Kaypro Corp. stepped into a new market Monday with the introduction of a desk-top computer engineered to be compatible with the IBM's powerful AT model and designed to lead Kaypro to a new era of profitablity.
Kaypro plans to begin shipping its new 286i computer by March 15 and could have 2,000 units a month in production by June, officials said. Within a year, the 286i could account for between 25% and 50% of all Kaypro sales, according to David Kay, director of marketing.
Dealers said the introduction of the the Kaypro unit comes while IBM's version is plagued by quality control problems that are limiting supplies in the field. The Kaypro unit, packaged with six programs, is intended to sell for $4,550, or about $1,250 less than a similarly outfitted IBM. The basic IBM PC AT unit, without software, sells for about $3,995.
Sales Force Regrouped
The introduction also comes while Kaypro is reorganizing its troubled manufacturing operation and regrouping its sales and marketing force. In the past several weeks, about 30 employees have been fired at the headquarters office following the appointment of new national and field sales managers. Kay said the firings at home were counterbalanced by the hiring of about 20 new field salesmen in the past several weeks. He said 50 additional salesmen could be hired in the next several months.
Kaypro reported a net loss of $267,683 for the fiscal year ended Aug. 31, largely due to shrinking margins and inventory shortages. The loss compares to net income of $12.9 million in the previous year. In the first quarter of the current year, Kaypro reported net income of just $72,872, compared to $2.8 million a year earlier.
The importance of success for Kaypro in the IBM-compatible market was underscored by the hoopla and secrecy that accompanied the new computer's introduction. "There you have it, " said President Andrew Kay as the computer was unveiled at its headquarters for 60 of the company's leading dealers. "The computer for 1985."
Expecting Big Sales
That claim may be predictable hyperbole from the company's founder, but dealers said they too are expecting big sales for the 286i. "If they're only going to produce 2,000 a month, we'll be in big trouble in the field," said Peter Covin, owner of Computer House in Denton, Tex., echoing the beliefs of many dealers gathered here. "I could sell two of these today to customers waiting" for an IBM unit, he said.
The Kaypro 286i is based on the same 80286 microprocessor that is used in the IBM AT model. It has a standard 512 kilobytes of random-access memory and two double-sided, high-density floppy disk drives.
Dealers said they expect the unit to be purchased by "power users" including small businesses--typically those that need voluminous accounting applications--and by software programmers. David Kay said Kaypro is aiming at the small business market, while IBM is focusing more on the Fortune 500 market for its AT model. Kaypro, with its lower price, is also hoping to attract the growing number of personal computer users who have outgrown their initial units.