Digital Halts Production of Rainbow PC
Digital Equipment Corp. said Tuesday that it has quit making its slow-selling Rainbow personal computer and that it has enough of the machines on hand to meet demand “for the foreseeable future.”
But Digital, based in Maynard, Mass., insisted that it would be “absolutely inaccurate” and “categorically not true” to conclude that it was abandoning the Rainbow and pledged that it will unveil an improved version of the machine later this year.
Digital, a leading producer of larger computers that began peddling the smaller Rainbow to office users in 1982, drew criticism from customers for what were considered technical shortcomings in the computer. Analysts say sales have fallen far below expectations.
“They basically said they wanted to be in the personal-computer market, and they went whole hog into it without knowing the market’s needs,” said Jan Lewis, an analyst at Infocorp, a market research firm in Cupertino, Calif. “I suspect they’re rethinking what they want the machine to be.”
Could Resume Production
Digital was confirming a report in the New York Times that it recently ended production of the Rainbow at its Westfield, Mass., plant. A Digital spokesman, Joe Nahil, said the company could readily begin producing the Rainbow at other plants if demand called for it. He wouldn’t say how many machines were on hand except to say it was fewer than 100,000.
According to Infocorp, Digital shipped just 65,000 Rainbows last year and is expected to merely match that total this year. By contrast, IBM last year shipped about 800,000 of its PC model, which roughly competes with the Rainbow.
“They’ve probably got enough inventory to get through most of 1985,” analyst Lewis said of the Rainbow.
Nahil said Digital “expects to be making enhancement announcements” later this year. He said that means it will be introducing improved versions of the Rainbow that require “retrofitting” of the main Rainbow assembly line.
An internal Rainbow plant memo quoted by the New York Times said “a number of Digital plants flatly do not have enough to do today, nor will they in the future. We are one of those plants.” Spokesman Nahil called that “an unfortunate choice of words” by the author of the memo and said it referred to previously announced plans to trim white-collar manufacturing employment to 25,000 worldwide from the current 30,000.
Digital hopes to accomplish that by attrition, retraining and transfers to other jobs rather than layoffs, the company said. It is unrelated to the fate of the Rainbow, and “we do not currently anticipate laying off any people,” he said.
