The Absent Revolution
Even the most noble of policies is subject to reality.
by Mike Donahue
Mike Donahue, a 20-year-old student living in Vermont, considers himself a "Vintage Atarian," having been obsessed with Atari for nearly six years. Currently, he uses a monochrome 1040ST and a Hewlett-Packard LaserJet Series II to run a small typesetter and graphic design firm. He welcomes reactions to the article and can be contacted through ST-Log Magazine.
He must be a miracle worker. Nearly four years ago, Jack Tramiel, the founder of Commodore, purchased Atari, Warner Communications' "problem child," and borrowed from Warner the $240 million needed to do it. Then in a flurry of activity he emancipated the bloated Atari from all its escesses and extravagances, fired thousands of employees worldwide, consolidated the operations of the 40-building Silicon Valley headquarters into a single two-story building and concentrated all manufacturing in one Taiwan facility. He trimmed Atari to a mere skeleton of its former self, enabling it to weather even the most destructive of financial storms.
But after giving Atari a new lease on life, Tramiel had a rude awakening: The marketplace was vastly different from what he was used to at Commodore. The impact of low price in the low-end computer marketplace was waning, a fact made clear by the very poor sales of the new $89 Atari 65XE home computer. Outside of a price war, Tramiel is like a fish out of water. The name of the game had become marketing superiority, a game which he deplores.
He looks disdainfully upon companies like IBM and Apple that succeed more through image and advertising than through the merits of their products. "You can't compute with image; you have to compute with a computer," he is fond of saying.
But even the most noble of policies is subject to reality, and Tramiel's bona-fide methods are becoming increasingly less effective as consumers respond more and more to demagogic advertising. Few Atari enthusiasts would deny that in terms of price and technological superiority, the Atari ST is the best personal computer on the market today. For a computer to offer the same technology as the Apple Macintosh at less than half the price is astounding. But to include in the same price color, standard input/output ports, a built-in hard-disk port, and higher resolution graphics, is revolutionary. So, where's the revolution?
The answer lies in the fact that never before has marketing had the profound importance that it has in this decade. In today's marketplace, the proliferation of cutthroat competitors has made it most difficult to sell a superior product unless it is backed by an armada of the most clever and calculated marketing strategies around. With this fact emerging, it can be said that the need to design a clearly superior product stands in the shadow of the need to develop preeminent marketing strategies. Some firms demonstrate such marketing prowess that they can even make a best seller from a product of inferior technology. (Right, IBM?)
Yet, Atari is laboring under the misapprehension that if it simply provides the technologically best product in its class it will impose it on the marketplace. This antiquated "better mousetrap" philosophy no longer holds true in the contemporary American marketplace. If Atari honestly believes the ST is a better product than the Macintosh, it must find it puzzling that the Mac outsells the ST many times over. Apple peddles a cool 60,000 Macintoshes per month. The Atari St's success has been hampered not by technological inferiority, but lackluster marketing.
What's in a name?
At the time of Jack Tramiel's purchase of Atari, many argued that having discarded so much of the company's technological resources, he had essentially paid $240 million for intangible items: the Atari name and symbol. While this is nothing new to the history of business, which is rife with events in which million-dollar transactions involved merely a name or logo (Victor Kiam paid $25 million for little more than the Remington name), this instance stands out. To many, Atari is still thought of as some corporate giant that has enormous strength backing each product. "Atari" is a relatively old name that is in the heads of millions of people all over the world and has possibly more recognition than "Compaq" or "Tandy."
Because Tramiel realized that a start-up computer company would have little chance succeeding in the ferociously competitive marketplace without name recognition, Atari was of prime value to him. But although name recognition is an assessable commodity, Atari's may be the wrong kind for the purposes of Tramiel and sons. The perception as a game company is the single biggest problem facing the company, eclipsing its numerous accomplishments.
The Atari name stands as a roadblock to the lucrative business market. And name problems can't even be eluded in the area where Atari products are the most well received: the music industry. For as the May '87 issue of ST-Log revealed, many professional musicians cover up the nameplates with gaffer's tape before bringing their Atari computers to the studio.
Ironically, it was reported in Infoworld that Atari was once attempting to garner a defense contract for its upcoming 32-bit computer. Absurd thoughts come to mind when trying to imagine what the outcome might have been if they had succeeded. A startling Washington Post headline may have read "U.S. Defense Uses Atari Computer!" And Soviet leader Mikhail Gorbachev might be quoted as saying, "I sincerely hope they aren't using them in their missile silos."
Even in the education market, Atari's name may act as a hindrance. One can imagine that if Atari computers began cropping up in schools, angry PTA members might protest, "I was appalled to learn that our children are using Ataris in the classroom!"
Setting aside the voluminous blunders, one has to admit that the performance of Warner's Atari, Inc. in creating an image of the No. 1 video-game company was irreproachable. Little did Jack Tramiel know that Atari was an inextricable part of an unsavory package deal: With ownership of the company came the onus of undoing what Warner's Atari did so well during the video-game craze. The effects of a successful marketing campaign can last indefinitely and thus, the marketing successes of Atari, Inc. haunt the new Atari Corp. today as it emphasizes computer products. Perhaps many a potential Atari computer sale fizzled when the salesperson's sermon about the superior features was drowned out by the "Have you played Atari today?" jingle playing incessantly in the prospective customer's head.
Indeed, when the company first changed hands, its newly recruited executives expressed a strong desire to alter Atari's image. Sigmund Hartmann, newly assigned head of software, acknowledged in a Compute! interview that the old Atari sought to be recognized mainly as a video-game company. "We definitely want to change that," he said. The new emphasis was to be recognized as a computer firm. But its reasoning seems somewhat paradoxical when the company laments its video-game image while it continues to sell video games.
Atari's argument is that it seeks to capitalize on the fad's reappearance and then break camp when it withers. However, the expense of milking this "cash cow" today is the furtherance of irreparable damage to Atari's image, and the limiting of the company's future as demand continues to circumvent low-end computer markets in favor of vertical markets.
Retired U.S. Navy Rear Admiral Grace Hopper, known as computing's "first lady," once illustrated the power of a name quite well. In an Information Week magazine interview, Hopper said, when discussing today's computer power in relation to the past, "We never should have called them microcomputers. Because... you can't make anybody believe that they're more powerful than the mainframes were a couple of years ago." As someone who understands the importance of names, Hopper might agree that Atari's is a hindrance even though the company sells computers far more powerful than the school-bus-sized Mark I mainframe she once used in the Navy.
Atari has excellent products. Though not a panacea for all its perplexities, a new image could help Atari gain entrance to many important markets.
All or nothing
An accepted truism among modern marketers is that it is nearly impossible to unseat a champion from the No. 1 position. (Pepsi or Burger King will attest to this.) Given this, an historic event must have just occurred because a No. 1 slot was recently usurped by Nintendo, now the leader in video-games. Atari has become No. 2, followed by the No. 3 Sega. So, it would appear Atari went only halfway in its obstinate pursuit of the resurrected fad, making itself susceptible to a Nintendo coup. Those Japanese who Tramiel is so deathly afraid of outwitted him with technological innovation. (Who would have thought a video-game machine could be equipped with a moving robot?)
It would be in Atari's interest to have a binary position on the video-game market: in or out, on or off, all or nothing. If the video-game arena is the company's chosen domain, it should try vigorously to reclaim its leadership position there. But if the company waits to occupy computer territory, the "nothing" approach would have a far healthier effect on the Atari name. The company has instead opted for the "have cake and eat it too" approach, expecting to dispel its video-game image in the midst of selling video games. The only feasible way for Atari to capitalize on the boom without fueling the video-game connotations is to sell the machines through a subsidiary with a different brand name. If Atari were to select and vigorously promote an imaginative new name, it could pursue the video-game market with unbridled voracity while sheltering its name from further injury.
It would seem like a waste of the Atari name to start completely from scratch in this market with a name void of such recognition. Yet who but the most diehard arcadegoer had heard of Nintendo or Sega? In spite of this vexing problem, Nintendo managed to become the leader in the video-game market, and Sega was able to establish a stronghold.
The equity in the Atari name is obsolete if the market doesn't exist tomorrow. As the video-game fad makes its small, unspectacular comeback, there is no guarantee that it won't deflate again, possibly to extinction. Perhaps the present state of this ephemeral fad can be likened to Halley's comet's second pass through the solar system before it blasts into oblivion.
The cancer that killed the video-game spread to the home computer as well. Just years ago, Timex was able to peddle oceans of its $100 Timex Sinclair, a desktop calculator-size computer with a 2K memory, rudimentary black-and-white graphics, a flat membrane keyboard, and almost no software. Somewhat indicative of the vitality of the present market, the $89 Atari 65XE computer with a 64K memory, 256 color graphics, full-stroke keyboard, and 2,585 pieces of software is on the verge of being discontinued due to disappointing sales.
Apparently, the home computer, like the video games, was exemplary of computer technology which, by being used for amusement, was turned into a fad item. After curiosity was appeased, the home computer lost its purpose. A computer is a serious tool, just like a hammer. A hammer isn't bought for amusement; it has a purpose, a function. But alas, it's almost as if the home computer bellows, "Give me a purpose or give me death!"
A Chain Store Age trade magazine survey revealed that 76.7% of shoppers did not know what they would do with a home computer if they bought one. Sure, a home computer can balance a checkbook, but automating such a simple task as this for novelty's sake can only overcomplicate and slow the process. A home computer can't make toast, can't clean the rug, can't give you a really close shave, and therefore, a home can survive without one. Maybe all those millions of home computers were purchased solely for game-playing purposes, making them slightly more esteemed video games susceptible to the fad's expiration.
Today, the breadth of home-computer buyer types has sharply narrowed, leaving but a rare species called the hobbyist. Still, Atari maintains that the home computer market is alive and kicking. The company gauges the market's viability by the excitement displayed at Atari enthusiast fairs. By the conventions of Atari's logic, one would measure America's current interest in Star Trek by the level of enthusiasm at a Star Trek convention.
Word of life
It appears that the only segments of the home market that have truly survived are word processing and education. Even the much-touted "home appliance control" market hasn't inspired much more than a yawn. But the existence of the low-end word-processing market has prompted the creation of the $649 Magnavox Videowriter and similar specialized word-processing machines. Having done their marketing-research home-work, the makers of these machines have discovered the demand for a computer dedicated solely to word processing.
While these machines seem like wastes of money to the computer-wise, Their beauty lies in their simplicity: They only do word processing and appeal to the nontechnical consumer who is confused and intimidated by the diversity of functions of a home computer.
With the proper arrangement of peripherals, including a 1027 letter quality printer, the Atari 130XE computer could easily be sold as a word-processing machine. Just recently, Atari found it necessary to sell another computer under a different guise: the new $150 XE video game which is technically identical to Atari's $89 65XE computer. Similar ingenuity can be applied to seize a sizable portion of the low-end word-processing market.
At the realistic price point of $600 for an Atari computer-cum-word processor, Atari could immediately undercut the competition—something Jack Tramiel is notorious for. Moreover, with a 1027 letter-quality printer Atari's word processor would have an obvious advantage over the others that, with the exception of expensive models from Video and Brother, have dot-matrix printers.
One Atari reseller has already spotted the new trend: in magazine ads, JS&A (heralding the "Products That Think" slogan) portrays the Atari 130XE as a space-age typewriter that will forever change the face of typing. Apparently, "home computer" just doesn't cut it among consumers any longer. At least they know what they'll use a space-age typewriter for.
A lion's share of the education market—60 %—belongs to Apple. Following Apple is Tandy, with impressive sales of its IBM-compatible Tandy 1000 to educational institutions. And IBM is making another go at this market—the first being with its failed PCjr, a disappointment by IBM-standards—with a somewhat impressive networking PS/2 model 25. Atari would be forced up against the ropes if it tried to claim a share of this market through conventional means.
But innovation transcends even the biggest of marketing dilemmas, allowing the smallest of companies to join the higher ranks without the necessary marketing muscle. Innovation—not superior marketing—allowed Nintendo to become the No. 1 video-game maker. Offering schools something innovative, something that can't be found on competitors' machines, may be Atari's only ticket to schools.
To expect Atari to whip up a technical innovation overnight is a bit much. But such expectations are unnecessary, as Atari has such a breakthrough already in its possession. For well over two years it has had a working CD-ROM (Compact-Disk ROM) drive and the necessary system software under wraps. Although many large firms are privy to the technology, the CD-ROM has yet to be unleashed in droves. It is probably not a consumer item—at least not at its current price—but in schools and other institutions, it could revolutionize research methodology due to its 550-megabyte storage capacity. Elementary schoolchildren could more adequately tap the endless resources of an encyclopedia. The optical drive could even escort Atari into the public library.
But while schools and institutions could pay for the CD-ROM painlessly, Jack Tramiel refuses to disseminate this technology until it meets his price destination. How considerate. But while Tramiel engages Atari in a waiting game, Apple or IBM is free to introduce the CD-ROM, thereby quickly establishing either as the first and foremost source of this technology.
A company is only recognized as a pioneer or innovator if it is first to bring the innovative product to market. And although a unique relationship between Activenture and Atari wrought the first CD-ROM solution, Apple may very well swipe the credit by simply introducing the CD-ROM first. Worse, if Apple does so, it will cement the monopoly it already has on the education market, and its position will become virtually tamper-proof. For Atari, being first with a CD-ROM drive would enable it to leapfrog the murderous competition. In short, the CD-ROM is the key to permeating the barriers that have prevented Atari from having a stake in the education market.
A brilliant aspect of the Atari ST's design was the inclusion of MIDI (Musical Instrument Digital Interface) ports as standard equipment. Virtually every synthesizer on the market has MIDI ports. And until recently, while countless MIDI synthesizers existed, the missing link—the computer to conduct the peripherals—had yet to appear. Now, with the exception of the obscure Yamaha CX5M, the Atari ST is the only MIDI computer on the market.
Interestingly, an Amiga, IBM PC, and even a Macintosh can be configured with MIDI ports. Apparently a computer with a feature that exists as standard equipment has the advantage of appearing somehow more suited to the appropriate task. So, by virtue of being MIDI equipped, the Atari ST has the immediate upper hand in the music market. The ST has, in fact, been greeted with excitement by musicians.
Yet the computer was discovered not through advertising, but through the desperate quest by musicians for a MIDI computer. All ST advertising that targets musicians has been done in software ads by Hybrid Arts, a MIDI software firm. Atari has yet to advertise autonomously. While it may seem convenient and economical to be able to virtually ignore a market and still enjoy success there, the full capacity for success can't be realized without active pursuit. And if this market's potential were to attract any noteworthy competition, Atari might not be able to hold its ground after failing to minimize danger by establishing an identity as the foremost MIDI computer supplier.
In the new age of marketing, called the "positioning era" by Trout & Ries, Inc., a New York advertising firm, the most secure place for a company is the No. 1 position in a given market—even a niche. Yet Atari is adamantly opposed to pursuing niche markets on the belief that a company becomes trapped in such markets and loses its ability to compete effectively in broader ones. Atari's "claustrophobia" is unwarranted—even IBM captures niche markets.
An uncontested niche poses an opportunity to claim a very large piece of a small pie. But in the case of the MIDI market, the pie might not be all that small. According to the New York Times, sales of computers and software for MIDI uses recently topped $500 million. So the MIDI niche may be booming bigger than the video-game market. Perhaps sadder than a company's failure to create new opportunities for itself is its failure to exploit opportunities which already exist. MIDI is one such opportunity.
It's comforting to note that Atari doesn't have a corner on the market for image problems. Tandy is currently hog-tied by a home computer/Radio Shack image as it tries—so far unsuccessfully—to crack the business market. And Apple, of all companies, has found gaining space on the corporate desktop to be a Herculean task. It seems that Apple computers were recognized for their place in homes and schools, not businesses. An attempt to make the Apple name denote "business" in addition to "home" would be futile. The public will remember Apple's original identity for a long time to come.
Before marketing whiz John Sculley's arrival, Apple had been hammering away, trying to penetrate the business market with the Macintosh computer. Sculley then managed to help the Macintosh overcome the ill effects of Apple's unbecoming image. The word "Apple" is noticeably absent from current Macintosh commercials. The concept being sold in these ads is that of "Macintosh," a word without preconceptions.
Which does a Crest commercial sell: the name Crest or its maker's name, Proctor & Gamble? Is a Sanka commercial selling the name Sanka or General Foods Corp. the name of its maker? The same techique is being employed to disassociate Apple from Macintosh.
Meanwhile, Apple's image is profiting from the Macintosh (an interesting contrast to the classic situation). The results have been phenomenal: Apple is now the No. 2 personal computer maker after IBM (with help from desktop publishing). Even the IBM clone makers follow Apple, which became No. 2 two without any help from IBM compatibility.
While it has not yet attained notoriety as a computer company, Atari is making overtures to corporations. Software president Sigmund Hartmann has been assigned the laborious task of negotiating sales of Atari STs to Fortune 1000 companies. Perhaps to Mr. Hartmann's chagrin, many a nearly consummated sale has dissolved when an executive with buying power caught a glimpse of an Atari video game in a Zayre flyer (to say nothing of a Toys ‘R’ Us flyer).
But alas, Jack Tramiel isn't truly comfortable selling to the business sector. He is most at home, at home. In his forward to an ST Logo tutorial, he intimated his devotion to making the highest possible technology available to the average home by means of vigorous cost reduction. There's almost an air of benevolence about Mr. Tramiel as he pursues this noble obsession.
While it's not fun to critique someone's raison d'etre, it's hard not to wonder about the future. If Tramiel continues on his present course, will he eventually bring the price of a Cray supercomputer to within the family budget? A tantalizing, albeit sarcastic thought to ponder until better reasoning provokes a pertinent query: How many homes are in demand of the power of a Cray supercomputer?
No matter how good a bargain is, families won't buy something they can't determine a use for. Businesses, on the other hand, will always crave the most advanced computer technology and can use it constructively. Therefore, unlike the home market, the future existence of the business market is a certainty. With the home market's loss of viability, Atari's acceptance into the office is not a mere ideal, but a necessity for survival. Atari's future could hinge on whether it can establish a reputation as a computer maker today.
The business-computer market is driven more by need than by want. Unlike consumers, businesspeople can ill afford the luxury of being fickle. Ask a typical businessman to imagine a day in which all the office's personal computers were broken down. He will, undoubtedly, paint a grim picture that makes their necessity more apparent. Businesses depend on computers. The need for business PCs is as lasting as the need for automobiles.
Naturally, customer satisfaction is pivotal to success. And indeed, Jack Tramiel believes that buyer satisfaction today ensures repeat customers in the future. In a 1985 interview with ANALOG Computing, he said, "Intelligent companies are going after the long term—not to cheat the customer, not to be greedy."
But here surfaces a pertinent issue. Atari has often been attacked for its poor service and repair provisions. Customer satisfaction certainly is affected by the facility of getting the computer fixed when necessary. This is especially true in a business setting, where productivity grinds to a halt when computers break down. Under Jack Tramiel, Commodore was notorious for its watery commitment to servicing its computers. Apparently, when Tramiel said, "Atari will become no different from the old Commodore," he intended to be taken literally.
Long-term strategy is vitally important to future growth. But a dangerous assumption can be made when a trend is misread. In a recent Infoworld article, Tandy's Graham Beachum, then president of Computer Merchandising, outlined Tandy's strategy for penetrating the business market. Beachum, who recently defected to Dell Computer, claimed that a buyer of a Tandy home computer will, without doubt, return to Tandy if the need for an office computer arises.
His logic is invalidated by consumer behavior. The move from a home computer to a business computer is not seamless, as the consumer mind seems to draw a clear distinction between the two types. When a home computer owner decides to "get serious" by investing in a business computer, he'll turn to a different company, one that is indigenous to the business milieu.
IBM made the opposite, albeit equally fatal assumption with its PCjr home computer. While it accounted for only 1% of total revenues, the PCjr might sell a few mainframe computers a decade or so down the road, thought IBM. But the hypothesis proved untestable as poor junior never really made it into the home. Why? Because, as acknowledged by Al Ries and Jack Trout in their book Marketing Warfare (McGraw-Hill, 1986) IBM is renowned not for its place in the home, but in the office. Apple and Commodore laid claim to the home.
Atari, under a similar illusion, believes that all the youngsters who grew up on its video games are now mature enough to want computers and will stick with Atari. Once again, the fly in the ointment is Atari Warner's splendid job of establishing Atari as the first name in videogames.
"Atari" actually became synonymous with "videogame." This potentially desirable effect occurs when a product assumes its closely associated brand name: "Xerox" became a surrogate for "photocopy"; "Jell-O" substituted for "gelatin"; "Band-Aid" for "plastic bandage"; "Kleenex" for "tissues"; "Vaseline" for "petroleum jelly." Here the brand name becomes generic.
During the video-game craze, kids began to refer to video-game machines in general as "Ataris." A distinction wasn't even made in reference to video-game units of other manufacturers! While this generic brand name may have been Atari's richest asset during the heyday of the video-game craze, it haunts the company today as it strives to sell personal computers.
The logic that says that kids will graduate from Atari video games to Atari computers is flawed. They will graduate from "Ataris" to computers. They'll turn to a totally different company to provide a computer than they turned to for video games. Again, until the Atari's name denotes computers, the company will continue to have little impact on the computer industry.
An equally feeble belief Atari clings tenaciously to is that a new generation of kids is emerging that hasn't yet been exposed to video games, and will foster a new craze reminiscent of 1982. But, unfortunately, this false hope has about as much validity as one that insists that today's Americans will soon be listening to Rossini because they are of a new generation that hasn't yet experienced classical music. Times change.
Foot in the door
Given that the demand for business computers shall exist as long as businesses exist, Atari does have reason to set its sights on the office. To get there will take exceptional products, exceptional marketing strategies, and most importantly, a reputation as a computer maker. Atari has one essential ingredient: exceptional products.
The new IBM compatible Atari PC, if properly marketed, might help pry open the corporate door. Hopefully, Atari views this product as a part of a strategy, not just another way to make a fast buck. If IBM compatibility gets Atari on the corporate purchase order, it may assist in the ushering in of a new identity for the company.
But Atari stumbled when it decided the Atari PC would be sold through mass-market channels. The company should follow the paradigm of firms like Apple, IBM, Zenith, Compaq, and others who know that computers simply don't belong in the mass market where they are cheapened by the environment and are considered inferior to computers sold in specialty stores.
There exists the unfounded belief that the $680 Hyundai mass-market IBM PC compatible is selling like insect repellent in a nudist colony. "Like air conditioners in Alaska" is a more befitting analogy because as a recent Business Week article, "Hyundai Computers Are Stuck in the Slow Lane," reveals, the case is very different. While a slew of them made their way through the distribution channels to retailers, few made it off the shelves. The article refers expressly to mass marketing as the malefactor in the Hyundai PC's failure and notes that "Customers found computers stacked alongside microwave ovens with no trained sales help." An Advertising Age article described the situation similarly, noting that one large chain has already dropped the Blue Chip due to slow sales.
The specialty store is the personal computer's most suitable habitat. There, personal selling can occur, and if an advertisement hasn't enlightened or persuaded a consumer enough, a knowledgeable salesperson can.
Is the Atari ST destined to have only a cult following, or is it merely a sleeping beauty that has yet to awaken to the world? Many attribute the computer's relative anonymity to Atari's failure to get the word out through heavy promotion. But the unprecedented competitive climate of today's American marketplace makes effective advertising a gargantuan feat, for the barrage of advertised messages comprises an indecipherable noise. If the message isn't potent enough, it only adds to the noise.
So it is no longer enough to simply "go tell it on the mountain." Such conditions amplify the need to choose product names that are highly distinctive. Apple chooses names like Unidisk, LaserWriter, Macintosh, Imagewriter LQ, etc. Atari, on the other hand, selects names like XM301, SF314, SM804, XF551, SM1224, 1040ST, SF354, etc. This cryptic nomenclature makes effective camouflage, but is counterproductive to the cause of fighting product anonymity. It also goes against the grain of the intuitive user interface which was designed to make the computer more appealing to the "non-techie." "Computers for the masses, not the classes," Jack Tramiel always says.
Moreover, people are more inclined to discuss products whose names they can remember. Univac, Cray, Domain, VAX and Macintosh are names that have commanded attention in the computer industry. Even the name Amiga is more widely recognized than 520ST and 1040ST. The Amiga reportedly sells as well as the Atari STs, despite the vast difference in price.
Judging by the use of the name Mega for the new Atari computers, the trend may be changing. But while the use of this metric prefix could mark the beginning of a much-welcomed new style, the name is a bit too tacky and toyish sounding for the serious machine it represents. Mega sounds more like a new Hasbro Transformer toy than a $2,000 to $3,000 computer.
It's a shame that buyers often judge books by their covers, but with the plethora of computers on the market, realizing all distinctive features of all models is impossible. It has become far easier to judge a computer product by cursory examination of seemingly trivial aspects. Given this, the Mega ST with its tacky name may have begun life with an immediate handicap.
Interestingly, with the announcement of the Mega series ten months premature of the delivery date, Atari felt the symptoms of Osborne syndrome in the form of a drop in sales. Evidently, Atari didn't take a lesson from Adam Osborne's classic act of folly. When Osborne Computer hastily announced the Osborne 2 portable before the machine was ready, an acute drop in sales of the Osborne 1 sent the company right into the depths of Chapter 11 bankruptcy.
Publicity—the most cost-effective form of advertising—was apparently sought when Atari released pictures of its new Mega machines to the press shortly after the computers were announced. But unfortunately, the Mega was shown displaying a Neochrome picture of a cartoon-like robot, hardly reflecting the awesome power of a four-megabyte computer selling for $2,500.
Apple's photos of its new one-megabyte Macintosh II computer showed the machine displaying a fabulous ray-tracing demo in which the Apple logo was reflected in several chrome balls. A very similar demo, Shiny Bubbles, existed for the ST computers long before the appearance of the Apple demo. In fact, the two are so similar that one would swear that the Apple programmer had modeled the Mac II demo after Atari's. Now, due to the Apple demo's wide exposure, the opposite might be assumed.
Apollo also uses ray-tracing screens in ads to show off the power of its CAD workstations. Atari, on the other hand, rejected a ray-tracing demo of enormous potential in favor of a cartoon robot. In doing so, the company procured but one thing: very poor publicity. To appreciate the weight first impressions carry is to realize the detriment that may have been induced by Atari's photos.
Still, the Mega is a refined machine with many welcome additions, including a detached keyboard. It was IBM that trained the consumer to believe that only a computer with a detached keyboard could bask in the esteem of a true business machine. The two-piece computer was thought superior to the one-piece computer, notwithstanding all technical differences. The one-piece configuration had forever become the mark of a home computer.
Another factor contributing to computer product's image is visual impact. Ideally, a high-capacity hard-disk's visual appearance should cry out, "Power! Capacity!" But due to the colorful, tacky lettering, the Atari SH204 20-megabyte hard disk's visual appearance screams "Fisher-Price!" Fortunately, the new companion hard-disk to the Mega computer exhibits a marked improvement in visual impact.
The evolving quill
Sadly, Atari may never have such a unique opportunity as the one Apple had to unlock the door to the business world. Desktop publishing, which Apple merely stumbled upon, was the vehicle for getting a "foot in the door" of the corporate office.
At first, despite the Macintosh's dazzle, managers simply weren't given enough cause to switch from IBM. The IBM PC and compatibles could handle all the applications that the Mac could handle, and there was no reason to change, especially given that MS-DOS was the looming standard. Enter desktop publishing. Finally, there existed a function uncommon to the IBM PC and all other MS-DOS machines.
The Mac had become the only route to this new application. As a result, the corporate back door was pried ajar, and the Macs began scampering in.
Today, desktop publishing can be perfomed quite easily on an IBM PC or clone, but the Macintosh remains the leader in desktop publishing, having established itself there first.
A large portion of Apple's $2.4 billion in sales in fiscal 1987 came from the desktop publishing market, often discounted as a mere niche. Dataquest, a market research firm, believes that by 1990 desktop publishing will be a $4.9 billion industry.
Atari, though a little late, is vying for a piece of the action by introducing its own desktop publishing system. With pricing being by far the most prevalent form of competition, Atari will sell its two-megabyte Mega ST computer and laser printer package for a competitive $2999—about $2000 less than Apple gets for its laser printer alone. Because of Atari, the desktop publishing phenomenon may be felt more widely as it reaches those with tighter purse strings.
But consumers mustn't be given the impression that Atari's desktop publishing system is simply as good as Apple's for less money. Greater incentive is required to lure buyers away from the leader. Advertising for Atari's publishing system must be focused on features that are unique amidst other systems' features.
Better, weaknesses in the Macintosh should be exploited petulantly in Atari's advertising. Suitable ads should magnify the deficiencies of the Mac system that are corrected by the Atari desktop publishing system. (The ads could also employ a sly, but effective tactic by referring to the Macintosh as the Apple Macintosh, thus reopening the wounds Apple is healing disassociating Apple and Macintosh.) The most obvious and complained-about flaw of the Macintosh is its tiny screen. No trip back to the Atari drawing board is necessary because all ST models have screens that improve on the size of the Mac's.
Ironically, the Macintosh's strongest feature—graphics—becomes a weakness when compared to the Mega ST. The screen resolution of the Macintosh is 512 x 342 pixels. When compared to the ST's monochrome resolution of 640 x 400, the Mac's is shy of 128 x 58 pixels. Voila!—another Macintosh vulnerability is born. While Apple's ads tout the Mac's WYSIWYG (What You See Is What You Get, or the ability of the computer display to approximate the final printed document) ability, Atari's ads can justifiably claim that "the Mega computer is ‘WYSIWYGier’ than the Apple Macintosh."
As color separation becomes of more concern to desktop publishers (and perhaps becomes amended to the definition of WYSIWYG), the Mega ST will be ready with its built-in color capability and optional color monitor. Still another weakness is unearthed because the Macintosh was not designed to handle color.
In Macintosh weakness lies Mega strength. But the factors that constitute Macintosh vulnerability won't be in place very much longer. Ergo, opportunity knocks.
The difference is graphics
As noted earlier, contemporary marketing says that changing the consumer's initial view of a company is nearly impossible. So direct attempts to make Atari mean "business computers" overnight would be fruitless. Is this predicament hopeless?
Not entirely. What the consumer mind will acquiesce is something already known: Atari means "computer graphics." This broader notion is fully compatible with the public's view of Atari as a video-game company, yet it establishes that Atari makes computers. If Atari's advertising were to repeat this accepted message over and over, graphics may eventually become the primary connotation of Atari's name. And while earning a reputation as a computer firm, Atari would also be differentiating itself from its competitors.
Additionally, as computer applications become increasingly focused on graphics—as are computer-aided design and desktop publishing—Atari's name may actually be an asset. For the first time, Jack Tramiel's $240-million investment in the Atari name and symbol will have paid off nicely. "Atari: the difference is graphics."
The prophet speaketh
What does the future have in store for Atari, the 15-year-old enterprise that once employed Steven Jobs and Stephan Wozniak before the two founded Apple Computers? Newly elected senator Timothy Wirth of Colorado is labeled a typical "Atari Democrat," a person, Time magazine reports, "who urges growth and investment in high-technology industries."
Is the name used entirely with sarcasm here or is this a telling clue that Atari may be an icon for high technology? Does a peephole to Atari's future lie in the British post-punk band Sigue Sigue Sputnik's song "Atari Baby," about life in a future high-tech world? Or will time realize the prophecy of the movie Blade Runner? In this film set deep in the future, colossal city billboards everywhere displayed giant Atari ads as if the company had erupted into a monstrous, domineering corporate empire. Could this scenario be an emblem of Atari's future? No. At least not unless Atari ceases to mean video game.
More troubling still, back here in the days of Iran antics and Oliver North, Atari struggles against a deluge of opposing factors: A home-computer hysteria has abated following the videogame exodus; a business market is an intense battle of heavyweights like IBM, Apple and Compaq; a lucrative education market is dominated by the Apple-Tandy faction and may soon play host to IBM with its mighty resources, advertising capital and networking PS/2 model 25; a burgeoning desktop publishing market claimed largely by Apple is awash with IBM clone systems and will be further drained of its resources by IBM's upcoming PS/2 desktop publishing system.
So where does this leave Atari? Fortunately, the prospects are not entirely bleak for the company. Atari can be No. 1 in the MIDI market which it has entirely to itself. Many believe that today's computer game is won through software. With powerful, established software products like SBT Database Accounting Library, WordPerfect, dBMAN, Drafix CAD, DAC Easy Accounting, Microsoft Write and .Ready, Set, Go!, Atari has prolific fodder. This software must be exploited in Atari's ads, or its potential for selling STs will be wasted.
Yet tomorrow's computer game may be won differently. It may be won in networking, multitasking, internal expandability, connectivity, or brand-name partiality. And as the current competitive trend progresses, success will grow even more dependent upon marketing. If Atari is to outrun adversity and reach its outspoken goal of becoming a $1 billion operation by 1990 it better get busy, for it has a tremendous amount of work to do. The loss of Atari as a contender in the computer market would be tragic. Atari is the computer manufacturer with the most equitable cause of all: to give the buyer, whoever he may be, the best value for his money.