Osborne Computer Corporation
Encyclopedia
The Osborne Computer Corporation was a pioneering maker of portable computer
s.
sold his computer book-publishing company to McGraw-Hill in 1979, he decided to sell an inexpensive portable computer with bundled software and hired Lee Felsenstein
to design it. The resulting Osborne 1
featured a 5 inch (127 mm) 52-column display, two floppy-disk drives, a Z80 microprocessor, 64k of RAM, and could fit under an airplane seat. It could survive being accidentally dropped and included a bundled software package that included the CP/M
operating system, the BASIC programming language, the WordStar
word processing package, and the SuperCalc
spreadsheet program. Osborne obtained the software in part by offering stock in the new Osborne Computer Corporation, which he founded in January 1981. For example, MicroPro International
received 75,000 shares and $4.60 for each copy of WordStar Osborne distributed with his computers. The software alone was worth $1,500, but the Osborne 1 sold for $1,795; as InfoWorld
stated in an April 1981 front-page article on the new computer after listing the bundled software, "In case you think the price printed above was a mistake, we'll repeat it: $1795." Osborne claimed that the new computer had a "significant price/performance advantage", but emphasized the price, stating that its performance was "merely adequate": "It is not the fastest microcomputer, it doesn't have huge amounts of disk storage space, and it is not especially expandable."
The Osborne 1's low price set market expectations for bundled hardware and software packages for several years to come. The company sold 11,000 Osborne 1s in the eight months following its July 1981 debut, with 50,000 more on backorder, although the early units had a 10 to 15% failure rate. The peak sales per month for it over the course of the product lifetime was 10,000 units, despite the initial business plan for the computer predicting a total of only 10,000 units sold over the entire product lifecycle. Osborne had difficulty meeting demand, and the company grew from two employees, Osborne and Felsenstein, to 3,000 people and $73 million in revenue in 12 months. The growth was so rapid that, in one case, an executive who returned from a one-week trade show had to search two buildings to find her relocated staff. The company announced in October 1982 a temporary bundling of Ashton-Tate
's dBase II, increasing demand so much that production reached 500 units a day and severely diminishing quality control.
's offerings had a large software library of their own and with aftermarket cards, could run CP/M as well. IBM's 16-bit IBM PC was faster, more advanced, and offered a rapidly growing software library, and Compaq
offered a portable computer that was almost 100% compatible with IBM's offering. Osborne's efforts to raise $20 million in capital to rush an IBM-compatible computer to market were unsuccessful.
, Adam Osborne damaged his company's current sales when he began showing the Osborne Executive
to journalists in early 1983. Dealers rapidly started cancelling orders for the Osborne 1. Unsold inventory piled up and in spite of dramatic price cuts - the Osborne 1 was selling for $1295 in July 1983 and $995 by August - sales did not recover. Losses, already higher than expected, continued to mount, and OCC declared bankruptcy
on September 13, 1983. Disagreement exists on whether the Osborne Effect truly caused the company to collapse, with some attributing its failure to other causes.
Nine days later on September 22, a group of 24 investors filed suit against OCC and several individuals, seeking $8.5 million in damages for masking the company's true financial situation and accusing several directors of the company of insider trading
. Osborne emerged from bankruptcy in the mid 1980s and finally released the Osborne Vixen
, a compact portable running CP/M, in 1984. However, the company never regained its early prominence.
Commercial rights for the Osborne brand name were later acquired by the Finnish clone PC maker Mikrolog Ltd which is until this day marketing its products (server and desktop PCs) domestically under that once world famous name.
Portable computer
A portable computer is a computer that is designed to be moved from one place to another and includes a display and keyboard. Portable computers, by their nature, are generally microcomputers. Portable computers, because of their size, are also commonly known as 'Lunchbox' or 'Luggable' computers...
s.
The Osborne 1
After Adam OsborneAdam Osborne
Adam Osborne was an American author, book and software publisher, and computer designer who founded several companies in the United States and elsewhere.- Computers :...
sold his computer book-publishing company to McGraw-Hill in 1979, he decided to sell an inexpensive portable computer with bundled software and hired Lee Felsenstein
Lee Felsenstein
Lee Felsenstein is an American computer engineer who played a central role in the development of the personal computer...
to design it. The resulting Osborne 1
Osborne 1
The Osborne 1 was the first commercially successful portable microcomputer, released on April 3, 1981 by Osborne Computer Corporation. It weighed 10.7 kg , cost USD$ 1795, and ran the then-popular CP/M 2.2 operating system...
featured a 5 inch (127 mm) 52-column display, two floppy-disk drives, a Z80 microprocessor, 64k of RAM, and could fit under an airplane seat. It could survive being accidentally dropped and included a bundled software package that included the CP/M
CP/M
CP/M was a mass-market operating system created for Intel 8080/85 based microcomputers by Gary Kildall of Digital Research, Inc...
operating system, the BASIC programming language, the WordStar
WordStar
WordStar is a word processor application, published by MicroPro International, originally written for the CP/M operating system but later ported to DOS, that enjoyed a dominant market share during the early to mid-1980s. Although Seymour I...
word processing package, and the SuperCalc
SuperCalc
SuperCalc was a spreadsheet application published by Sorcim in 1980, and originally bundled as part of the CP/M software package included with the Osborne 1 portable computer....
spreadsheet program. Osborne obtained the software in part by offering stock in the new Osborne Computer Corporation, which he founded in January 1981. For example, MicroPro International
MicroPro International
MicroPro International Corporation was the publisher of WordStar, a popular early word processor for personal computers.-History:Seymour I. Rubinstein was an employee of early microcomputer company IMSAI, where he negotiated software contracts with Digital Research and Microsoft...
received 75,000 shares and $4.60 for each copy of WordStar Osborne distributed with his computers. The software alone was worth $1,500, but the Osborne 1 sold for $1,795; as InfoWorld
InfoWorld
InfoWorld is an information technology online media and events business operating under the umbrella of InfoWorld Media Group, a division of IDG...
stated in an April 1981 front-page article on the new computer after listing the bundled software, "In case you think the price printed above was a mistake, we'll repeat it: $1795." Osborne claimed that the new computer had a "significant price/performance advantage", but emphasized the price, stating that its performance was "merely adequate": "It is not the fastest microcomputer, it doesn't have huge amounts of disk storage space, and it is not especially expandable."
The Osborne 1's low price set market expectations for bundled hardware and software packages for several years to come. The company sold 11,000 Osborne 1s in the eight months following its July 1981 debut, with 50,000 more on backorder, although the early units had a 10 to 15% failure rate. The peak sales per month for it over the course of the product lifetime was 10,000 units, despite the initial business plan for the computer predicting a total of only 10,000 units sold over the entire product lifecycle. Osborne had difficulty meeting demand, and the company grew from two employees, Osborne and Felsenstein, to 3,000 people and $73 million in revenue in 12 months. The growth was so rapid that, in one case, an executive who returned from a one-week trade show had to search two buildings to find her relocated staff. The company announced in October 1982 a temporary bundling of Ashton-Tate
Ashton-Tate
Ashton-Tate was a US based software company best known for developing the popular dBASE database application. Ashton-Tate grew from a small garage-based company to become a multinational corporation...
's dBase II, increasing demand so much that production reached 500 units a day and severely diminishing quality control.
Competition
Despite early success, Osborne struggled under heavy competition. Kaypro Computer offered portables that, like the Osborne 1, ran CP/M and included a software bundle, but Kaypro offered larger 9 inch (229 mm) screens. Apple ComputerApple Computer
Apple Inc. is an American multinational corporation that designs and markets consumer electronics, computer software, and personal computers. The company's best-known hardware products include the Macintosh line of computers, the iPod, the iPhone and the iPad...
's offerings had a large software library of their own and with aftermarket cards, could run CP/M as well. IBM's 16-bit IBM PC was faster, more advanced, and offered a rapidly growing software library, and Compaq
Compaq
Compaq Computer Corporation is a personal computer company founded in 1982. Once the largest supplier of personal computing systems in the world, Compaq existed as an independent corporation until 2002, when it was acquired for US$25 billion by Hewlett-Packard....
offered a portable computer that was almost 100% compatible with IBM's offering. Osborne's efforts to raise $20 million in capital to rush an IBM-compatible computer to market were unsuccessful.
The Osborne Effect
According to proponents of the Osborne EffectOsborne effect
The Osborne effect is a term referring to the unintended consequence of the announcement of a future product ahead of its availability and its impact upon the sales of the current product....
, Adam Osborne damaged his company's current sales when he began showing the Osborne Executive
Osborne Executive
The Osborne Executive was the planned successor of the already commercially successful Osborne 1 portable computer by Osborne Computer Corporation. The Executive was a collection of the good features from the Osborne 1 and fixed some of its predecessor's flaws....
to journalists in early 1983. Dealers rapidly started cancelling orders for the Osborne 1. Unsold inventory piled up and in spite of dramatic price cuts - the Osborne 1 was selling for $1295 in July 1983 and $995 by August - sales did not recover. Losses, already higher than expected, continued to mount, and OCC declared bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
on September 13, 1983. Disagreement exists on whether the Osborne Effect truly caused the company to collapse, with some attributing its failure to other causes.
Bankruptcy
When it was apparent that the company would be closing down, a company meeting was held with all employees. The first round of layoffs involved sales staff, production staff, and most mid to low-level clerical support. These employees were presented with their paychecks, accrued vacation pay and two-weeks' severance pay. They were also given an Osborne. The second round occurred within the month when the remaining employees were given the same severance package.Nine days later on September 22, a group of 24 investors filed suit against OCC and several individuals, seeking $8.5 million in damages for masking the company's true financial situation and accusing several directors of the company of insider trading
Insider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
. Osborne emerged from bankruptcy in the mid 1980s and finally released the Osborne Vixen
Osborne Vixen
The Osborne Vixen was a "luggable" portable computer announced by the Osborne Computer Corporation in November 1984, as a follow up to their Osborne 1 and Osborne Executive system....
, a compact portable running CP/M, in 1984. However, the company never regained its early prominence.
Commercial rights for the Osborne brand name were later acquired by the Finnish clone PC maker Mikrolog Ltd which is until this day marketing its products (server and desktop PCs) domestically under that once world famous name.