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APRICOT’s 80386 MACHINES BUY IT A YEAR’s GRACE TO BUILD FOR LONG-TERM

Apricot Computers Plc, in the words of its chief executive Roger Foster, has stolen a substantial march on its competitors with the launch last week of its 80386-based Personalike – 13.45% faster than Compaq and quite a bit cheaper – and a multi-user system (CI No 620). Both are compatible with Apricot’s existing, IBM compatible, product range and fit in with its stated aim of ensuring that all its current line can be upgraded to new products soon after they become available. The new products will have no impact on Apricot’s current financial year which finishes on March 31. Roger Foster predicts, however, that in 1987-88, the 80386-based products will account for 30% of Apricot’s turnover. He is looking for 100 sales of the multi-user VX machine in the first 10 months but admits this could be a dramatic underestimate. While all the long-term question marks still hang heavy over Apricot, there is every reason to believe that the 80386 box buys the company a year’s grace in which to transform its prospects – a really big OEM contract for the new machine would be welcome, three would be delightful.

Nagging worries

Prospects for the new machine are extremely good – Compaq claims that its own new 80386-based Deskpro 386 is already accounting for 27% of its UK sales, so the market is definitely there. It’s a great pity that Apricot wasn’t able to get its own offering into the market before the end of last year: the 386 machine is important to Compaq’s future but it is vital to Apricot’s. In January, Apricot sold 2,100 machines of all types, and the 80286-based Xen-i should be breaking even on a month-by-month basis now. The nagging worries about the shape of its business is that most of its dealers sell mainly to small and medium-sized businesses – and those users are going to need more and more hand-holding as the products increase in complexity. The dealers have shown exceptional loyalty to Apricot, and that is definitely a plus – but are they good enough to sell increasingly complicated machines successfully? And is Apricot in any position to fill gaps that appear in its traditional market by moving onwards and upwards to really large users? It acknowledges that only about half of its dealers are sufficiently skilled to market the multi-user systems successfully – but it has no intention of going into competition with its dealers. Any company that competes in the IBM world runs the grave risk of having the elephant roll over and squash it, and there is no question that IBM is preparing some fairly sticky flypaper for the clonemakers in its next generation of Personal Computers – but IBM’s command of its own market has weakened so much in the past 18 months that it has to pull an extraordinarily clever trick to ruin the clonemakers’ entire day, and yet charm its customers so much that they flock back to the fold in droves. It’s a bit premature to describe IBM as a busted flush in the personal computer market, but however well IBM designs and prices its next machines, it still faces an uphill struggle. Apricot’s share price has come up 50% from its low point towards the end of last year, but at around 67 to 68 pence, there is still a little more to go for, and the immediate ceiling looks to be around the 80 pence mark. And if Apricot uses the year it has bought itself wisely and well, we may well be writing a deal more enthusiastically a year from now.

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CBR Staff Writer

CBR Online legacy content.