Osborne Computer Corporation

This article is about the American computer company. For the Australian company, seeOsborne (computer retailer).

TheOsborne Computer Corporation(OCC) was an American computer company and pioneering maker ofportable computers.It was located in theSilicon Valleyof the southernSan Francisco Bay AreainCalifornia. Adam Osborne,the founder of the company, developed, with design work fromLee Felsenstein,the world's first mass-produced portable computer, theOsborne 1,in 1981.

Osborne Computer Corporation

Osborne Computer Corporation Stock Certificate
Industry	Computer hardware
Founded	1980(1980)
Defunct	1985
Fate	Bankrupt
Successor	Mikrolog Ltd
Headquarters	Silicon Valley, San Francisco Bay Area, California
Key people	Adam Osborne Lee Felsenstein
Products	Osborne 1 Osborne Executive Osborne Vixen Osborne PC(never released)

History

Osborne 1

Tom Cooper signs with Adam Osborne.

Main article:Osborne 1

AfterAdam Osbornesold his computer book-publishing company toMcGraw-Hillin 1979, he decided to market an inexpensive portable computer with bundled software and hiredLee Felsensteinto design it. The resultingOsborne 1featured a 5 inch (127 mm) 52-columncathode-ray tubedisplay, two floppy-disk drives, aZ80microprocessor, and 64KBofRAM.It could fit under an airplane seat and survive being accidentally dropped. The bundled software package included theCP/Moperating system, the MBASIC and CBASIC programming languages,theWordStarword processing package, and theSuperCalcspreadsheet program. It also included project management software with PERT and GANTT charts, and communications software for a 300 baud modem. Osborne obtained the software in part by offering stock in the new Osborne Computer Corporation,which he founded in January 1981. For example,MicroPro Internationalreceived 75,000 shares and $4.60 for each copy of WordStar Osborne distributed with his computers.

Unlike otherstartup companies,Osborne Computer Corporation's first product was ready soon after its founding. The first Osborne 1 shipped in July 1981, and its low price set market expectations for bundled hardware and software packages for several years to come. The company sold 11,000 Osborne 1s in the eight months after its July 1981 debut, with 50,000 more on backorder, although the early units had a 10 to 15% failure rate.The peak sales per month for it over the course of theproduct lifetimewas 10,000 units, despite the initial business plan for the computer predicting a total of only 10,000 units sold over the entire product lifecycle. Osborne had difficulty meeting demand, and the company grew from two employees, Osborne and Felsenstein, to 3,000 people and $73 million in revenue in 12 months. The growth was so rapid that, in one case, an executive who returned from a one-week trade show had to search two buildings to find her relocated staff.The company announced in October 1982 a temporary bundling ofAshton-Tate'sdBase II,increasing demand so much that production reached 500 units a day and severely diminishing quality control.

Future vision of portable computers seen in Australia

In 1982, Osborne was originally represented in Australia exclusively by President Computers Pty Ltd headed by Tom Cooper, a Captain of Industry in the emerging Australian PC era. With outstanding success of Osborne 1 sales in Australia, President Computers was lauded at the time by Osborne Corp USA as the largest global distributor of Osborne 1 luggable computers outside of Computerland USA. However with success, Osborne's visiting CFO had his own sights on the Australian market place and convinced Adam Osborne to split the Agency much to Cooper's objection. This move saw President Computers equally divide its current Dealership arrangement when Osborne Corporation setup to hold half the dealership Agency. Upon this decision President Computers exclusivity signed on Osborne's luggable rival the US Del Mar CA manufactured Kaypro Computer produced by Non Liner Systems which boasted a larger format in-built screen.

Cooper held a trusted business relationship with Adam Osborne and was privy to an early viewing of the yet to be released newOsborne Executive.On sighting warehouses full of the first model, Cooper cautioned Osborne that the Osborne II should only be announced once the original Osborne 1 stock had been depleted.Ultimately, dismissing such advice contributed to Osborne Corporation's demise and Chapter 11 filing in September 1983. Osborne Corporation in Australia was then restructured and moved towards the PC sector but retained use of the Osborne brand. By this time President Computers also had successfully enjoyed strong success with Kaypro luggable computer sales had itself moved into the PC Sector under its own private label brand with Cooper's President Computer PC Assembly plant officially opened on the Gold Coast Technology Park, 1 Computer Street, Labrador Queensland in 1986 by Minister for Industry, Small Business and Technology of Queensland for Industry and Innovation Hon.Mike Ahern.

Competition

Despite early success, Osborne struggled under heavy competition.Kaypro Computeroffered portables that, like the Osborne 1, ran CP/M and included a software bundle, but Kaypro offered larger 9 inch (229 mm) screens.Apple Computer's offerings had a large software library of their own and with aftermarket cards, could run CP/M as well.IBM's PC was faster, more advanced, and offered a rapidly growing software library, and Osborne's efforts to raise $20 million in capital to rush an IBM-compatible computer to market were unsuccessful.

The Osborne effect

Main article:Osborne effect

According to proponents of theOsborne effecttheory, Adam Osborne damaged his company's current sales when he began showing theOsborne Executiveto journalists in early 1983. Dealers rapidly started cancelling orders for the Osborne 1 in anticipation of the new Executive. Unsold inventory piled up and in spite of dramatic price cuts – the Osborne 1 was selling for $1295 in July 1983 and $995 by August – sales did not recover. Losses, already higher than expected, continued to mount, and OCC declaredbankruptcyon September 13, 1983.Disagreement exists on whether the Osborne Effect truly caused the company to collapse, withRobert X. Cringelyand Charles Eicher attributing its failure to other causes.

Bankruptcy

When it was apparent that the company would be closing down, a company meeting was held with all employees. The first round of layoffs involved sales staff, production staff, domestic marketing and most mid to low-level clerical support. These employees were presented with their paychecks only. The management that remained was primarily from the international marketing division.

Nine days later on September 22, 1983 a group of 24 investors filed suit against OCC and several individuals, seeking $8.5 million in damages for masking the company's true financial situation and accusing several directors of the company ofinsider trading.Osborne emerged from bankruptcy in 1984 and released theOsborne Vixen,a compact portable running CP/M, in late 1984, along with theMorrow Pivot-based Osborne 3 (known as the Osborne Encore overseas). However, the company never regained its early prominence. A last ditch effort to create a fully IBM compatible Osborne produced three prototypes, but too late to save the company from bankruptcy.

Commercial rights for the Osborne brand name were later acquired by the Finnish clone PC maker Mikrolog Ltd which sold its server and desktop PCs domestically under the previously world famous name until 2021, when Mikrolog went bankrupt.

References

Further reading

• Freiberger, Paul;Swaine, Michael(1984).Fire in the Valley.McGraw Hill.ISBN0-07-135895-1.
• Grzanka, Leonard G. (January 1984)."Requiem for a Pioneer".Portable Computer.Vol. 2, no. 1. pp. 29–34.
• Osborne, Adam;Dvorak, John C.(1984).Hypergrowth: The Rise and Fall of Osborne Computer Corporation.Idthekkethan Publ. Co.ISBN0-918347-00-9.