Media File: 1981
Sinclair in the News
Business Week
November 16, 1981
A British computer hits it big
In the consumer electronics industry, Clive
Sinclair is known worldwide as a phenomenally creative inventor
whose marketing fiascoes have more than once driven him to the
brink of financial disaster. But one month after springing his
latest product - a dirt-cheap personal computer called the ZX81
- on the U.S. market, the British entrepreneur finally appears
to be reversing that syndrome. The product's success "has
caught [Sinclair] and everybody else by surprise," says
industry watcher Benjamin M. Rosen, president of Rosen Research
Inc. "He's got a tiger by the tail."
Sinclair reports that since the $150 ZX81
was introduced in the U.S. on Oct. 7, mail-order sales rose
rapidly to nearly 700 a day by month's end and now stand at
close to 1,000 a day - as many as had been attained after 18
months of marketing the predecessor ZX80
computer in Britain. This demand, coupled with mounting sales
in Britain, where the new unit has been available for six months,
is now supporting production of 40,000 units a month. Computer
industry analysts calculate that Sinclair's company, Sinclair
Research Ltd., has thus become the world's leading producer
of personal computers. And Sinclair says that within six months,
production will steadily increase to 60,000 to 80,000 units
monthly. In the current fiscal year, he is expecting revenues
- almost all from the ZX81 - to exceed $40 million. No competition.
The success of mail order sales encouraged Sinclair to try the
retail market as well. In early September, the large British
chain, W. H. Smith & Son Ltd., began offering the book-sized,
12-oz. device through 150 stores. "We're selling them as
fast as we can get them," says John N. Rowland, marketing
development manager. "We thought we might sell 1,000 a
week. Instead, we're selling about 1,500, and we're revising
our order schedule upwards every week."
Sinclair says he is also considering a U.S.
retail outlet. Meanwhile, American Express Co. has agreed to
test-market the unit in mailings to many of its 9.5 million
cardholders. And in his latest marketing move, Sinclair has
lined up Mitsui & Co. in Japan. Mitsui projects sales of
20,000 machines this year and 50,000 in 1983.
"Technically, Sinclair is marvelous,"
says Tadahiko Shiomura, general manager of the computer section
at Mitsui. "There is really no competition at this low
price range." Adds Rosen: "It's not a question of
price-performance. It's only a question of price. Sinclair has
found a segment of the market that nobody else has found. It
seems to be a big one."
Still, hardly anyone believes that the ZX81
will unseat more powerful personal computer products, such as
those marketed by Apple Computer, Atari, and Tandy Corp.'s Radio
Shack Div. These products sell for prices beginning at more
than twice that of the ZX81, but they are functionally superior.
For instance, the ZX81 lacks the memory capacity to make it
useful in business applications, and the dearth of ZX81 software
means the user must do most of his own programming. Aiming at
new demand. "The product is really very limited,"
says Jon A. Shirley, vice-president for computer merchandising
at Radio Shack. "It represents a lowcost way to learn about
what a computer is and what it will do." He adds that his
company does not consider the ZX81 competitive with the Radio
Shack line, which begins with a $399 color unit supported with
an array of peripherals and software. "It is not that we
don't take [Sinclair] seriously," says Shirley. "He
has found a niche."
Mitsui executives agree that the ZX81's simplicity
and low cost will make it particularly appealing to students
who want to learn elementary programming and among adults who
want to keep household records. These consumers are unlikely
to spend the $303 needed to purchase the next lowest-priced
computer, Mitsui reasons, but they will spend the $168 that
the ZX81 will sell for in Japan. "We are aiming at new
demand," says Shiomura, "to expand the market."
Mitsui has another reason for selling the product. "Our
other objective is to help relaxation of trade friction between
Japan and Europe," says Shiomura, noting that Mitsui may
augment its current Sinclair selection with other products,
such as a pocket televison set that Sinclair is now developing.
Sinclair is counting on such alliances to
keep his small company from being swamped by the consumer electronics
giants, as it was in the early 1970s when he was among the first
out with low-cost calculators and digital watches. "The
mistake we made in the past was not to establish ourselves on
a world scale. That won't happen again," he vows.
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