
The magazines in which the advertisements appeared were more important than the copy or the look. Compared to companies like Compucolor, a Georgia company that produced a color computer, Apple’s earliest advertisements were wan. As well as buying space in hobbyist magazines like Byte, Apple, during its first year, also advertised in Scientific American and Playboy. They were expensive places to advertise but the nature of the magazines helped lift Apple above the crowd of other small computer companies. Apple also placed little adverts, designed to boost the corporate image, that didn’t say much about the computer but were bright and perky and written by McKenna himself. One of the most popular began: “A is for Apple. It’s the first thing you should know about personal computers.”
At the end of 1977 Digital Research’s Gary Kildall again wrote to Jobs and among other subjects politely recited his concerns about Apple’s marketing: “From our earlier discussions I believe you want to address the consumer market. . . . The Apple advertising is somewhat misleading. . . . The Apple II is not a consumer computer and, even though I have had ‘previous computer experience,’ I had some difficulties getting parts together, and making the system operate. . . . Further, commercial appliance manufacturers do not advertise products which do not exist. . . . Your advertisement implies that software exists (or is easily constructed) for stock market analysis and home finance handling. Do these programs exist? Secondly, a floppy disk subsystem is promised by the ‘end of 1977.’ Where is it?” Kildall was right on all scores, and the program that allowed an Apple to connect to the Dow Jones ticker appeared a year after it was first announced. All told, Apple’s early ads reflected Markkula’s own hobbyist bent.
Though the line of the early advertisements missed the mark, there was a change in strategy within six months of the Apple II announcement. It was the sort of luxury given to a tiny, invisible company in an industry that was too small to be taken very seriously. Apple was able to take advantage of its obscurity and the forgiving nature of an expanding market and consequently had much more freedom to maneuver than a large company whose blunders would be magnified.
A memo to Apple from the McKenna Agency in early 1978, outlining a marketing strategy, demonstrated a clear understanding that the time when consumers would use computers in the home was far away. It also reflected McKenna’s anxiety that Apple not ruin a consumer market by making promises that couldn’t be fulfilled. The agency also began to identify its targets, recognizing the differences between the hobbyists, the “programmable calculator market,” and the markets in schools and universities. And within thirty-six months of its earliest advertisements, Apple started running television commercials that tried to remove the impression that the Apple II was a plaything or home computer. The spots featured talk-show host Dick Cavett posed with housewives who were using their Apples to run a small steel mill or trade in gold futures.
Apple’s advertisements were devised for an industry where small companies drenched their computers in superlatives. For skep-tics there wasn’t much room to argue. There was no authoritative market research. MITS had taken out full-page advertisements with the copy shaped in the form of a large figure 1, boasting that the Altair was the leading computer: “When you buy an Altair, you’re not just buying a piece of equipment. You’re buying years of reliable, low-cost computing. You’re buying the support of the NUMBER ONE manufacturer in the micro-computer field.” Vector Graphic called its machine “the perfect micro-computer”; the IMSAI 8080 was dubbed “the finest personal computer”; Radio Shack announced “the first complete, low-cost micro-computer system.” Processor Technology named the Sol “The Small Computer.” Apple trumpeted its machine as loudly as the rest.
In July 1978, barely a year after the first Apple II was shipped, a double-page advertisement in the trade magazines carried the banner headline WHY APPLE II IS THE WORLD’S BEST SELLING PERSONAL COMPUTER, a boast that just proved that numbers can be dredged up to support any claim. About the same time another advertisement, which also stretched reality, read “No wonder tens of thousands have already chosen Apple.” Chuck Peddle, who worked on the Commodore PET, thought “Apple consistently overstated their position and contribution.”
The corporate image was also reflected on the counters of computer dealers. Many of the stores were in a fragile state. They were strapped for cash and managed by hobbyists who sometimes seemed more interested in the computers than they were in their customers. Apple had a hunger for dealers. Some
prospective independent dealers trooped to California, were antagonized by officials at Commodore, and found far more affection at Apple. From the start Apple also understood that the attitude and appearance of its dealers were important. For instance, it forced a dealer in San Francisco to switch his company’s name from Village Discount to Village Electronics and modeled the dealer agreements on those used by Sony.
When Computerland, a franchise chain of computer stores, started to open outlets around the country, Apple tagged along, Markkula was the linchpin for setting up the original arrangements with Computerland. He took to attending store openings and giving computer demonstrations. Ed Faber, the head of Computerland, said, “It was one of those mutually advantageous relationships. Apple had a product; we had the beginnings of a retail distribution system. The more success we had, the more success they had. The more success they had, the more succcess we had.” Apple, however, also used it dealers to help a limited amount of money go a long way. It was the first company in the personal-computer business to start a co-op advertising program where factory and dealer shared the costs of advertisements. Faber said, “It frightened other manufacturers. They thought we were so closely allied with Apple that they wouldn’t get any recognition in our stores.”
Some of Apple’s success could be put down to the advertising campaigns that were paid for by other companies. After Commodore and Radio Shack introduced their computers, they wasted no time before taking out large newspaper advertisements. At the beginning of 1978, a memo sent to Apple by the Regis McKenna Agency candidly noted that “Commodore and Tandy . . . have popularized the personal computer.” But few of Apple’s competitors proved to be particularly competent and none of their machines reflected the delicate balance of expertise and exuberance that was being knit together in Cupertino—even though almost every company that, at one time or another, announced or was rumored to be on the verge of announcing a computer was larger, richer, and stronger than Apple. Radio Shack, with its thousands of stores and a twenty-five-million-name mailing list, was supposed to have an edge in distribution. But Radio Shack’s TRS-80 black-and-white computer was tarnished by a low-quality image and proved difficult to expand. This allowed Apple’s adverts to play on the Apple II’s expandable nature. Commodore’s PET had a pleasant name, but the company was dogged by a lack of funds, management by fiat, a keyboard that looked like an upgraded calculator, and a case made in a Canadian metal-bending factory because the company chose not to pay for plastic cases. It was also black and white, which compared unfavorably with Apple’s color. Atari and Mattel, with their stronger names in consumer electronics, were slow to produce a computer, and when they finally did, their machines were inferior to the Apple II. Smaller companies like Ohio Scientific and Cromemco, despite having reliable computers, had not sought venture funding. Kentucky Fried Computers was too whimsical a name for a computer company, but by the time it was changed to Northstar Computers, much of the damage had already been done. Meanwhile, MITS—the number-one name in microcomputing—was swallowed by Pertec, a large Chatsworth, California, company that made peripherals and minicomputers.
But looming behind the small fry was the massive specter of Texas Instruments. And in 1978 and 1979, it was Texas Instruments that inspired knee-knocking fear. The company was 327 million times the size of Apple, made its own semiconductors, had gained experience selling consumer products with a line of calculators that had severely damaged other competitors, and along the way, had gained a reputation for remorselessly pursuing profit. In his newsletter Ben Rosen warned that Texas Instruments had a corporate commitment to personal computers and “when TI has a corporate commitment—watch out.”
While the prospect (more than the eventual appearance) of a Texas Instruments computer stirred up fear in Cupertino, Apple was quietly working with the press. Regis McKenna recalled, “We thought the way to beat TI was with the press. TI had always had an adversarial relationship with the press and Apple had a chance to develop a friendly relationship. The press was the equalizer.” McKenna understood how to handle the press better than any of the senior managers at Apple did. Scott grumbled that he had never been quoted properly; Markkula was not always easy to understand and was likely to rile reporters by presenting them with Apple button-pins or informing them that the story they were about to write would be very important for the company or insisting that buyers would be able to learn how to use the Apple II within half an hour. Jobs, meanwhile, carried away with his own enthusiasm, was always liable to blurt out every secret detail of Apple’s plans. Yet Apple was also something of a dream for a public-relations man. It was a cheerful story that, once told, was difficult to forget and revolved around the sort of distinctive personalities that, at least for journalists, always help give companies a clear image.
McKenna was far more patient and didn’t expect an interview or telephone call to generate a story immediately. He told his clients that they had to build long-term relationships with the press, preached the virtues of patience, and took a more dispassionate view of the stories that eventually appeared. While Apple started to get occasional coverage in trade magazines like Interface Age,it took several years to crack the skepticism and suspicion at better-known magazines where the name of the McKenna Agency wasn’t even recognized. The account executives at the McKenna Agency spent several years wooing the press, answering reporters’ calls, providing background material, arranging photo sessions that never ran, answering questions that never appeared in print, and checking facts. He also coached his clients—trying to anticipate the questions that would be asked, or rehearsing lines that they wanted to etch on an editor’s mind.
McKenna arranged for several busy two- and three-day trips to New York with Apple and endured plenty of snubs and disappointments. He, Markkula, and Jobs visited what they called the “verticals”—magazines that appealed to a narrow audience—and “horizontals”—magazines that had a general readership. They carted an Apple about New York, plodding from magazine to magazine, waiting in lobbies, lugging the computer up elevators, snatching quick breakfasts with journalists from one magazine before dashing off to keep morning and lunch appointments. It was exhausting, tiresome, repetitive work that didn’t lead to many immediate payoffs.
Apple’s early, favorable press coverage had more to do with the inescapable elegance of the computer than with any minutely planned public-relations campaign. There was no stronger advertisement than satisfied owners and quietly, almost imperceptibly, whispers and rumors about the performance of the Apple II began to spread. Daniel Fylstra, the head of what was then Personal Software, a small software company in Boston, talked to other hobbyists and was surprised at what he found. “I began to find people who bought Apple computers and the things actually worked. They worked right out of the box!” Some squibs about the Apple started to appear. In January 1978 Penthouse magazine, in a review of personal computers, noted, “The Apple II is, in many people’s opinion, the Cadillac of home computers.”
Three months later, in the first major review of the Apple II, Carl Helmers, writing in the computer magazine Byte, called it “one of the best examples of the concept of the complete ‘appliance’ computer.” That amounted to a bold endorsement in a magazine that treated the arrival of other computers with a certain amount of circumspection. Byte’s review of the Commodore PET, which appeared in the same issue, concluded: “The Pet is far from the only alternative in the marketplace today. But it is a strong contender.” The reviewer also made the ominous observation: “For several weeks I was unable to get anyone at Commodore on the phone and was left to fend for myself.” Byte greeted Radio Shack’s TRS 80 with what sounded like a familiar refrain: “The TRS 80 is not the only alternative for the aspiring personal computer user but it is a strong contender.”
The importance of blue-chip financial backers and the way in which business journalists often look to canny investors for guidance only became apparent when stories started to appear in general-inte
rest magazines. About the time the Apple II disk drive was introduced, the syndicated financial columnist Dan Dorfman paid a call in Cupertino. His glowing account in Esquire, beneath the headline MOVE OVER, HORATIO ALGER, included this assessment: “Apple has some mighty impressive believers. . . . One is Venrock Associates, the venture capital arm of the Rockefeller brothers; another is Arthur Rock, one of the country’s premier venture capitalists.”
While Apple, two years after it was founded, made the cover of Inc, a magazine specializing in the coverage of small businesses, cracking the skepticism at the major magazines proved a much tougher proposition. Apple was more than three years old before it made the pages of Time. Even then, under the headline SHINY APPLE, the firm was given only one column.
If McKenna was helpful with the mechanical aspects of dealing with the press, Apple’s own managers looked after other parts of the company’s image. The general look of the company was tied up with the owner’s instruction manual. Scott was more eager to ship computers than to fuss over the graphic design of a manual and felt that all the company needed to distribute was data sheets. Jobs thought otherwise. Jef Raskin, who managed the production of Apple’s first comprehensive manual, said, “Jobs wanted good manuals and he fought very hard for them.” When the manual eventually appeared in August 1979, it set a standard that competitors like Commodore, Radio Shack, and Atari publicly admitted they would have to match.
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