News for the top: what's really going on at Tandy. (Tandy gram) Ed Juge.
One of the great joys and consuming passions of our industry seems to be the incredibly prolific rumor mill. The entertainment value would be hard to deny. However, when you have made--or are about to make--a big investment, it is reassuring to be able to separate fact from fiction. I guess that's why the editors asked me to sit in this month and discuss Tandy Corporation/Radio Shack computers and computer directions. Since our rumor mill is one of the most active (or so it seems to us), I didn't require much persuading.
Our entry into the MS-DOS market in 1983 with the Tandy 2000 and last year's expansion of that line with the Tandy 1000 and 1200HD has received quite a bit of attention. The 1000 has set sales records for us from the day it was introduced. Recently, we announced very aggressive MS-DOS product pricing. Tandy's intention to be a leader in this portion of the market is obvious. It is important to say that we consider the 1200HD our only IBM "clone."
Our strategy is to continue as the price/performance leader, but also to bring something extra to the table with our offerings. With the Tandy 2000, it was ultra-high performance in a single-user MS-DOS machine (notice I didn't say "compatbile" ... we said from Day One it wasn't). Today, in the single-user market, the performance of the 2000 is about equal to that of the IBM PC AT, which sells for more than twice the price. The 1000 offers full IBM PC compatibility, plus enhanced graphics and sound, and a smaller footprint, and has most of the "common" extras built in. And we have announced for the 1000, 1200HD, and 2000 VIANET, the only available network that does not require you to dedicate one machine as a system fileserver.
Our future direction will be to leverage from the software standard and the growing software library created for the IBM PC, rather than produce "me-too" products.
Concern is often expressed over the future of our "older" products, so let me say that the Tandy 2000 will remain in our line for the foreseeable future. We have more than 120 software packages available for it in our private labeled and Express Order software lines. That includes almost all of the IBM PC top 50. And the selection continues to grow.
A Future for "Older" Machines
Where does MS-DOS leave our other computers? Of most concern, because of the huge installed base, is the Model 4. True, we have pared down the line, dropping the cassette, transportable, and single-disk versions. With the falling price of the dual-disk model, sales of the cassette and single-disk units had slowed. And even though you won't find a more enthusiastic and devoted group of owners than our Model 4P folks, transportables just weren't moving well for any company that also sold a desktop version. The dual-disk unit should continue until the marketplace tells us it is no longer a product.
Several factors are at work here: TRSDOS 6 is an outstanding operating system. (An admittedly prejudiced mainframe programmer said to me just yesterday, "It's the only real operating system on a micro today.") And there is a tremendous base of mature, proven TRSDOS and CP/M software available for a wide variety of tasks. The 4 is still a very cost-effective computer, and extremely popular with schools. If we were going to drop it, would we be introducing a new double-sided drive version this fall?
Color Computer owners are concerned, now that the Tandy 1000 is the first fully IBM PC-compatible computer available for less than $1000. Where will that leave the CoCo? I can't deny that some customers who last year might have bought a 64K disk CoCo system with all the trimmings are now choosing the 1000. But there are still many, many folks who don't want to plunk down that kind of cash all at once. They want a machine that allows them to start small and build.
No home computer on the market today has the potential horsepower of the Color Computer. Coupled with disks and a sophisticated operating system, it can handle multi-tasking and even multi-user operation. Try that with your Commodore 64. So, we believe the CoCo also has a good future, even though it may share some of it's "high end" buyers with the Tandy 1000.
In lap porrtables, we still seem to be the leader. We have been accused by our competition of producing niche machines, because they are not high horsepower PC-compatibles. From sales estimates I have seen, our niche must be a pretty large one! As we suspected, not too many people have need for heavy, bulky, expensive PC-compatible portables. The marketplace isn't as big as we had hoped, but we seem to have tapped what there is better than anyone. Even in competition with the PC-compatibles, our Tandy 200 is moving quite well. And to squelch another rumor: there is not a Tandy MS-DOS portable "in the chute" at this time.
At the upper end of our line is the Tandy 6000. It is reported to be the Unix/Xenix market share leader. And that includes micro, mini, and mainframe machines. The 6000 is twice as fast as the 16/16B that made us the leader, and the 6000 is without a doubt the market price/performance leader. This summer, we'll have our VIANET local area network available for the 6000.
Software is the name of the game today. That is really the attraction of MS-DOS: most of the really exciting programs have been developed there first. Maybe that realization has struck Mac owners after the fascination of geewhiz icons and mice has worn thin. So, what directions will Tandy be taking?
As you know, we have an in-house programming staff. They support all of our private-labeled software, regardless of how we acquire it. They support the operating systems, languages, and utilities. But most of our applications software is now written by third parties.
Scripsit is a Tandy product, as is the new Quartet accounting package, and DeskMate. So, we will be doing some exclusive in-house packages when there is a reason, but we intend to rely mostly on "big-name," market proven software from leading software firms.
The universal problem of software support is making our Express Order software program very attractive and successful. There is a limit to the number of programs our staff can adequately support. In the field, we have addressed the problem with our new Area Training and Support Operations (ATSO) which provides groups of specialist in major areas to answer questions and provide optional consulting services. But there are still limits. So through Express Order, support is furnished by the folks who know the system best, the authors or publishers. We are actively expanding that program. And we are getting demonstration disks in Computer Centers for as many EOS offerings as we can.
Tandy and Radio Shack's overall direction and goal is to provide the best value available in hardware and software solutions and to back them up with clearly superior service and support. I think we are well positioned with the best, most complete line of PCs in the industry. There is no question that our ATSOs and Business Products Service Centers (providing faster service and often even while-you-wait walk-in service), are solving the industry-wide support problems that the competition is still only talking about. We are serious about computers, and we are absolutely long-term players. We intend to be around after the "shakeout" to take care of our present and future customers.