Apple Launches a Mac Attack

The Macintosh rolls out in a din of publicity and showmanship

Apple Computer's new Macintosh will be introduced this week, accompanied by sirens and ceremony fit for a maharajah. TIME San Francisco Correspondent Michael Moritz watched the computer's development while writing a book about Apple that will be published this summer by William Morrow & Co. His report:

Whispers about Macintosh have circulated for more than two years, but in the past six weeks Apple has been relentlessly thumping drums for its new machine. The company has used a fleet of tractor-trailers to transport a flashy demonstration to 1,500 dealers in six cities. It has primed its sales force, courted Wall Street analysts and tried to arrange deals for exclusive magazine coverage. Even before the machine is out, 100,000 copies of Mac-World, a magazine entirely devoted to the computer, have been printed. By the end of April, Apple will have spent $15 million promoting Macintosh.

The cause of all the hullabaloo is a jaunty, cream-colored computer that will sell for $2,495. From the side, Macintosh looks like an offspring of E.T. and R2-D2 that might start walking. But the fuss is also about Apple, the company that likes to say it invented the personal computer. If Apple is to beat back IBM and continue the whirlwind progress that has taken it on a seven-year ride from manufacturing in a California garage to annual sales of $1 billion, Macintosh must be a triumph.

Though Apple sold more than 100,000 of its He computers during December, the company has been losing out to IBM. Apple's share of worldwide personal-computer sales, according to Dataquest, a California research firm, has slipped from 29% in 1981 to 23% in 1983. IBM's part has grown from 3% to 28%. Last week IBM announced that it will spend $40 million boosting its new computer, the PCjr, which is designed to compete with the Apple lie. Faced with IBM's attack, Apple President John Sculley says: "We've got to make Mac an industry milestone in the next hundred days. If we don't get it together in 1984, Apple is going to be just another personal-computer company." Concurs John Roach, chairman of Tandy, the maker of Radio Shack computers: "If Mac doesn't take off, Apple has to watch out."

In Mac, Apple may have a winner.

The machine, which weighs only 20 Ibs. and can be carried in a tan tote bag, has many of the features Apple introduced in January 1983 with its Lisa computer. It uses a "mouse," a pointing device the size of a stick of butter, that permits users to give commands to the computer with just a push of a button. Like Lisa, Mac relies heavily on symbols and pictures on the screen to help people conquer computer phobia. But unlike the more expensive Lisa, Mac cannot swap information between different programs.

Apple hopes that Mac will differ from Lisa in one important way: popularity. While Lisa was touted last year as a technological marvel, it has been a market dud. The company hoped to sell 50,000 in 1983, but sold fewer than 20,000. The main criticism of Lisa was its $10,000 price tag.

The machine on which Apple is now placing such high hopes started out as a minor project. Mac, as the computer is affectionately called within the firm, began life in 1979, when Jef Raskin, the writer of the first comprehensive manual for the Apple II, was asked to build a computer that would sell for less than $500 and work through a television set. He built a cardboard mock-up and recommended that Apple produce a battery-powered portable home computer that might cost about $1,000. Raskin code-named the machine Macintosh, misspelling the name of his favorite kind of apple. Working with just two others in cramped offices near Apple's headquarters, Raskin tried to make the Macintosh as easy to use as a television set or any other household appliance.

The Mac project coincided with a period of byzantine office politics inside the young company. Apple co-founder Steven Jobs, at the time a vice president, wanted to head the development of the Lisa program, but Apple President Michael Scott and Marketing Boss A.C.

("Mike") Markkula regarded I him as too erratic and inexperienced to handle a major project.

" As a consolation, Jobs was given the Mac program and Raskin shoved aside. Recalls former Apple Accountant Gary Martin:

"Jobs got Mac because it was a small group. Scott and Markkula thought it would keep him out of their hair and he wouldn't bother the Lisa people."

Jobs immediately tried to put his stamp on the project, which he regarded as a test in which he could prove himself.

He wanted to rename it Bicycle, but backed off when the members of his new group protested.

The engineers and programmers were stirred by Jobs' aggressive style. Says Mac Programmer Andy Hertzfeld: "Steve said, I'll get this team that will make a cheap computer and blow the Lisa team off the face of the earth.'" Jobs recruited some veterans of Apple's early days and bet John Couch, then head of the Lisa division, $5,000 that Mac would beat Lisa to the shop window.

The new boss played both nanny and scold to the Mac group, which has grown from 50 in 1982 to 100 today and has an average age of 28. He often spent nights and weekends hovering around the lab as his chief hardware engineer, Burrell Smith, 28, designed five vastly different versions of the computer. To spur his team, Jobs staged frequent parties, sushi dinners and seaside retreats, presented medals to workers, and rewarded the most valuable engineers and programmers with Apple stock options tucked into thin gray envelopes. He embossed their names on the inside of the machine and teased them with promises of fame when the computer came out. Last year when the Mac group moved into a larger home, Jobs spent $ 1 million on decor. The building now has an atrium and fake skylights. He also installed a Toshiba Compact Digital Disc player and 6-ft. tall Martin-Logan speakers that play classical and rock music 24 hours a day.

Jobs left his imprint particularly on the aesthetics of the project. He insisted, for example, that all 50 computer chips be rearranged on a printed circuit board to straighten the solder traces. He worked with the Belgian-born commercial artist Jean-Michel Folon to prepare advertisements for Mac. But the pair found working on different continents too cumbersome, and Jobs retained other artists. Even the publicity brochures accompanying Mac reflect Jobs and contain one of his pet phrases: "Insanely great."

As a boss, Jobs was often obdurate and capricious. When Mac's sound quality failed to meet his standards, he threatened to remove the feature unless engineers corrected the problem over a weekend. The sound, which is provided for games and computer music, stayed. When his group failed to make progress fast enough, he fired off irate memos and abrasively talked down middle managers. Halfway through the project he demoralized the designers by demanding that they produce an entirely new look. He also irritated engineers by refusing to let them show Macintosh to friends, even though he was giving special peeks to outsiders like his onetime crush, Folk Singer Joan Baez.

During 1981 and 1982, while engineers and programmers labored over the Lisa and the Mac, the competition that developed between the divisions sometimes verged on fratricide. At one point a pirate flag flapped above the Mac building as an expression of battle. The Mac team was often condescending about the quality of Lisa and thought the bureaucracy in the larger division resembled that at a large corporation like IBM. Until early last year, the two computers, though superficially similar, might have been developed by separate companies. Programs written for one would not run on the other, and the mice the two used were different. Mac engineers thought Lisa's slimline disc drive, code-named Twiggy, was so clumsy that they tried to design their own. Both disc drives turned out to be too expensive and were scrapped after a development cost of about $6 million. Lisa and Mac now have a drive made by Sony.

While he was developing Mac, Jobs, who became Apple's chairman in 1981, was looking for a new president to guide the company. He ultimately recruited John Sculley, 44, from PepsiCo with a salary and bonus package worth $2 million. Sculley soon began putting some order in the Apple crate. He started by easing out six of the firm's 15 senior executives. Two officials pictured in the company's annual report, which was mailed out only last month, no longer hold the same positions. Sculley, who often lapses into M.B.A.-speak, describes his pruning of the work force from 5,300 to 4,600 as "infrastructure phasedown."

Sculley has boosted Apple's advertising budget by about 30%, but the new promotion has not always been successful. Apple's pre-Christmas television ads, produced by Flashdance Director Adrian Lyne, were disliked by company directors and dismissed by one dealer as "nice foreign movies." Nonetheless, some of Apple's new ads are also unconventional. One early Mac spot features an Orwellian Big Brother and looks like a rock video.

Sculley's most important task was to untangle Apple's line of computers. He compressed development timetables for the production of cheaper and more expensive spin-offs of the Apple He computer. He has also pushed work on a series of Lisa products and has tried to make them compatible with Mac. The new Lisas, which range in price from $3,495 to $5,495, will run programs written for Mac. The pace has taken its toll. Complains one Apple staffer: "People are working their buns off. It's difficult to see straight. We've got crazy schedules."

The early verdict of those who have used Mac is generally good. Says William Gates, chairman of Microsoft, the largest personal-computer software firm: "Macintosh is the only computer worth writing software for, apart from the IBM PC."

Says William Cranz, a Huntington Station, N.Y., computer dealer: "Mac is light-years ahead of the IBM PC." Mac has some of the hallmarks that made the Apple II such a hit. The engineering is compact and elegant, and the machine is perhaps the first moderately priced computer that is easy to use. But Mac has some drawbacks. It is difficult to expand, has a small memory and does not have a color monitor. Apple will have a more powerful version out later in the year, but color is far in Mac's future. And although Mac can be linked to IBM mainframe computers, it will not run software written for the popular IBM PC.

Jobs claims that 100 software companies are developing products for Mac, but only five programs will be available this week at its introduction. Versions of the industry's current bestsellers, like Lotus' 1-2-3, will not be ready until summer.

Apple hopes that Mac will appeal to small businesses and college students. The company believes that executives in small firms will not be as tied to IBM machines as their colleagues in major corporations. Apple already has contracts to supply Macs to students at Stanford, Carnegie-Mellon and Drexel. Cautions Fred Gibbons, president of Software Publishing, based in Mountain View, Calif.: "It may take Apple a year to learn how to sell Mac."

Apple must also make its brand-new $20 million Mac factory run smoothly.

Last week the factory, built to combat the manufacturing know-how of Japanese computer makers, was still having startup troubles.

The Mac represents a conclusive personal victory for Jobs in the battle of office politics. The final proof is that the company's Lisa and Mac divisions will soon merge, and he will take over as head of the combined group. But now the Master of Mac must wait and see whether the public approves his bold machine.