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Will the personal computer go mass-market? (1977)

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Will the personal computer become a mass-market product?

The drive to add computer power and flexibility to the video game is setting the stage for a dramatic battle for supremacy in what may be an enormous new market.

There is a great deal of controversy in the industry over whether the personal, or home, computer will become a true mass-market product. Some do not believe that the average consumer is interested in learning how to use a complex, relatively expensive home computer. But Robert F Wickham, president of Vantage Research, predicts that the combined sales of simple video games, programmable games, and home computers will pass the $1 billion market within two years and reach $1.5 billion by 1982. And even by 1980, he forecasts, home computers will account for sales of $385 million.

If the home computer ever does make it into millions of US households, the path will be through the programmable game players, many experts predict. “The transition from games to a home computer is a straightforward one,” declares A Lorne Weil, vice president of General Instrument Corp., a semiconductor maker. “It will occur,” he believes, “as the consumer becomes conscious of buying a cartridge, plugging it in, and interacting with the set.”

>> Also see: Plugging in everyman: Home computers (1977)

Thanks to the burgeoning hobby market, true computers are already showing up in the home. A C “Mike” Markkula, chairman of Apple Computer Co., Cupertino, Calif, says that the home market for small computers like Apple’s will quadruple to $40 million this year and more than double in 1978. Hobbyists will account for only one-third of sales next year, he predicts, as more and more families learn to use computers for entertainment, education, and household management.

Necessary and useful

“The computer will become a necessary and useful appliance,” he insists. Wilfred J Corrigan, Fairchild’s president, agrees, but he cautions that “we have to get more people comfortable with electronics.”

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For the industry, selling equipment is only part of the object. Just as exciting is the prospect of selling the program cartridges: “It would be a real razor blade business,” says James R Berdell, analyst for Robertson, Colman, Siebel and Weisel. And that is another reason the shortage of product is so frustrating. “We have to push the game units out the door this year and next,” says Shea of Atari, “because we can’t sell a cartridge to somebody who doesn’t have one of our games.” Atari currently offers eight cartridges for its programmable Video Computer System, and Fairchild has 13 for its Channel F.

Only about 1.6 million game cartridges will be sold this year, but Wickham of Vantage Research expects that the industry will sell 33 million cartridges in 1980 as the installed base of programmable games climbs to 16 million. By then, the cartridge price will certainly have dropped from the present level of about $20.

>> Also see: 5 personal computer ads from the ’80s

Wickham predicts that it will fall to an average of $10, producing a total market that year of $330 million. But the price erosion could be greater. The heart of the cartridge, the semiconductor” memory, already sells for only $4 in volume quantities. – From Business Week

Top photo: Commodore PET 2001 series Personal Computer from 1977; Bottom photo: Apple II computer ad from 1977 – “Introducing Apple II: The home computer that’s ready to work, play and grow with you.”

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