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March 3, 1987

ZENITH DATA SYSTEMS QUIETLY BUILDS A DOMINANT POSITION IN PERSONALIKE MARKET

By CBR Staff Writer

At $548m a year, Zenith Data Systems, the personal computer arm of Glenview, Illinois-based Zenith Electronics Corp, is rather more than a niche company. But, that is how company president Robert Dilworth describes the quiet giant: We are in government, especially defence; universities, where we are as big as IBM; the Fortune 1,000 as an OEM and end-user supplier; and we’re beginning to play in the retail channel – ComputerLand stocks our portables. Most company advertising slogans are a mixture of hype, wishful thinking and downright dishonesty but the quiet giant seems a rather appropriate tag for Zenith. Until it beat IBM for the US Internal Revenue Service portable computer contract this time last year, it rarely made the headlines. Yet its turnover is not far short of the much more publicised Compaq Computer Corp and its 400,000 unit shipments in 1986 last year made it the largest IBM-compatible supplier by volume behind IBM itself. Such is its confidence that at Comdex/Fall in Las Vegas in November, Zenith followed Compaq’s example and launched a 80386-based Personal, despite Dilworth’s belief that IBM will produce a closed architecture 386 machine at some point. He says there is plenty of demand for a go-faster AT, and is confident that, if necessary, Zenith can produce a machine to run any new software developed for IBM’s closed machines. He doesn’t really think that will be necessary, but if it is, the compensation for the extra expenditure will be the elimination of the Far East clones as competition. In the UK, 27% of Compaq’s revenue comes from its 80386, but Dilworth does not expect Zenith’s to account for a similar proportion of its business until someone comes along with the right applications software. Dilworth looks to an artificial intelligence product, or perhaps desktop publishing, to turn the 386 into the mass market machine the way that Wordstar did for CP/M, Lotus 1-2-3 did for the IBM Personal Computer, and desktop publishing did for Apple. The product is probably being developed in somebody’s garage right now.

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