A Bite of the Big Apple : S.D. Firms Among Companies Riding Wave of Macintosh Success
The vaulting success of the Macintosh personal computer has been a pleasant surprise even to its Cupertino-based manufacturer, Apple Computer. With sales increased by the computer’s “user friendliness,” easy networking and desk-top publishing capacity, the Mac’s installed base should increase by more than 650,000 units in 1988, to more than 2 million units sold.
For the first six months of 1988, Macintosh sales accounted for 13% of all PCs sold through retailers in the U.S., second only to International Business Machines’ 18% market share, according to InfoCorp, a Cupertino-based market research firm.
And Macintosh is gaining market share--up 1 percentage point in share over last year at this time--while IBM slipped 9 points from its 27% market share in 1987.
Those kinds of numbers are good news, not only for Apple but also for the 7,000 “third party support” companies that make software and peripheral products specifically for Macintosh users. The more Macintoshes out there, the bigger the market for the independent companies’ products, ranging from modems and multiplexers to software and circuit boards.
Last week, about 400 Macintosh support companies--including Solana Electronics and Silicon Beach Software of San Diego and Paragon Concepts of Del Mar--assembled at the Macworld Expo trade show in Boston to show off new products, hobnob with corporate customers and develop contacts. The three-day trade show drew an astounding 40,000 visitors, an Apple spokeswoman said Monday.
Sponsored by Macworld magazine, the event has increasingly grown in stature to the point that many Macintosh support companies see it as having critical importance in their overall marketing strategy.
Renting a booth and bringing employees to the show can cost tens of thousands of dollars, but is a worthwhile investment in corporate image, said David Crellen, president of Solana Electronics, a company based in the Miramar Road area that rented a booth and sent five employees to the Boston show.
“If you’re not there, you are making the point that you aren’t serious about making a commitment to Macintosh,” Crellen said.
Solana Electronics makes products that enable off-site Macintosh computers to access or tie into office computer networks. Crellen said products like his R-Server, which carries a list price of $595, will appeal particularly to companies who have employees working on computers at their homes.
Solana took its participation in the Boston show to demonstrate the R-Server and to trumpet a new marketing agreement with Businessland by which the nationwide computer retail chain later this year will begin stocking the R-Server and two other Solana Electronics products in its 160 stores.
Crellen called the Businessland agreement a key element in his 6-year-old company’s strategy of cracking the “business marketplace” for Macintosh computers and support products.
Paired with a deal earlier this year by which the Nynex computer retail chain will begin carrying the R-Server in its 100 stores, the announcement leads Crellen to believe that Solana’s sales will top “several millions of dollars” in 1989, up from less than $2 million expected for 1988. Solana’s payroll now totals 19, twice the number last year.
Crellen said the Macintosh market is growing because of “consistent user interfaces”--meaning Mac users can perform various tasks on the machine by using a consistently similar set of commands. Moreover, Apple has been out in front of its competitors in developing “groupware” or software that is accessible to networks of computers, not just isolated machines.
Apple has encouraged third-party companies to develop support products by becoming an “open architecture” manufacturer--making its technical specifications for the Macintosh and Apple II computers available to all comers at a minimal fee.
To achieve that end, Apple in 1986 set up a nonprofit association based in Renton, Wa., called Apple Programmers and Developers Assn. APDA is responsible for publishing and selling Apple Computer programming languages and technical software, making the technology available for $20 a year to third-party product developers.
Despite Apple’s accommodations, Crellen said companies such as his can expect to remain strong in the market only by keeping “ahead of Apple’s ability to respond to the market and by helping Apple into new markets.” To do that, companies have to remain diversified and develop new products.
Also at the Boston Macworld show was software publisher Paragon Concepts of Del Mar, which demonstrated a new word-processing program called Nisus that it hopes to begin shipping in November. The main attraction of Nisus is its speed and ability to search for words and phrases through various data files, open or not.
If the Nisus product appeals to as broad a market as Paragon anticipates, Nisus sales could reach $4 million in 1989, the first full year on the market, spokeswoman Edwina Riblet said Monday. Sales in 1988 will be only about $120,000, she said. Paragon Concepts, which was founded by UC San Diego professor Jerzy Lewak in 1984, now has 14 employees.
Silicon Beach Software, an established San Diego software publisher that produced Dark Castle, a top selling video game for Macintoshes, also exhibited at the Boston show. Silicon Beach introduced Digital Darkroom, a graphics software program that enables users to incorporate photographs into desk-top publishing designs. The programs works in tandem with a scanner that reads and stores photographs in a computer’s memory.
