“I knew we were designing a completely new machine, that it would be recognized as innovative (if it was successful) but most of all–it had to work and work reliably,” Felsenstein remembers. “Getting into these oh-how-great-I-am or oh-how-important-this-is mindsets squelches the game of creativity, in my experience.”
The fact that the Osborne 1 was a fully-functioning personal computer in a portable case captured the imagination of techies in 1981. But it was only the second most innovative thing about the system. The most impressive part of the deal was that the computer gave you absolutely you needed to be productive for one remarkably low price: $1795.
Back in 1981, PCs often came with no software whatsoever except for Microsoft BASIC, and the notion of office suites didn’t yet exist. The Osborne 1, however, came with the CP/M operating system; WordStar, the most popular word processor; SuperCalc, a spreadsheet commissioned by Osborne that became popular as a standalone product; and both Microsoft BASIC and its rival CBASIC. (Later on, for a time, it also came with dBASE II, the most popular database manager.) Adam Osborne had assembled the impressive collection of apps in part by striking deals to trade stock for software licenses: he later said that he swapped 2.5 percent of Osborne Computer Corporation to Microsoft in exchange for the rights to distribute its BASIC.
Today, in an era of capable $500 laptops, it can be difficult to understand just how attractive the Osborne 1 was at $1795 (about $4370 in current dollars). At the time, an Apple II with 48KB of RAM (less than the Osborne, but the maximum available) listed for $1530. Two floppy drives and the required interface cost another $1170. A 12″ monochrome monitor was $320. DOS 3.3 was $60, and if you shopped around you could find WordStar and VisiCalc for a total of about $450. That’s around $3500 ($8500 in 2011 dollars) for a system roughly comparable in capabilities to the $1795 Osborne–and while it may have been slicker, it was in no way mobile.
Price was only part of the appeal of the Osborne 1′s all-in-one approach, Thom Hogan, an InfoWorld editor who became Osborne Computer’s director of software, says that the company’s greatest achievement was:
Something that Steve Jobs eventually learned from us, actually: simplicity of customer decision. At the time the Osborne 1 was launched, your choices at that level of capability were basically CP/M based systems from a number of vendors or an Apple II. In both cases, those other choices required you to make a LOT of decisions as a customer. For an Apple II: memory, drives, monitor, sometimes boards to add those things, plus software. A typical customer had to make five or six, sometimes more, decisions just to get the boxes necessary to build a useful system, and then they had to put it all together themselves…So Osborne not only saved the person money, but time and agony on the decision-making. Note how iPads are sold: two decisions: memory and communications. And they work out of the box, nothing needing to be assembled by the user.
The Osborne 1 was the first personal computer product that really did that (even the Radio Shack TRS-80 forced you into a number of decisions). Basically, plop down US$1795, take the box home, unpack it, plug it in, and start using your computer. One of the things that was integral to that was a stupid little <1K program I wrote. Previous to the Osborne, the user had to CONFIGURE CP/M. Even once configured, you’d boot from CP/M, then have to put in your word processing disc and execute from that. When you got an Osborne, you put the WP disk into the computer and you ended up in WordStar. In other words, we booted through the OS to the task the user wanted to do. Again, simplification of both process and pieces. As a result of that the Osborne was a no-brainer in terms of selling it against any other computer that was available in 1981: any sales person could demonstrate “put in the disc, turn it on, start writing” compared to “assemble the computer, configure the software, start the software program, start writing.”
The Osborne 1′s hardware may have channeled existing designs and been engineered by Lee Felsenstein, but it’s reasonable to give Adam Osborne himself credit for the computer’s conceptual approachability. He was, says David Bunnell, “a visionary and a thought leader, and one of the people who defined what a personal computer should be. It should be easy out of the box, and you shouldn’t have to be an engineer or a scientist to use it. He pushed those ideas before there was a Macintosh.”
Here’s a 1981 ad (image borrowed from Fukuhara.com) that evocatively summarizes the Osborne 1′s value proposition–and reminds us that it competed less against other computers than against no computer at all:
The first Osborne 1 units shipped to dealers in June 1981. In August 1982, the company sold $10 million worth of computers; for the fiscal year that ended in February 1983, its revenues reached $100 million.
Thom Hogan says the experience of working at Osborne during its ascent was dizzying:
Remember, with $4 million in capital we generated $73 millon in sales in 12 months. We went from just Adam and Lee working on the prototype to fifteen hundred employees and another fifteen hundred temps in twelve months. While Compaq did similar things a year later, they started with over $20 million in capital and their executive team was a tech-trained one. Osborne’s was a hodgepodge of people doing things the first time…There’s something almost magical that happens in Silicon Valley when the idea is bigger than the capabilities that produced it.
I’ll give you one anecdotal illustration of how insane it could be. The VP of marketing [Georgette Psaris] and I went to a trade show in Chicago for a week. During that time, the company added a building and three hundred employees. They moved almost everyone. So when we got back, I remember Georgette looking out of her office—which hadn’t moved—and trying to find her employees. They were no longer in the same area, and there wasn’t any map of where people were yet. So she had to walk up and down rows of cubicles in two buildings shouting names out trying to find her staff.
With numbers like that, it’s no surprise that the Osborne 1 soon had company in the portable-computer market it created. It got its defining competitor in April 1982, when the West Coast Computer Faire served as the launching pad for a machine called the Kaycomp II (later Kaypro II) from Non-Linear Systems, a maker of test equipment. InfoWorld called at “an Osborne lookalike,” and it sold for the same $1795 price and had a similar software bundle. But there were some differences: The Kaycomp’s metal case made it even heavier than the plastic-cased Osborne, and it had a spacious 9″ screen that could display 80 columns of text.
In June 1982, TIME reported that at “least a dozen” companies had demoed portable computers at a trade show in Houston; by October, The Christian Science Monitor updated the figure to “dozens” of new portable-computer players entering the market.
Adam Osborne wasn’t fazed. In its famous January 1983 issue that named the computer as “Machine of the Year,” TIME profiled Osborne, noted his extreme confidence and quoted him saying of a new competitor, “We’ll kill that machine dead, dead, dead.”
The magazine noted that the upstart was based in Texas, but didn’t say whether it happened to be Compaq, a startup which had introduced its luggable–which InfoWorld described as “an IBM PC act-alike that you can carry around like an Osborne”–at the COMDEX show in November of 1982.
Luggables of all sorts faced featherweight competition in the form of a new portables that were often called “lap-size computers.” Early entrants included Grid Compass, introduced in April 1982 at $8000, and the much cheaper and more popular Radio Shack Model 100, announced in March 1983. Instead of being the size of a briefcase, the Model 100 could fit inside a briefcase–and it ran for 20 hours on four AA batteries. It was nowhere near as powerful as the Osborne 1, but it was a computer which you could use on an airplane.
Another new computer that had a profound impact on Osborne had been announced in August 1981, just months after the Osborne 1. It was the original IBM PC–and while it wasn’t portable, it changed everything about the personal computer business. CP/M had been the closest thing the industry had to an industry standard; IBM’s hardware platform and Microsoft’s operating system would play that role in the years to come.
By August of 1983, InfoWorld published a story called “Transportables: Here to Stay?” It quoted one analyst who dismissed the possibility that laptops might displace luggables. But Hal Kinne of Future Computing wasn’t so sure. “Wait until the lap computers become PC- or CP/M compatible,” he cautioned InfoWorld. “Then there’ll be trouble.”
“The Osborne Effect”
As 1983 started, Osborne Computer still seemed to be thriving. “We are no longer a start-up company,” boasted Adam Osborne in January. “We are a force in the microcomputer revolution. We are now the fastest growing company in the history of Silicon Valley.” He did his bragging on the occasion Robert Jaunich, an executive at Consolidated Foods, being named as Osborne Computer’s new president. (Among Consolidated’s products was Shasta cola; Apple Computer wouldn’t name its own soft-drink magnate, Pepsi president John Sculley, as CEO until a few months later.) ” Osborne himself retained the title of CEO.
“We are now the fastest growing company in the history of Silicon Valley.”
–Adam Osborne, January 1983
The same month, the Wall Street Journal published a story titled “Osborne Computer Going Public as Portable Product Succeeds.” It reported on the company’s successes, mentioned the growing competition from rivals such as Kaypro and “a promising new company named Compaq Computer of Houston,” and mentioned new Osborne machines in the works:
The company expects to introduce some more products this spring. One, an improvement on the Osborne 1, is supposed to be a lighter, more compact and less expensive machine with a bigger screen. In addition, Osborne is expected to introduce a portable that mimics International Business Machines Corp.’s best-selling personal computer.
Osborne Computer did release a new computer in May: the Executive, an upscale $2495 luggable with a 7″ screen. It was supposed to complement the Osborne 1 rather than replace it. And it was neither the lighter, cheaper system the Journal had mentioned nor the IBM PC mimic. (Like the Osborne 1, it ran the increasingly archaic CP/M, but Osborne started talking about an Executive II that would run DOS)