REACTIONS TO PULLOUT

Selling products for a computer which is no longer manufactured is, of course, quite a special problem. When TI initially pulled out of the market, Steve Ficklin, general manager of Computer Shows in Austin, Texas, says, It was probably not that much of a surprise, based on their marketing. I didn’t know how long they could stay in there losing money. It probably was a little bit of a relief that we knew what was happening.” Ficklin says he is surprised that more people have not made software avilable - that TI hasn’t made more popular software available, such as the TI-Writer. A lot of TIs are being unused because the software and hardware are not available.”

Don McCutcheon, owner of the Home Computer Center in St. Petersburg, Florida, says his reaction was “utter astonishment." He adds, “We were expecting it. Being a dealer I knew what was going on. But I still was astonished because they have one of the best computers in the market in the price range and they couldn’t make a go of it due to poor management. “I hate to see it go because it’s such a good little computer. But it (the pullout) helped my business tremendously.”

Mary Jane Burger, an owner of RAM Enterprises (in this case, RAM stands for Richard And Mary) in Vermilion, Ohio, says that initially “we definitely felt concerned, but we took a wait-and-see attitude and were hopeful someone would pick up and continue the TI or at least the accessories and so forth.” Now, she says, “I know that we’re definitely encouraged.” She says that “Cor-Comp and others are coming out with peripherals. This is a very hopeful sign. We felt a responsiblity to our own customers and a concern that we couldn’t get software. That seems a little better now" Craig Reitan, president of Unisource Electronics, headquartered in Lubbock, Texas, says, “We had mixed reactions. Almost all our business is TI. We have several phases: a couple of stores and mail order.” He says that “after the intial panic” they realized that two million TI computers were out there. It’s an opportunity for a mail-order business like us.,, He says Unisource is in the process of doing ‘a brand-new catalog with the things available, things being phased out and things available in the future.” Unisource markets more than 1,000 products for the TI, he notes. The pullout means that ‘we have to work harder,” he notes. “We’re having third-party authors work on software alternatives,” he says. “Important pieces of software we’ll manufacture ourselves, if we have to, although that’s a business we’d rather not be in.”

Noting that TI stopped shipping software at the end of March, Reitan notes, Unisource purchased “about $1 million worth of software.” (Interviews for this article were conducted in mid-March.) Of this, “some titles will be gone in 45 days and some will last a year and a half,” he predicts tentatively.

Susan Smith, owner of Tree of Knowledge in Reading, Pennsylvania, says her reaction was “just terror. It was awful. I figured that was the end. I’d never sell another TI computer.” Now, she says, “I think they knew what there were doing. I didn’t give them enough credit. They did it at the right time. I had the best Christmas market ever and I’m getting the aftermarket now with the software and the peripherals.” Bob DeMars of Specialist In in Minnetonka, Minnesota, says he was “very surprised that they pulled out. “It doesn’t bother us,” he adds. “Business is good. It’s never been better.”

THIRD PARTIES

“I think a lot of third parties are creating software,” DeMars says. “We’re creating software.” He describes a program for learning BASIC they have that is “interactive— not just turning the pages of a manual.” With this program, the user is given a problem and two chances to respond. If he gives the wrong response twice in a row, the program tells him the answer and takes him back to the material the problem covers for a review. Then he is given a similar problem on the same material. Specialist In is also providing classes in BASIC, Extended BASIC, assembly language, Microsoft Multi- plan, TI-Writer, Forth and printers. Printers are “very difficult” with commands for such items as bold- facing, for instance, DeMars says. He says Specialist In markets 50 different models of printers and has had a program written for each. He says they evaluate the software they sell “to be sure it is quality software.” Specialist In sells to customers all over the world, he says. “We don’t advertise a lot,” he says. “People find out by word of mouth.” Ficklin says he hasn’t seen much third-party software so far. “I hear a lot but haven’t seen much so far,” he says. “Frisco (Frisco Electronics, a high-volume electronics chain) has Atarisoft. That’s games. Games get old real fast.” He notes that Computer Shows is a dealer for Scott Foresman, which has discontinued its TI line. “Initially, I though a lot of people would write stuff,” he says. “I’m beginning to have my doubts now, which is too bad.” “As far as what’s available for peopple who already have TI’s, there’s a lot of new stuff coming out,” McCutcheon says. “The limit on computers is going to limit what’s available, because there’s no new computers coming out.” He notes that “TI tried their best to restrict stuff” so that they would be the software source. “We’re finding a lot of new stuff out there,” he says.

“We’ve always had problems getting what people want at the time,” Burger says. “It’s still a problem.” She notes that it is harder to obtain peripherals than software. It always seemed Texas Instruments put out a carrot a long time before it was ready and that’s what we’re facing now, too,” she says. “I’m not sure what they’re going to do with their chips and their modute,” she says. “The best quality software has always been in the module.” In regard to third-party manufacturers, she says, “they’re more encouraged. There’s more benefit for them to be in the market.” Reitan says, “We’re starting to get things that have been needed for a long time, but weren’t made because people expected TI to manufacture them.” He notes, “There are obviously those who got disenchanted and dropped out, but there are those who are building up their system. Business is better than it’s ever been.” He notes that Unisource “couldn’t support” the initial period of “panic buying” because of a lack of enough WATS lines. Smith says, “I’m hoping TI will encourage third parties to do even more than they did before. One of the problems with TI was they wouldn’t let anybody else make software.” Smith says she specializes in TI products. “Some people, as soon as they sell out what they have for TI, are pulling out,” she says. “I’m getting more and more third-party business. We’re the center for TI in Reading, and even the big department stores are sending customers to me.

MARKETING CHANGES?

“I never had a whole lot of money to advertise in the first place,” Smith says. “Had I been in the thick of advertising I probably would have made some changes.” “We rent a lot of their software now,” Ficklin says of his TI inventory. “We kept enough in stock so we could rent it. We’re selling some that we have enough of.” He notes that if Cor-Comp comes out with its planned Phoenix, Computer Shows will sell software, but if not, “we’ll stay with rented.” “I advertise less locally and do more advertising through my list of names,” McCutcheon says. “I have a good-sized list of names of people who own a TI. Every time a new product comes out, I want to deal with people who already have computers.” “At this point we haven’t changed it too much,” Burger says of her business. “We’re waiting to see what happens with Cor-Comp and the Phoenix. The TI market is still strong. We probably will diversify,” she says. “I don’t know that we’ve changed our marketing as much as we’ve beefed up our warehousing and investment in inventory,” Reitan says. “Our catalog has to be republished more frequently because the market is changing more.”

FUTURE PROSPECTS

“We’re all hopeful for the Phoenix,” Reitan comments. “We are CorComp distributors and looking forward to that product as well as our other products.” He also refers to “rumors that surrogate TI’s” we be manufactured. “We’ll serve the TI market as long as there is a TI market, whether that’s two years or 20 years,” he says. “Until the last customer rings our bell and says ‘We don’t want to buy anything,’ we’ll be here.” “I’m going to hang in as long as people want to buy things,” echoes Smith. “When it dwindles down, I’ll stop carrying TI.” DeMars predicts. “I expect that the TI will be back on the market under a new name—that somebody else will make it.” Ficklin says simply, “I don’t know right now.” He says that Computer Shows, whose “main thrust is educational” has expanded into some other lines of computers. ‘I expect some of the titles people are looking for are going to disappear,” McCutcheon says of future software sales. “There’ll be some third-party replacements but not exactly the same. We’ll lose some that are popular but not popular enough for a third party to pick up the rights to.” “I definitely feel there is a future for home computers and it is a strong future’ Burger says, ‘and though l’m not sure which direction we want to take I’m sure there will be a successful future out there.”

THE TI MARKET

As long as we have good products, good prices and good availability, we’ll get our our reward, which is orders,” Reitan says. He notes that Unisource has diversified in its retail stores, but not in its mail-order business. ‘It is an awfully difficult business,” he says. ‘There is not a good product in the home market compared to TI. We do carry Commodore and we do carry software for other computers.” ‘Saturday I could hardly have time to breathe, there were so many in here,” Smith says. ‘I have a very small store. TI’s paying my rent. A lot of people are coming in asking for disk drives. Them I’m having trouble getting. A lot of my distributors are pulling out.” She notes, ‘It costs a lot of money to diversify. I tell people I can get them Commodore stuff if they want it. I can get them Atari stuff if they want it. But I’m not stocking it. Eventually, I’ll have to.”

DeMars says that Specialist In is “constantly getting new customers.” They are diversifying, “but we’d planned to do that anyway.” He adds, “TI is our favorite company. You can’t find a better company to deal with.” McCuteheon says that ‘one thing that’s a little rough right now” is that items from third parties are “not completely on the market” and the expansion market has slowed down. “As fast as I can get software in, I sell it,” he says, noting that he has got in ‘about 25 new titles in the last 60 days from TI” through wholesalers.

YOU ARE WHAT YOU COMPUTE

‘Most of the people we get calls on for Atari want games,” McCutcheon comments. ‘The same for the Commodore. Most of the calls for the TI are for education and small business. There’s still a difference in the way the market reacts.” He says it’s hard to say whether TI owners spend more or less on their computers than owners of other brands. “If we had the peripheral equipment I’d say more,” he says. “A lot of people are not even thinking of switching over.” “From our experience, our research shows that the average buyer will spend 20 percent more on software and peripherals than on the computer,” says Reitan. However, the TI user spends a higher percentage on these items because of the low base price of the computer.

In Lubbock—the site of a Texas Instruments plant—’ ‘95 percent of our customers are fierce and loyal to the TI,” he says. He notes that with the TI “adding 100 percent of the peripherals it’s still a heck of a value” compared, for example, to the IBM PC-Junior. Smith thinks that TI users spend as much on their systems as users of other computers “in the long run. Maybe they’re not as fast to do it.” She speculates that TI may have got out because of not having the “patience to wait for the aftermarket.” She notes that Tree of Knowledge is located in the center of the downtown business district. “We’re not seeing the people who go out to K-Mart,” she says.

DeMars says customers are “all in about the same market. Some customers buy the computer because it’s inexpensive and don’t plan to expand. Others spend $1,000. They still get a good deal. Some expand very slowly.” He notes that “the typical Atari consumer is out for a game machine. The Commodore is more difficult to use for a beginner than a TI. Most people are impressed with the quality of software, educational and home stuff, for the TI. We sell it to a lot of business people, too.” “The majority of the TI market are probably computer illiterates now,” Ficklin says. “Six months again that wasn’t the case. The recent buyers after the price cuts expected to get a fully functional computer without having to program it or buy anything for data storage when they plugged it in after Christmas. This isn’t anyone’s fault, just the general state of knowledge about computers. Now probably most of them are in the closet.”

HOW LONG TI?

The length for viability of the TI market, Ficklin says, “depends on what happens in the next two months. If CorComp comes out with their stuff and if someone comes out with some viable software, it’s 1 1/2 to 2 years. If not—you’re probably looking at it now. As far as most people are concerned, TI is a dead subject. Which is really too bad, because the computer is such a good machine.” “People who’ve got them won’t sell them,” McCutcheon notes. He feels that the viability of the TI market depends on “if someone comes out with a comparable computer—not a Commodore or Atari.” “Two years, maybe,” speculates Burger. “I think a lot depends on other companies.

Most of the people who own TIs are really pleased with the computer and the features. If a computer such as the Phoenix came out that was compatible there is a market which is loyal and would upgrade. For the T199/4A itself, I don’t know.” “I don’t know how to call that one, says Reitan. “Opinions range from six months on out.” He says it may be another several years “assuming a namesake never comes out.” He continues, “I think we know enough to invest a lot. Past the near term, which I look at as a year, I don’t know.” “I know there are a lot of machines out there,” Smith says. “At least another year. maybe more. “If it comes back with another supplier, a long time,” DeMars says. “If somebody doesn’t take it over, I think another five to seven years.”

RETAILERS’ PROBLEMS

Ficklin sees his biggest problem as a retailer as answering his customers’ questions. Though he knows that the TI is a good computer, he says, he doesn’t know whether any individual should buy a computer or not, or whether they should get more software or hardware. McCutcheon says the biggest problem is that “suddenly there’ll be a rush on something. Extended BASIC— you’ll get 10 in a day and they’ll be gone. Peripherals—people want entire expansion systems and you can’t get them.”

He also cites frustration with not knowing what prices will be. Reitan says the biggest problems “continue to be TI. They are difficult to do business with, though their withdrawal from the market has been honorable to dealers—amazingly so in that they haven’t dumped a huge quantity of software on the market at nothing, leaving dealers with huge inventories of worthless software.” Reitan also cited the difficulties of predicting what customers’ needs will be and thereby running short of inventory. Smith said that “trying to get the product” is a difficulty. She cited TI- Writer. Editor/Assembler, Pascal, Extended BASIC and Terminal Emulator II as being hard to find. CHAIN STORE COMPETITION DeMars says the biggest problem is “probably competing with the chain stores” who buy software in large volumes and sell it as loss leaders. However, since large stores such as Montgomery Ward and J.C. Penney have been phasing out TI products, the smaller operators have benefited. "In today’s market much of our business comes from the big stores sending people to us,” he says, citing Sears, Penney’s, Target and Dayton’s (a large chain in the Midwest). “I’m glad from that aspect. Our business has quadrupled.”

Smith also says she was unable to compete with the chains. “They were selling stuff below cost just to clear it out. I couldn’t compete with that,” she says.

Ficklin says that “small retailers couldn’t get them (TI consoles) when they phased out.” Reitan is philosophical at the “dumping” of some TI products. “Those things last a day or two. We urge our customers to take advantage of it, and we’re not too proud to do it ourselves,” he says.

He notes that a customer who saves money on a particular product by buying it at a department store may buy other products from Unisource, which has a larger selection of TI products than the chains. LB