[Figure: Photo of Nigel Searle]
Nigel Searle is Sinclair’s man in Boston. He is responsible for operations in the United States and Canada of Sinclair Research Ltd.
Recently Mr. Searle visited Creative Computing and spoke with publisher David Ahl, about the future plans for the American operations of Sinclair.
N.S.: As a general plan I would like to see us explore one new market every six month period. I think that in four or five months just about anybody who is thinking about buying a personal computer (which is to say the reasonably technically oriented people, the same sort of people who have already bought computers) must be aware that there is an option of only spending a couple hundred dollars to get started. Market awareness is very high.
By the middle of 1981 I would like to achieve a similar level of awareness among people who make either purchasing decision or recommendations regarding computers to be used in schools. Simultaneously, we will focus our own mail-order efforts on the home educational aspects of computers in an attempt to reach beyond the technical audience. Any parent who is thinking of buying a computer for his children will know that there is a low-cost entry point, and will not have heard only of Apple and TRS-80.
It is surprising how many teachers there are who read only educational publications. Even though they may teach math or computing, they don’t read the computer publications. At this point these teachers are totally unaware of the fact that there is such a thing as the ZX-80, and will remain ignorant unless we do something about that by addressing them through the appropriate channels.
My target for the first half of 1981 is to achieve a level of awareness in the educational market. We would like to find a single distributor who is capable of handling this market with relatively little support from us other than the product. We would share all the knowledge we have gained from our experience in other markets, but we are hoping to achieve a rate of growth that will be just about impossible to do on our own.
The negotiations that we are having at the moment don’t look overly promising and I don’t want to suggest that anything is going to happen soon. I believe that traditional publishing companies would make the best kind of partners for the educational market because of they are already selling to schools. They have the sales force to do the job. They have the ability to produce and publish the collateral material, software etc. And like most publishers they realize that their future lies not only in ink and paper. The problem is that their sales force is not necessarily experienced in selling hardware. But you must compromise somewhere.
D.A.: What arrangements do you have with Image Software?
N.S.: What we are selling there is our computer plus Image Computer Products’ Computer Learning Lab as a single package. Our ads in the non-technical publications next year are going to go very strongly on this theme: selling the benefit of in-home education, rather than selling the product itself as we do now to the technical audience.
It does no good to tell someone who does not know what a computer is, that he needs a computer. You’ve got to tell him what it will do for him. Then he will understand. If you are advertising in Popular Electronics, the readers already know what a computer can do for them; they want to know what this particular product is. But for the wider, non-technical market you have to detail the benefits. I think that in a year most of our mail-order ads, for whatever market—technical or nontechnical—aren’t going to look very much like ads for hardware. They will look like ads for software, because all the emphasis will be on applications.
D.A.: That’s where we are now with our magazine positioning: it’s applications and software. We think that eventually there is a much bigger market for that than for the hardware oriented magazine.
From a competitive standpoint, what do you think the impact will be of the new Commodore VIC: a four-color, 5K memory computer with lots of capability for only $300?
N.S.: It is obviously a much keener competitor than anything that exists at the present time. But we’re not going to stand still. One of the amazing things to me is that we have sold as many computers as we have, when all we offer is Integer Basic and 1K bytes of RAM. Within a few months, I hope we will have the 16K RAM and the 8K Basic, which will greatly expand our market.
We feel that we are in a strong position to respond to competition. If Commodore were talking about a $200 price point for the VIC, then I would be more worried than I am. I think they will offer more competition than anyone else in the market at the moment. But I don’t think we are going to have much difficulty in saying, “Here’s our machine. Here’s Commodore’s. Look at the difference in price and look at the difference in functions, and about the only thing extra you get from Commodore is color.”
D.A.: What about some of the newer Japanese entries? Are there any on the horizon that look like competition?
N.S.: The amazing thing to me, again, is that I don’t see any signs from anyone other than Commodore that they are interested in the really low end of the business. I don’t know why Commodore is the only company that has shown interest. Perhaps this is because it hasn’t, in general, been doing very well here in the states. Therefore it has nothing to lose; it’s not going to lose high-end sales by selling a low-end machine.
We have proved that a market exists. Our sales are sufficiently high that we have discussed an advertising strategy calling ourselves “The World’s Number 1 In Personal Computers.” This means that Sinclair has sold more personal computers than any other company—even when you include the models of all the other companies. Frankly, I am not in any hurry to make that claim, nor is Clive Sinclair. We kind of like the fact that nobody else yet seems convinced that a big market exists. The longer they remain unconvinced, the better I like it.
D.A.: You mentioned the 16K memory and 8K Basic. Are they two separate plug-ins?
N.S.: The 8K Basic is a single chip which takes the place of the 4K chip on the main board. You simply remove the cover, take out the 4K chip and plug-in the 8K chip. The 16K memory module plugs in to the connector on the back of the board. It is in a small case about 2 1/2″ square.
D.A.: Do you have any projected prices on those two?
N.S.: The 16K RAM will be $99.95. The 8K Basic almost certainly will be $39.95.
D.A.: I know no one likes to talk about pricing, because you never know where things will end up, but if competition heats up substantially, would you meet it with price or with something else?
N.S.: I don’t mind talking about it. We buy our components from the same people that everyone else does. If you are engaged in a price war, then you have to be very smart in your design, and you have to be smart in your buying. You’ve also got to be very careful that you don’t build at yesterday’s prices and sell at tomorrow’s prices. I hope that we at Sinclair have learned something from being in the calculator business and that we will be better equipped to cope with that sort of downward spiral of prices if it turns out that way.
I am probably more pessimistic about that happening than are most people in the business. I don’t think the personal computer, once it becomes a truly consumer-oriented item, is going to be very different from the calculator in terms of its marketing. Features will count for almost nothing except at the initial stage. All that anyone will care about is that they get the cheapest computer. Because they are dead scared that they will buy one for $50 and tomorrow a friend will buy one for $35 and they will feel like an idiot. That is all that motivated the drive in calculator prices down to $29.95 and then $19.95.
There eventually emerges a price that people are willing to pay and they want the best you can give them at that price. If they can get everything they want then they don’t want to pay more than that critical price. I think we are well equipped to buy components to design the product using our experience with the calculator business. I think we are well equipped to survive that kind of price war and, hopefully, we are smart enough to look ahead to see what kind of product we will need afterward to compete with the Japanese—if indeed it is the Japanese who come along afterward as they did in the calculator business.
The other thing about the calculator business that may be true for the computer business is that there came a time at various stages in the calculator business where you couldn’t sell a calculator unless it was of a particular type. I have said that people weren’t feature conscious, but they were in a very unselective, media-directed way. There were articles about how to buy a calculator—they would say “do not buy a calculator with disposable batteries, it must have an A/C adaptr and recharger.” That remained true for quite a long time until Rockwell brought out the first calculator that ran off a single nine-volt battery. It was far superior to a rechargable battery system.
But because people were told not to buy a throw away battery system because “they will run down in no time at all and will cost you a fortune” people still believed that to be true even when they had a single nine-volt battery unit available to them. Then there was a time you couldn’t sell a calculator unless it had a percentage key, or a memory key on it. Despite the fact that of all the people who bought calculators with a memory key only 2.5% used them, no one would buy one that didn’t have a percentage key; they read in Consumer Reports that you should have one.
It is dangerous to say that the computer business is going to be just like the calculator business. It will be different, and it is probably pointless to make comparisons with other products and other markets. It is, however, going to be more like the calculator business than people think.
[Figure: Photo of a ZX80 connected to a television]
D.A.: I feel that in the market for the low-end computer—not just the Sinclair, but the VIC, Mattell, APF etc.—a big mistake is being made in trying to initially sell the broad consumer market. The best market for these products is made up of people who already have a computer—those who have bought an Apple, Altair etc. — and don’t want their kids playing with it all the time. Or they want a state-of-the-art unit for themselves.
N.S.: Absolutely. In a sampling of thd people who bought our computer from an ad in Popular Electronics, 38% already owned a personal computer. But, obviously, in the long run we do not want to sell exclusively to people who already own a personal computer, because then we can only sell as many units as all other manufacturers put together.
D.A.: My point is that I believe a computer is still a new enough device that someone buying it wants a recommendation from someone else who has one.
N.S.: Perhaps. But there may be another way. You can’t convince a large part of the market until they have actually used the machine. Our consumer market advertising within the next couple of months will start to go on the attack. Rather than hide our free trial offer, money-back guarantee in the fine print, we will put it right up front. So much up front that it might well be the headline. We’ve been kicking around ideas at the advertising agency with lines such as “You can’t try the Sinclair for 10 minutes in any store, but you can try it for 10 days in your own home at no cost.” Just using the old fashioned mail-order ploy that says “Please, please, take one and try it. If you don’t like it send it back. But please try it.” We think that trying it will convince the customer to buy it.