Osborne Computer Corporation - History - The Osborne 1

The Osborne 1

After Adam Osborne 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.

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