During the 1950’s, 1960’s, and most of the 1970’s, all of IBM’s computers were big. IBM ignored the whole concept of microcomputers for many years.

Eventually, IBM created microcomputers. But IBM’s first microcomputers, the IBM 5100 and IBM System 23, weren’t taken seriously — not even by IBM.

The IBM PC

When many IBM customers began switching to Apple 2 microcomputers to handle spreadsheets, IBM got alarmed, so IBM decided to develop an improved microcomputer, called the IBM Personal Computer (IBM PC), which would be more powerful than Apple 2 computers.

To invent the IBM PC, IBM created 3 secret research teams who competed against each other. The winner was the research team headed by Philip “Don” Estridge in Boca Raton, Florida. His team examined everything created by the other microcomputer companies (Apple, Radio Shack, Commodore, etc.) and combined their best ideas, to produce a relatively low-cost computer better than all competitors.

Don’s team developed the IBM PC secretly. IBM didn’t announce it to the public until August 12, 1981.

The IBM PC was a smashing success: IBM quickly became the #1 microcomputer company — and Apple dropped to #2.

Improved versions

After inventing the IBM PC, IBM invented improved versions:

After 1987, IBM invented many other improved versions.

While IBM was inventing improvements, IBM’s competitors invented imitations called clones, which were often better than IBM’s originals. Here’s how they all compared.…

Hard drive

The PC didn’t have a hard drive. Here’s what happened afterwards:

RAM

RAM has grown:

CPU

The PC and XT each contained an Intel 8088 CPU chip at 4.77MHz. Most XT clones ran twice as fast (and thus called turbo XT clones) because they contained an 8088-1 chip at 10MHz.

The AT contained an Intel 286 chip (which works more efficiently than an 8088) at 6MHz. In 1986, IBM switched to 8MHz. AT clones ran at 12MHz.

The PS/2 came in many models: depending on how wealthy you were, you could choose an 8086 chip at 8MHz, a 286 chip at 10MHz, a 386SX chip at 16MHz, a 386DX chip at 16, 20, or 25 MHz, or several 486 models.

Modern computers contain an Intel Pentium chip or AMD Athlon chip. They run at about 15000 MHz (which is 1½ GHz).

Keyboard

The PC’s keyboard contained 83 keys:

The keyboard was designed by Don Estridge personally. To fit all those keys on the small keyboard, he had to make the ENTER and SHIFT keys smaller than typists liked.

Above the top row of keys, he put a shelf to hold pencils. To make room for that shelf, he put the 10 function keys at the left side of the keyboard, even though it would have been more natural to put the F1 key near the 1 key, the F2 key near the 2 key, etc.

The XT’s keyboard was the same, but XT clones rearranged the keys to make the ENTER and SHIFT keys be bigger.

The AT’s keyboard made the ENTER and SHIFT keys be bigger and included 1 extra key (making a total of 84 keys). In January 1986, IBM began selling a bigger AT keyboard that included 101 keys and put the function keys in the top row (near the pencil ledge) instead of at the left.

Modern computers include 3 extra keys to handle modern Windows (making a total of 104 keys) and often include even more keys, to handle the Internet!

Floppy disks

For the PC, IBM used 5¼-inch floppy disks holding just 160K. Then IBM switched to 180K, then 360K. The XT used 360K disks also. The AT used 1.2M disks. All those disks were 5¼-inch.

The PS/2 used 3½-inch disks instead, because they were sturdier, more reliable, easier to carry, and permitted the drive & computer to be smaller. Those 3½-inch disks typically held 1.44M. (Exceptions: the cheapest PS/2 models handled just 720K; some experimental models could handle 2.88M.)

Modern computers imitate the PS/2 and use 1.44M.

Video

The PC’s base price didn’t include a monitor — or even a video card to attach the monitor to.

Color versus monochrome When IBM announced the PC, it announced two kinds of video cards. One kind attached to a color monitor and was called the Color Graphics Adapter (CGA). The other kind attached to a monochrome monitor and was called the Monochrome Display Adapter (MDA).

Which was better: CGA or MDA? CGA had two advantages: it could handle colors, and it could handle graphics. MDA had two advantages: it could produce prettier characters (though no graphics), and it could underline.

CGA could handle these display modes:

MDA could handle this display mode:

Hercules A company called Hercules invented the Hercules graphics card, which resembled the MDA but could also display black-and-white graphics on the monochrome monitor. Several companies made video cards imitating the Hercules card; those imitations were called Hercules-compatible graphics cards.

Hercules could handle these display modes:

EGA In September 1984, IBM invented the Enhanced Graphics Adapter (EGA) and an EGA monitor to go with it. That combination was better than CGA: it produced more colors and higher resolution. It could handle these display modes:

Unfortunately, it was too expensive for most folks.

VGA The PS/2 came with an even better color monitor, called a Video Graphics Array color monitor (VGA color monitor), and a VGA chip on the motherboard to go with it. That combination produced even more colors and even higher resolution. It could produce many thousands of colors (262,144 colors!), though you could display just 256 of them simultaneously. IBM figured out a way to make the VGA chip cheaply, so it became popular. It could handle these display modes:

VGA downgrades For folks who were so impoverished that they couldn’t afford the VGA chip, IBM invented an cheaper good chip, called the Multi-Color Graphics Array chip (MCGA chip), which produced fewer simultaneous high-resolution colors. It could handle these display modes:

For folks who couldn’t afford a VGA color monitor, IBM invented a cheaper VGA monitor, which displayed shades of gray instead of colors.

VGA upgrades Modern computers come with better VGA monitors and chips, producing a resolution of 1024´768 or even higher.

Power supply

Inside the system unit, the PC contained a power supply, which transformed AC current to DC and could produce 63½ watts of power. It also contained a fan that acted as a farting ass: it sucked hot air from inside the computer and blew it out the computer’s backside.

The XT contained a stronger power supply that could produce 135 watts, to help it handle the hard drive.

The AT contained an even stronger power supply: 192 watts. AT clones contained an even stronger power supply: 200 watts.

Modern computers use modern circuitry, which is more energy-efficient and doesn’t require so much power. Some modern computers get by with just 135 watts. Tall towers containing extra circuitry sometimes contain bigger power supplies: 200 or 300 watts.

In modern computers, the power supply does not act as a farting ass. Instead, it pushes the air in the opposite direction. It sucks in air from outside the computer, so it acts as a nose: it breathes in fresh air.

Don’t put your new computer back-to-back with an old computer. If you do, the new computer will breathe in the old computer’s hot farts!

Bus

A computer’s motherboard contains slots, to hold printed-circuit cards.

8-bit PC bus The PC’s motherboard contained 5 slots, to hold printed-circuit cards. The motherboard’s 62 wires running to and through the slots were called the bus. Since it was in the PC, it was called the PC bus.

Of the 62 wires, just 8 carried data. The other 54 wires were “bureaucratic overhead” that helped control the flow.

Since just 8 wires carried data, the bus was called an 8-bit data bus, its slots were called 8-bit slots, and the printed-circuit cards you put into the slots were called 8-bit cards.

The XT’s motherboard used the same PC bus but included 8 slots instead of 5.

16-bit AT bus The AT’s motherboard used a wider bus: 98 wires instead of 62. Of the 98 wires, just 16 carried data, so the bus was called a 16-bit data bus. It was called the AT bus. That 98-wire technique was called the Industry Standard Architecture (ISA, pronounced “eye suh”). The bus was therefore also called the ISA bus, its slots were called ISA slots, and the printed-circuit cards you put into the slots were called ISA cards.

32-bit bus Later computers used an even wider bus: a 32-bit data bus!

If you had a PS/2 computer based on a 386 or 486 chip, it used a 32-bit bus called the Micro Channel. That technique was called Micro Channel Architecture (MCA). Into its slots, you put MCA cards.

If you had a clone containing a 386 or 486, and the clone was fancy, it used a 32-bit bus technique called Extended ISA (EISA, pronounced “ee suh”). Its bus was called the EISA bus; into its slots, you put EISA cards.

If your computer is modern, it contains a Pentium (or Athlon or Duron or K6) and uses a 32-bit bus technique called Peripheral Component Interconnect (PCI). Its bus is called the PCI bus; into its slots, you put PCI cards. The nice thing about PCI cards is that the computer can automatically figure out what each card’s purpose is, so you can just plug the card into the slot and start using the card immediately: that feature is called plug and play.

1-bit USB bus If your computer is very modern, it contains a 32-bit PCI bus but also contains a second bus, called the Universal Serial Bus (USB), which is a 1-bit bus that’s slow but has three nice properties: all USB devices are plug-and-play, external (so you can install them without opening the system unit’s case), and hot-swappable (so you can insert, remove, or swap the devices safely even while the power is still on). The typical modern computer has 1, 2, 3, or 4 USB slots, which are on the system unit’s back wall and called USB ports.

Multimedia

The PC’s price included no mouse, no microphone, no modem, no speakers (except for a tiny internal speaker that just beeped), and no CD-ROM drive, because all those devices were too expensive then. The XT, AT, and PS/2 had the same disappointments.

Modern computers come with a mouse, a microphone, a modem, stereo speakers (2 of them or 3 or 5!), and a CD-ROM drive (or DVD drive or CD-RW drive).

Here’s how most computers are priced. (I’ll show you the prices that were in effect when this book went to press in April 2002. Prices drop about 3% per month, 30% per year.)

$800 gets you a “standard” computer. That’s the cheapest kind of modern computer.

If you pay more than $800, you get a computer that’s fancier — a powerful “muscle machine” that will impress your friends. They’ll be impressed by how much money you spent. (If you pay much more than $800, they might also be impressed by how stupid you were to overspend.)

If you pay less than $800, you get a computer that’s old-fashioned. If you pay slightly less than $800, the clone will still run most programs fine, though your friends will laugh at you for buying such a puny, quaint computer. If you pay much less than $800, the computer will probably have some difficulty running modern programs. But hey, if you can’t afford $800, a substandard computer is better than no computer at all! If you buy a substandard computer, your next task is to figure out which software it can handle well; then buy just that kind of software.

Here are the details. (I’ve rounded all prices to the nearest $25.)

CPU

The standard computer’s CPU is an AMD Duron (or Pentium Celeron), running at a speed of 1 gigahertz. It’s fast enough to perform most tasks quickly. If you want a faster CPU, you must pay a surcharge:

RAM

The standard computer’s RAM is 256M. If you want 512M instead, add $50.

If you’re willing to accept just 128M (which is substandard), deduct $25. But some Windows programs are memory hogs that expect you to have at least 256M. If you have just 128M, the memory-hog programs will still run, but slowly.

Hard drive

The standard computer’s hard drive is 40 gigabytes (40G). If you want a bigger hard drive, you must pay a surcharge:

If you’re willing to accept just 20G (which is substandard), deduct $25. But I recommend getting at least 40G, because big drives act faster than small drives, especially when small drives get filled up and have trouble finding places to store your files. Also, music and video files take up lots of space and fill a 20G drive quickly. A 40G drive costs about $25 more than a 20G drive; that $25 is a worthwhile insurance policy against future increases in software size.

Video

The standard computer includes a 17-inch color monitor. Add $100 for 19-inch, $375 for 21-inch.

If you’re willing to accept just 15-inch, deduct $25, but you’ll be sorry! Many programs and Internet pages assume you have a 17-inch monitor; if your monitor is smaller, you can’t see all the info easily, and you’ll feel a strong urge to curse. You’ll be staring at your monitor for many hours; make those hours more pleasant and more reasonable by getting at least a 17-inch monitor. It’s well worth the $25 difference. A 19-inch monitor is even nicer but costs more and requires that you sacrifice more desk space: it’s Texas size, not New York apartment size.

The standard video card has 32M of RAM on it. Add $75 if 64M (which lets games and other animations run faster). Deduct $50 if the video has no RAM of its own and uses the main RAM instead.

Optical drive

The standard computer has a CD-ROM drive. If you want more than that, pay a surcharge:

Sound

The standard computer includes a pair of stereo speakers. Add $25 if you also get a subwoofer (a third speaker, which gives you a richer bass). Add $50 if you get a total of 5 speakers (2 stereo speakers, 1 subwoofer, and 2 more speakers). Deduct $25 if the speakers are missing.

Other devices

The standard computer’s modem has an advertised speed of 56 kilobaud and can also handle faxes. Deduct $25 if you get no modem.

The standard computer includes a keyboard, mouse, and 3½-inch floppy drive. Deduct $25 if you get no floppy drive.

The standard computer comes in a tower case. Deduct $25 if the case is a desktop instead of a desktop. The tower case is more common and has two advantages: it can hold extra cards (but you probably won’t buy any!) and it can sit on the floor (so your desk is uncluttered and your monitor sits low enough to be seen without craning your neck up).

Software

The standard computer includes Windows XP Home Edition. Add $50 if you get Windows XP Professional Edition instead. Deduct $25 if you get Windows Me or Windows 98 instead. Deduct $100 if you get no Windows or no Windows manual.

The standard computer comes with a checkbook-balancing program, such as Quicken or Microsoft Money (or deduct $25).

The standard computer comes with Microsoft Works. Add $25 if you get Microsoft Works Suite or Lotus Smart Suite or Corel WordPerfect Office instead. Add $150 if you get Microsoft Office Small Business Edition instead. Add $250 if you get Microsoft Office Professional Edition instead. Deduct $25 if you get none of those.

Those prices are what big computer makers add in for software that comes with the computer. If instead you buy the software separately later, you’ll pay much more!

Guarantees

The standard computer comes with a 30-day money-back guarantee, a 1-year warranty, and 1 year of tech support for hardware & software.

Deduct $25 if the money-back guarantee is 15-day instead of 30-day. Deduct $50 if the money-back guarantee is missing.

Add $50 if the warranty is 3-year instead of 1-year. Deduct $25 if the warranty is 3 months instead of 1-year. Deduct $50 if the warranty is missing.

Add $50 if the tech support is 3-year instead of 1-year, $75 if the tech support is lifetime instead of 1-year.

The tech support should be 24 hours per day. Deduct $25 if the tech support is 12 hours per day. Deduct $75 if the tech support is 8 hours per day.

Deduct $75 if the company is run by jerks. Here are signs that the company is run by jerks: you get charged a “restocking fee” for returning the computer, the advertised price applies just if you pay cash instead of using a credit card, or the tech-support phone number is usually busy or unanswered or puts on you hold for over 30 minutes or “requires you a fee for software questions”.

Kinds of computers

You’ve seen that a standard computer costs just $800. But an upscale computer includes extras that raise the total cost to $950; a fancy computer raises the total cost to $1150; a luxury computer raises the total cost to $1700; and a downscale computer lowers the total cost to $575. Here’s how:

Those prices do not include a printer, which is priced separately.

Which kind to buy Though a standard computer is adequate, a fancy computer is much nicer and will give you a happy thrill. It’s the kind of computer most computer experts recommend.

If a fancy computer is beyond your budget but you’d like something better than just “standard”, buy an upscale computer, which is a compromise. It will give you the pleasure of being uppity, better than standard.

A luxury computer is what computer experts lust for, but spending so much money is foolish. To get a taste of luxury without being a fool, buy a fancy computer but soup it up by adding whichever luxurious element excites you the most. For example, if you’re mainly lusting for a 19-inch monitor, go ahead: buy a fancy computer but with a 19-inch monitor instead of 17-inch.

If you’re on a very tight budget and can’t afford even a standard computer, buy a downscale computer. It will still run most programs okay. Just be aware that within 2 years, you’ll have an urge to soup it up, and making the alterations will cost you more (in labor charges, etc.) than if you buy a standard computer all at once.

Notebooks are pricey

The first rule about buying a notebook (or laptop) computer is: don’t buy one unless you must! Try buying a desktop computer instead!

Though notebook computers are portable and cute, you pay a lot for portable cuteness.

For example, suppose you want to buy this kind of modest computer: a 1 GHz Duron (or Celeron) with 256-megabyte RAM, 20-gigabyte hard drive, floppy drive, color screen, mouse (or touchpad), CD-ROM drive, sound, 56K modem, and Windows XP. You can get a desktop computer fitting that description, from the most aggressive discount dealers, for about $450; to get a notebook computer fitting that description, you must pay $900 instead.

If you can afford $900, should you buy a notebook computer? No! Here’s what $900 gets you:

Desktop computers give you much more equipment per dollar than notebook computers. So don’t buy a notebook unless you must.

If you need to use a computer in two locations, don’t buy a notebook: buy two desktop computers instead! Buying two desktop computers costs about the same as buying one notebook. Or buy a desktop computer that’s light enough to carry to your car easily.

Buy a notebook computer just if you need to travel often to many locations or if you’re a student or researcher needing to take notes in a lecture or library.

When buying a notebook computer, the price depends mainly on what kind of screen you get. Most folks buy color screens, though black-and-white monochrome screens are cheaper. For color screens, the old-fashioned kind is called passive; the next step up is dual-scan passive, which is brighter and works faster; the most expensive is active-matrix, which is even brighter and works even faster. Passive is also called STN; dual-scan passive is called DSTN; active-matrix is called TFT.

Most folks buy color screens that are active-matrix (which is the best type) or dual-scan passive (which costs $100 less). To help folks who are debating between those two types, some Compaq notebooks use a compromise called high-performance addressing (HPA).

I’d like to tell you about a company that makes reliable, powerful computers, charges you very little, and is a pleasure to call if you ever need technical help.

That’s what I’d like to tell you, but I haven’t found such a company yet! If you find one, let me know!

Each day, I falsely think I’ve finally found my hero company. I tell the name of the hero-company-du-jour to folks like you who call me for advice. But like O.J. Simpson, my hoped-for hero gets quickly accused by my customers of doubly murdering them in some way. How depressing! Can’t any company do things right? I’ve been writing this book for 30 years and have yet to find a company I still feel proud about. I’m disgusted.

Business cycle

Hero companies rise but then fall because they suffer through the following business cycle.…

When the company begins, it’s new and unknown, so it tries hard to get attention for itself by offering low prices. It also tries to help its customers by offering good service.

When news spreads about how the company offers low prices and good service, the company gets deluged with more customers than it can handle — and it’s also stuck answering phone calls from old customers who still need help but aren’t buying anything new.

To eliminate the overload, the company must either accept fewer customers (by raising prices — or by lowering them slower than the rest of the industry), or offer less service per customer (by refusing to hire enough staff to handle all the questions), or hire extra staff (who are usually less talented than the company’s founders but nevertheless expect high pay). In any of those cases, the company becomes less pleasant and heroism is relegated to history. The company becomes just one more inconsequential player in the vast scheme of computer life.

What’s in store for you

This chapter portrays the players. Warning: these portraits are anatomically correct — they show which companies are pricks.

The computer industry’s a soap opera in which consumers face new personal horrors daily. I wrote this in August 2002, but you can get the newest breathtaking episode of the computer industry’s drama, How the Screw-You Turns, by phoning me anytime. I’ll tell you the newest dirt about wannabe and were-to-be hero companies.

So before buying a computer, phone me at 603-666-6644 to get my new advice free. Tell me your needs, and I’ll try to recommend the best vendor for you. Before phoning me, become a knowledgeable consumer by reading this chapter.

Of all the major reputable computer manufacturers, ABS charges the least for high-quality computers.

You can buy from ABS headquarters or from its NuTrend Computer division, which charges even less. Here’s what NuTrend charged when this book went to press in August 2002:

For example, the chart’s bottom line says:

Since prices drop each month, they’ll probably be even lower by the time you read this book.

Each NuTrend system comes in a tower case. You also get a 56K fax/modem, network card, sound card, microphone, 1.44M floppy drive, mouse, mouse pad (to put the mouse on), keyboard, Windows XP Home Edition, and WordPerfect Office 2002. The hard drive is fast (7200 RPM).

Software deals

NuTrend sells software at low prices. For example, it sells Norton Antivirus 2002 for $16, Microsoft Office XP Small Business Edition for $160, Microsoft Office XP “Professional Edition plus Publisher” for $286, and Corel Draw 10 for $130. For just $49 extra, ABS will give you Windows XP Professional Edition instead of Home Edition. Those prices are for full versions of the software, bought with your computer.

Shipping

NuTrend is a mail-order company, near Los Angeles. It ships just to the US (not to other countries).

Here’s what NuTrend charges to ship by 3-day FedEx:

Before shipping, NuTrend spends a week building your computer, so be patient!

If you don’t want to pay any shipping charges, you can pick up your computer at NuTrend’s office.

Guarantees

If you buy a complete assembled computer system from NuTrend, you get:

How to order

NuTrend used to accept phone orders, but now NuTrend requires all orders to be placed by Internet instead, using NuTrend’s Internet Web site, which is www.nutrend.com. (The Internet chapter explains how to use the Internet. If you don’t have a computer yet, you can place your order by using a friend’s computer, or ask to use the freely available computers at your company, school, or public library.)

If you refuse to order by Internet from NuTrend, you can order by phone from ABS headquarters instead, but ABS headquarters usually charges more than NuTrend.

At NuTrend’s Internet Web site, you can place your order and also customize it. For example, after you’ve chosen what kind of computer you’re interested in, you see a list of all the computer’s components, with a down-arrow next to each one. For example, next to the hard drive’s description, you see a down-arrow. If you choose the down-arrow, you see a list of different hard drive sizes and their prices.

To give yourself an education about component prices, pretend you want to buy a computer from NuTrend, but stop the process just before giving out your credit-card number (if you want to avoid paying).

Locations

ABS has 3 locations.

The ABS headquarters is in California. NuTrend is on the same street, next door. An affiliate is in Pennsylvania.

Here’s how to reach them:

ABS headquarters often has a sale, where any system over $1000 gets you a 5% rebate. NuTrend is currently having a sale, offering college students and their teachers $20 off.

How ABS arose

ABS was started by a Chinese immigrant, Fred Chang, during the 1980’s. “ABS” stood for “American Business Service”. (Many immigrants like to invent companies that have “American” in the name, to sound patriotic.) Eventually, he operated under 5 names (“American Business Service”, “ABS Computers”, “ABS Computer Technologies”, “NuTrend”, and “Magnell Associates”), to appeal to different markets and hide the company’s ownership).

Tech support

At first, he offered poor tech support. Customers complained to me that they got put on hold for 20 minutes, then disconnected. In 1999, tech support improved, and most people got through to tech support immediately, in less than 10 seconds! Tech support was better than big-name brands!

Unfortunately, tech support has gone downhill again. Weekend and evening tech support have been eliminated, and NuTrend puts you on hold a long time with a message saying “please hold for the next available sales rep”, even though you’ve dialed the phone number for tech support, not a sales rep.

Complaints

ABS & NuTrend are members of the Better Business Bureau. Some customers complained to the Better Business Bureau about ABS & NuTrend. ABS & NuTrend finally handled most of the complaints to the customers’ satisfaction, but a few of the complaints were never resolved. Most of the complaints concerned confusions about what the guarantees cover.

I’d buy from NuTrend again

I’ve bought 2 computers from NuTrend. The first machine (bought several years ago) needed a little fiddling to work well, but the more recent machine came working wonderfully without hassles. If I were to buy another fancy computer now, I’d buy from NuTrend again.

Besides the low prices and fancy parts, another reason I like NuTrend is that NuTrend computers come with many disks full of software: you get many CD-ROM and floppy disks containing the operating system, drivers, and application software. If something goes wrong, those disks let you reinstall the software without having to erase everything and start over.

Also, the computer comes with software that’s set up normally, unlike big-name competitors whose software is customized to force you to watch annoying ads and face annoying peculiarities. What NuTrend gives you is straightforward standard simplicity.

Ads

NuTrend advertises in Computer Shopper magazine. ABS headquarters advertises in Computer Shopper and PC World. ABS Computers doesn’t advertise: it just grabs customers who accidentally type www.abscomputers.com instead of www.abscomputer.com.

Price drops

NuTrend tends to drop prices at the beginning of each month. ABS headquarters tends delay price drops until the 15^th of each month, because Computer Shopper magazine reaches subscribers about then.

Past problems

In the past, ABS didn’t use enough packing material.

But the computers I received recently from NuTrend were packed fine.

Women used to complain to me that ABS employees assume all women are stupid. Examples:

But I haven’t heard such complaints lately. Apparently ABS has improved.

NuTrend ads used to show just men using computers. Then, to appeal to women customers, they showed just women using computers. Then, to interest both sexes, they showed a woman choking her son. Well, I guess it was supposed to be a woman patting her son on the neck, but the fake grins looked like a scene from a horror movie. NuTrend’s current ad plays safe and shows no people at all.

Emachines is the only major company that advertises computers for under $500 and lets you buy them in many stores.

History

Here’s how the Emachines company began…

Radio Shack is owned by Tandy, which also used to own a chain of discount computer superstores called Computer City. Tandy eventually gave up trying to run Computer City and sold that chain to Comp USA. Computer City’s president (Stephen Dukker) was dismayed at becoming a Comp USA vice-president, so he quit and started his own company, Emachines, which invents cheap computer systems (under $500) and sells them to retail stores such as Comp USA.

He started Emachines in September 1998, using money invested by two Korean companies: Trigem (which makes Emachine’s computers) and Korea Data Systems (KDS) (which makes Emachine’s monitors).

He was wildly successful. Nine months later, in June 1999, his company become the third-biggest seller of desktop&tower computers in retail stores: just Compaq and Hewlett-Packard sold more desktop&tower computers than he. In the next month, July 1999, he shipped his 1 millionth computer. In March 2000, Emachines went public, with stock selling for $8 per share. In September 2000, he shipped his 3 millionth computer.

But after that, Emachines fell on hard times. For example, in January 2001, Emachines’ revenues (sales figures) were just half of the previous January’s. That was because the prices of fancy computer decreased, so consumers decided to buy them instead of the crummy computers that Emachines sold.

Its board of directors got worried. In February 2001, the board fired Stephen Dukker and hired, as the new head, Wayne Inouye, who was Best Buy’s senior vice president in charge of computer merchandising. In May 2001, the company was delisted from Nasdaq, because the shares were selling for less than $1 each. In November 2001, the board agreed to sell the whole company to one director, Lap Shun “John” Hui, and his private company, called EM Holdings, for $1.06 per share, 161 million dollars total.

By April 2002, Emachines had sold a total of 4 million computers since the company began. That’s not much more than the 3 million sold by September 2000.

Emachines is now number 2 in retail US sales, far behind Hewlett-Packard (which sells the Hewlett-Packard and Compaq brands). Analysts keep wondering whether Emachines will go bankrupt. But in 2001, Emachines improved its computers (which had been miserable) and its tech support (which had been atrocious before Wayne Inouye spent 20 million dollars extra on tech support and customer service in 2001). Now Emachines computers are finally worth getting: they’re decent computers at rock-bottom prices.

To guard the company from going bankrupt, the company accepts no returns from computer stores and keeps few computers in stock: it keeps waiting for small shipments to arrive by boat from its suppliers in Asia, so it occasionally runs out of computers.

When I went to buy a computer recently, I found myself buying an Emachines computer, because Emachines offered much lower prices than any other computer manufacturer. Emachines is living up to its new slogan, which is “the best computer and service little money can buy”.

The computer I bought came with one “defect”: whenever I moved the mouse, the computer made a buzzing sound. I finally figured it out: the Emachines company was too cheap to include a microphone and too stupid to remember to turn off the microphone jack, which picked up interference from mouse & monitor motions. The solution was to give the computer a command to disable the microphone jack.

Prices

Here are Emachine’s prices:

In that chart, the “minus $75” means you get a $75 rebate; “superior” means the mouse includes a wheel and the speakers are big. Each price includes a keyboard, mouse, pair of speakers, 56K fax/modem, and Windows XP Home Edition.

Those prices do not include a monitor. Emachines sells a good 17-inch monitor (model MF17f, .25mm dot pitch) for $260-$100=$156. Emachines sells a worse 17-inch monitor (model 17s, .27mm dot pitch) for $220-$100=$120.

So Emachines’ cheapest computer with cheapest monitor costs a total of $400+$120=$520, after you get your rebate.

But wait! You can pay even less! Circuit City (a chain of discount electronics stores) often has its own extra rebate, and so does Lexmark (which makes a printer). Circuit City often offers a deal where you get an Emachines computer and Emachines 17-inch monitor and Lexmark printer for a total price of just $400! Ask your local Circuit City whether Circuit City is offering any rebates this week on buying an Emachines computer with monitor and printer — or just look carefully at Circuit City’s flyer in your local Sunday newspaper.

You get a 1-year warranty. (Add $89 if you want a 3-year warranty instead.)

Where to buy

Though Circuit City usually has the best rebates on Emachines, you can also buy Emachines from other electronics stores (Best Buy, Comp USA, Fry’s, and J&R), warehouse stores (Costco, BJ’s, Sam’s Club, and BrandsMart), mail-order computer dealers (Micro Warehouse and Tiger Direct), and many other places also! Emachines distributes to retailers in the USA, Canada, and Europe.

The Emachines contribution to the world of cheap computers is: distribution!

 “Free” computer

Back in 1999, Emachines offered an extra $400 rebate if you sign a 3-year contract to use Compuserve as your Internet service provider, at a cost of $21.95 per month, so the contract cost the consumer a total of “36 months times $21.95”, which is $790.20. So for the cheapest Emachines computer, the price was “$474 minus a $75 rebate minus a $400 Compuserve rebate”, making the final price be about $0.

Stores advertised it as being a “free computer”, neglecting to mention that the price did not include a monitor and required you to sign a $790.20 Compuserve contract. That kind of advertising was popular in November 1999, when many Emachines were sold; but in the year 2000, many state governments declared those ads “misleading” and banned them.

Though Emachines sells computers for under $500, the first major company to sell good computers for under $500 was Micro Electronics Incorporated (MEI), which runs a chain of stores called Micro Center. It manufactures a computer called the PowerSpec and sells it for just $399. It also sells fancier versions:

Each price includes a keyboard, mouse, and pair of speakers. Those prices do not include a monitor or printer.

Those were Micro Center’s list prices as of July 2002. Prices continually drop, and Micro Center often has a special “sale price”.

You can buy PowerSpec computers at a Micro Center superstore (a pleasant place to shop!) or mail-order (800-382-2390).

 

The first company that made high-quality IBM clones was Compaq. Compaq began selling them back in 1983. (Before Compaq, the only IBM clones available were crummy.)

By the year 2000, Compaq was selling more computers than any other manufacturer. Yes, it was selling more computers than IBM, Gateway, Dell, and the rest of the gang.

Compaq is based in Houston, Texas. You can reach Compaq by phoning 800-at-Compaq or viewing Compaq’s Internet Web site, www.compaq.com.

Long before Compaq existed, a company called Hewlett-Packard (HP) became famous for manufacturing high-quality minicomputers, printers, scanners, calculators, and other electronic devices. HP equipment was excellent but pricey. Customers complained that “HP” stood for “high-priced”.

In 1995, HP began manufacturing an IBM clone called the Pavilion, sold through your local computer store. The Pavilion became popular because it cost less than Compaq’s desktop computers and HP’s service was slightly better than Compaq’s.

The Compaq-versus-HP debate ended in 2002, when HP bought Compaq. Now you can get two kinds of computers from a single company.

How Compaq began

It all began on a napkin. Sitting in a restaurant, two engineers drew on a napkin their picture of what the ideal IBM clone would look like. Instead of being a desktop computer, it would be a luggable having a 9-inch built-in screen and a handle, the whole computer system being small enough so you could pick it up with one hand. Then they built it! Since it was compact, they called it the Compaq Portable Computer and called the company Compaq Computer Corporation.

They began selling it in 1983, helped by venture-capital funding from Ben Rosen. They charged about the same for it as IBM charged for the IBM PC.

They sold it just to dealers approved by IBM to sell the IBM PC. That way, they dealt just with dealers IBM said were reliable — and they competed directly against IBM in the same stores.

They succeeded fantastically. That first year, sales totaled 100 million dollars.

In 1984, they inserted a hard drive into the computer and called that souped-up luggable the Compaq Plus. They also built a desktop computer called the Deskpro. Like Compaq’s portable computers, the Deskpro was priced about the same as IBM’s computers, was sold just through IBM dealers, and was built well — a marvel of engineering, better than IBM’s.

Later, Compaq expanded: it built IBM clones in all sizes, from gigantic towers down to tiny handheld computers. Compaq computers have gotten the highest praise — and ridiculously high prices.

On many technological issues, Compaq has been the first company to innovate: for example, when Intel invented the 386 chip, the first company to use it was Compaq, not IBM.

New leadership

Compaq was founded by Rod Canion. Under his leadership, Compaq developed a reputation for high quality and high prices. Engineers said that Compaq’s computers were overdesigned: they were built more sturdily than necessary for average use and were therefore too expensive.

Worried about Compaq’s high prices, some Compaq employees went on a secret mission, without telling Rod: they sneaked into a computer show, pretended they weren’t from Compaq, pretended they were starting a new computer company, and tried to buy computer parts from Compaq’s suppliers. Compaq’s suppliers offered them lower prices than the suppliers were offering Compaq — because Compaq had developed a reputation as an overly fussy company to do business with.

The secret missionaries went back to Compaq and reported their findings to the board of directors, who were becoming upset at Compaq’s astronomically high prices; so in 1991 the board fired Rod and replaced him with a cost cutter, Eckhard Pfeiffer (from Germany).

He lowered Compaq’s prices, so Compaq became affordable, and he gave up the idea that Compaq should have super-high quality. He began selling through a greater variety of dealers and through mail-order.

The low-price wide-distribution strategy worked well. More people bought Compaq computers. Sales zoomed, though Compaq’s “quality reputation” declined.

Yes, Compaq started to imitate Packard Bell: Compaq lowered its prices and its service!

In February 1995, Compaq started this nasty new service policy:

Eventually, Compaq dropped that nasty policy: tech-support calls are now free during the “initial period” (1 year on hardware questions, 3 months on software questions, longer if your Compaq was expensive): call 800-ok-Compaq, day or night (24 hours).

Eventually, Compaq started having financial difficulties, because Eckhard Pfeiffer made Compaq buy Digital Equipment Corporation and also because Compaq was having trouble competing against IBM clones priced under $700; so the board of directors fired him.

Now Compaq is run by Michael Capellas, a low-key friendly computer technician that everybody likes. He’s trying to create computers that are low-cost but exciting. He’s been the company’s Chief Executive Officer (CEO), under the guidance of the Chairman of the Board (Ben Rosen, the venture capitalist who funded the founder), until they both agreed to merge Compaq into Hewlett-Packard, where Michael Capellas’s new title is “President”.

Notebooks

In July 2000, I had to buy a notebook computer for my stepdaughter. Since I’m supposed to be a “computer expert”, I dutifully looked at all the ads in computer magazines and talked to my friends in the computer industry, trying to find the best deal. I thought the best deal would be some sort of mail-order company; but the best deal on a notebook computer turned out to be from Compaq!

I bought a Compaq Presario 1200-XL118. Here’s why it was a great deal.…

That model has become obsolete and is no longer sold.

As this book was going to press in July 2002, the best Compaq deal was a Compaq Presario 720 computer, sold at Circuit City for just $900 ($1250 minus $350 in rebates).

The price is low because it’s a closeout: the model is being discontinued because it tends to run hot (it will burn your lap) and it lacks a CD-RW drive. But keep checking Circuit City’s flyers (in your local Sunday newspaper) to find out the latest amazing deals on Compaq notebooks.

Refurbished computers

Compaq is more honest than most competitors about returned parts. If a customer returns computer equipment and Compaq determines that the equipment works okay, Compaq resells that equipment to other customers, but just in computers marked “refurbished”. (Other manufacturers, such as Packard Bell, have been dishonest: they’ve pretended refurbished computers were “new”.)

To save money, consider buying a refurbished Compaq computer from the Compaq Factory Outlet Store (10251 N. Freeway, Houston TX 77037, 888-202-4368, 281-927-6700, www.compaqfactoryoutlet.com). But be careful: refurbished computers often contain outdated versions of Windows, outdated versions of other software, no rebate coupons. The warranty is just 90 days and is weakened by a bizarre clause that says: if Compaq can’t fix your computer, Compaq can choose to give you your money back, minus a 15% restocking fee.

If you see the Factory Outlet Store’s ad for a refurbished computer at an amazingly low price and ask the store about it, the store will usually say, “Sorry, that one is sold out.”

Beware

Although I bought a Compaq notebook, I still avoid buying Compaq desktops, for several reasons.…

Compaq’s advertised price doesn’t include the monitor. For many Compaq systems, the monitor is very expensive, since Compaq’s monitor includes the speakers. If you try to save money by getting a generic monitor instead of a Compaq monitor, you have no speakers and hear no sounds.

Compaq’s modem and sound card are often combined — so if you try fiddling with the hardware or software for one of those two devices, the other device stops working.

Compaq’s warranty period and free-technical-support period are usually shorter than for mail-order companies. When you buy a Compaq, the salesperson will try to talk you into spending about $200 extra for an extended warranty, because that overpriced extended warranty is where the store makes its profit. The extended warranty, sold to you for $200, costs the store just $50, because the third-party repair company doing the warranty work knows the warranty contains clauses that make the warranty useless in most situations. The warranty does not cover software, does not cover damage, does not cover tech support, does not cover explaining how to use the computer, does not cover services (such as “trying to recover the info from your hard disk before we reformat it”), does not cover computers that have been altered, and does not cover year 1, which is the year when you’re most likely to need help.

 

To buy a decent notebook computer for under $1200, look at ads from Circuit City and Best Buy for rebates on notebooks by HP, Compaq, and Toshiba. Toshiba’s tend to be the nicest; Compaq’s tend to cost the least.

When I was writing this book in July 2002, the best deals on notebook computers were the Compaq Presario 720 ($900 after Computer City rebate, as I described earlier) and the Toshiba Satellite 1405-S151 ($1200 after Best Buy rebate, Celeron 1.2GHz, 256M drive, 30G hard drive, 14-inch 1024x768 active-matrix screen, 16M video RAM, a combo drive handling DVD & CD/RW, Touchpad, stereo speakers, lithium-ion battery, 56K fax/modem, network card, 3½-inch floppy drive, Windows XP, and Lotus SmartSuite).

For fancier computers, at higher prices, explore these mail-order alternatives:

All three companies became famous by advertising in Computer Shopper magazine. BSI & Hyperdata now advertise just on the Internet. Sager still advertises in Computer Shopper but offers slightly lower prices on its Internet Web site.

Though Compaq was the first company to make good IBM clones, its clones were expensive. The first company that sold fast IBM clones cheaply was PC’s Limited, founded in 1984 by a 19-year-old kid, Michael Dell. He operated out of the bedroom of his condo apartment, near the University of Texas in Austin.

At first, his prices were low — and so were his quality and service. Many of the computers he shipped didn’t work: they were dead on arrival (DOA). When his customers tried to return the defective computer equipment to him for repair or a refund, his company ignored the customer altogether. By 1986, many upset customers considered him a con artist and wrote bitter letters about him to computer magazines. He responded by saying that his multi-million-dollar company was growing faster than expected and couldn’t keep up with the demand for after-sale service.

In 1987, Dell raised his quality and service — and his prices. In 1988, he changed the company’s name to Dell Computer Corporation.

Now he charges almost as much as IBM and Compaq.

His quality and service have become top-notch. They’ve set the standard for the rest of the computer industry. In speed and quality contests, his computers often beat IBM and Compaq.

In 1997 Dell officially became the top dog in the computer-quality wars: according to PC World magazine’s surveys of its readers, Dell computers are more reliable than any other brand, and Dell’s tech-support staff does the best job of fixing any problems promptly. Dell has retained that title ever since.

Dell’s ads bashed Compaq for having higher prices than Dell and worse policies about getting repairs — since Dell offered on-site service and Compaq doesn’t.

Dell tried selling through discount-store chains but gave up and decided to return to selling just by mail. Though HP/Compaq is king of retail sales, Dell has become king of mail-order sales.

Dell computers used to come with this guarantee: if Dell doesn’t answer your tech-support call within 5 minutes, Dell will give you $25! Dell doesn’t make that guarantee anymore.

Dell gives lifetime toll-free technical support for hardware questions and usually answers its phones promptly. Unfortunately, Dell has reduced Windows technical support from “lifetime” to “30 days”.

To get a free Dell catalog or chat with a Dell sales rep, phone 800-BUY-DELL.

 

Gateway was the first company to sell lots of computers by mail. Here’s how Gateway became mail-order king — until Gateway stumbled and Dell zoomed ahead.

How Gateway arose

Gateway began because of cows.

In the 1800’s, George Waitt began a cattle company. According to legend, he got his first herd by grabbing cattle that jumped off barges into the Missouri River on the way to the stockyards.

His cattle business passed to his descendants and eventually into the hands of his great-grandson, Norm, who built the Waitt Cattle Company into one of the biggest cattle firms in the Midwest. The company is on the Missouri River, in Iowa’s Sioux City, which is where Iowa meets South Dakota and Nebraska.

Norm’s sons — Norm Junior and Ted — preferred computers to cows, so on September 5^th, 1985, they started the “Gateway 2000” company in their dad’s office. They told him computers are easier to ship than cows, since computers can take a long journey without needing to be fed and without making a mess in their boxes.

22-year-old Ted was the engineer and called himself “president”; Norm Junior was the businessman and called himself “vice president”. Their main investor was their grandma, who secured a $10,000 loan. They hired just one employee: Mike Hammond.

At first, they sold just parts for the Texas Instruments Professional Computer. Soon they began building their own computers. By the end of 1985, they’d sold 50 systems, for which customers paid a total of $100,000.

Gateway grew rapidly:

For each year, that chart shows how many computers were sold during the year, the total numbers of dollars that customers paid for them and for add-ons, and how many employees Gateway had at the year’s end.

Here are highlights from the history of Ted Waitt and his employees during those years:

Now Ted owns 32% of Gateway’s stock; Norm owns very little.

Though Gateway became huge, with offices worldwide in France, Germany, Ireland, Australia, and Japan, it was still headquartered in North Sioux City, a small behind-the-times town that got its first 4-way stop sign in 1992, first McDonald’s hamburger joint in 1994, and doesn’t have any traffic lights yet.

Gateway gets along well with its neighbors: in fact, two former mayors of Sioux City became Gateway employees!

Gateway became a rapidly growing cash cow: moo-lah, moo-lah! But Gateway didn’t lose its sense of humor. When you buy a Gateway computer, it comes in a box painted to look like a dairy cow: white with black spots.

Ben & Jerry’s Ice Cream sued Gateway for copying the idea of putting cow spots on packages. Meanwhile, Gateway sued a shareware distributor called Tucows for using spotted cows to sell computer products. Those suits have been settled.

Gateway’s ads

Gateway became famous because of the amazing photography in its ads.

Gateway was the first big mail-order manufacturer to give honest pricing: the advertised price includes everything except shipping. The price even included a color monitor. And since all components were high-quality, a Gateway system was a dream system. With dreamy ads and a low price, how could you not buy?

Gateway also came up with a friendly slogan: “You’ve got a friend in the business.”

How Gateway fell

On Millennium Day — January 1, 2000 — Ted Waitt decided to semi-retire: he turned the day-to-day operation of Gateway over to Jeff Weitzen, who had joined Gateway 2 years earlier after working at AT&T for 18 years. So Jeff became Gateway’s President and Chief Executive Officer (CEO), though Ted remained Chairman of Gateway’s Board of Directors.

Jeff was proud to be chosen as the man to take Gateway past the millennium. He had many inspired ideas — most of which turned out to be wrong.

He decided to move Gateway’s executive offices to downtown San Diego, to attract executive talent who wouldn’t put up with South Dakota’s remoteness and harsh winters. Then Ted decided to move Gateway’s executive offices again, to a San Diego residential suburb called Poway, so employees living in San Diego’s suburbs wouldn’t have to commute into the city. Meanwhile, manufacturing was still back in South Dakota, along with the cow-spotted boxes. The company was schizophrenic.

Another example of corporate schizophrenia was Jeff’s decision to “think outside the box”: sell not just a box full of hardware but also sell service.

Gateway’s revenues plummeted, Gateway’s profits suddenly started turning into huge losses, shares of Gateway stock became nearly worthless, and Ted Waitt became non-rich.

To be fair, you can’t blame all of Gateway’s problems on Jeff: the whole computer industry had a tough year in 2000, when consumers decided that the new computers weren’t different enough from old computers to be worth upgrading to. But Jeff’s moves were in the wrong direction.

In January 2001, a year after Jeff took over, he gave up — resigned — and Ted Waitt became the CEO again.

But it was too late. Gateway had lost its luster. The prince and king of mail-order had become a pauper.

Upon becoming CEO again, Ted’s first act was to run an ad bragging that Gateway would match the prices of 6 big competitors: IBM, HP, Compaq, Sony, Toshiba, and Dell. That ad was stupid. Gateway was supposed to be a mail-order discounter: all it can brag about is that’s not more expensive than retail? The ad bombed. So did the company. In 2001, Gateway made no profit. In fact, it lost a billion dollars. That’s a lotta moolah muck!

It’s strange that the USA’s average mom-and-pop tiny business, which makes hardly any profit, nevertheless makes more profit than a huge company such as Gateway.

Here are Gateway’s statistics:

Now Ted is in the process of laying off employees, closing international sales offices, and making Gateway a tiny company. By the time this book was written (July 2002), Ted had cut half the staff, so the number of employees is down to 12,000 — and continuing to drop.

(Ted, I wish you luck. I also have a suggestion for you, which I’m sure you’ll ignore. If Gateway wants to offer good service cheaply, why not just include tutorials from The Secret Guide to Computers in the cow box? Page 9 of this book says reprints are free.)

I feel sad about Gateway. I was one of the first journalists to recommend Gateway. I’m sorry to see Gateway go downhill.

The seeds of Gateway’s downfall were already planted back in December 1993, when Gateway went public. That’s when Gateway first lost sight of its roots, raised prices (to make the stockholders happy), and I stopped recommending Gateway: I switched to smaller, hungrier companies instead.

Contacts

Here’s how to reach Gateway — what’s left of it.

Keyboard

Some Gateway computers have come with the AnyKey keyboard, which is manufactured by Maxiswitch and completely programmable: you can program any key to do any function. For example, if you don’t like the SHIFT key’s location, you can program a different key to act as the SHIFT key.

Unfortunately, that feature is too fancy: many beginners accidentally hit the Remap key, which then remaps all the other keys so no key works as expected! Beginners have trouble finding the instructions that explain how to reset the keyboard to act normally again.

Worry no more! Here are the instructions for how to make your AnyKey keyboard act normal again:

 

Here are other choices to consider.…

Industrial nuts

To get the lowest computer prices, many people have been phoning a secret group of amazing companies advertising in Computer Shopper. The group is called the industrial nuts because the employees are industrious, the prices are nutty, and the location is these two Los Angeles suburbs: “City of Industry” and “Walnut”. The owners and employees seem mostly Chinese.

Recently, most of those companies shut down, but the following are still in business:

ProStar, Sager, and HyperData sell notebook computers.

These 21 industrial nuts have gone out of business:

Cleveland commandos

In 1997, Computer Shopper was deluged with ads from a horde of companies in Cleveland and its suburbs. Those companies offered low prices, nearly as low as the industrial nuts. Recently, most of those companies shut down, but the following are still in business:

Those companies have advertised under alternative names:

Those alternative names are no longer used.

These 15 commandos have dived to their death and gone out of business:

Micron

Micron is one of America’s biggest manufacturers of RAM chips. Recently, Micron began selling complete computer systems also.

Its computers come with lots of RAM (since the RAM chips cost Micron nearly nothing) and run fast. According to surveys of computer users by PC World, Micron’s computers are extremely reliable. Micron used to be excellent at answering tech-support calls and resolving problems immediately, but at the end of 1995 Micron’s tech-support staff started becoming overloaded. To reduce the overload, in February 1996 Micron started a new nasty policy: tech-support about software is now restricted to just 30 days. Micron’s prices are high, like prices from Dell.

Micron bought a competitor called Zeos and phased out the Zeos name. Micron’s in Idaho at 800-700-0591 or 208-893-8970.

Quantex

For many years, I recommended Quantex computers, because Quantex computers were high-quality but priced low. Of all the quality-oriented computer companies, Quantex charged the least. Occasionally, Quantex offered poor technical support, but in most months the technical support was fine.

That changed in January 2000, when many people who worked for Quantex technical-support department quit, to work for another company that paid higher. Also, though Quantex offered wonderfully fancy computers for about $2000, Quantex wasn’t creative enough in developing computers priced at $1000, which was the price most consumers were starting to demand.

Quantex and its sister companies (CyberMax, Pionex, Micro Professionals, and Computer Sales Professional’s PC Professional) were all secretly owned by Fountain, which was based in New Jersey and Taiwan. In August 2000, Fountain went chapter-11 bankrupt. Quantex is still in business, but barely, and it hardly ever answers phone calls anymore. Stay away from Quantex until it gets its act together again, if ever.

Acer

Acer is a consortium of Taiwanese computer companies.

It has 20 factories, sells computers in 90 countries, and has annual sales of about 3 billion dollars. Acer computers are particularly popular in Southeast Asia and Latin America.

Acer makes “Acer computers” and “Acros computers”. They’ve been sold mainly through computer stores and department stores, but recently Acer gave up trying to sell through department stores.

Acer supplies parts for other brands of computers. Acer also sells by mail-order at 800-230-ACER, but Acer’s prices aren’t low enough to compete against mail-order companies.

AST

AST is a big computer manufacturer in Irvine, California.

“AST” stands for the names of its founders, “Albert, Safi, and Tom”. Albert and Tom have left AST, which is now headed by Safi.

Computer-trivia question: what’s Safi’s last name, and how do you spell it? Answer: Qureshey.

AST builds fine computers, sold through computer stores and priced below computers from IBM & Compaq, though above mail-order.

In 1993, Tandy (which owns Radio Shack) stopped building computers and sold its factories to AST. For a while, AST manufactured all Tandy and Radio Shack computers and also Dell’s notebook computers.

Recently, Radio Shack and Dell have switched from AST to other suppliers. AST’s finances are shaky.

Packard Bell

Packard Bell was the first company to successfully sell cheap IBM clones through department stores. In November 1999, Packard Bell went out of business, but its influence lives on. Here are the details.

Packard Bell marketed mainly to average Americans in the early 1990’s, when Americans were starting to get curious about computers but didn’t understand them and didn’t want to spend much. Since the average American avoided computer stores and feared buying a computer by mail-order, Packard Bell sold cheap clones through chains of discount department stores (such as Sears, Walmart, Sam’s Club, Lechmere, Price/Costco, Staples, and Office Max). Department stores had been afraid to sell computers, because the stores didn’t want to deal with repairs; but Packard Bell told the stores, “Don’t worry: if the computer breaks, we’ll fix it, and we’ll handle all tech support.” So the department stores tried selling Packard Bell computers. They were priced about $1000 (which at that time was much cheaper than other brands). They were popular because they were cheap, available in department stores, and included 15 easy-to-use programs, loaded already on the hard disk, for immediate access. The programs included games, tutorials, educational experiences, and simple productivity tools (such as Microsoft Works, which included a word processor, database, spreadsheet, etc.).

To keep the advertised price low, Packard Bell typically included a poor monitor (.39mm dot pitch, interlaced) or didn’t include any monitor at all. Also Packard Bell provided programs on the hard disk but not on floppy disks: if you accidentally erased the hard disk, you lost the programs!

During the early 1990’s, getting a Packard Bell computer repaired was tough. I wrote this comment in the 1990 edition of The Secret Guide to Computers:

By 1993, Packard Bell improved slightly, but then Packard Bell’s phone-support center got wrecked by the earthquake in Northridge & Los Angeles in January 1994. Customers who called after that got just circuit-busy messages.

In July 1994, Packard Bell moved its support center to Utah, which has fewer earthquakes. The support center was in the town of Magna, a suburb of Salt Lake City. But if you tried phoning Packard Bell’s support center, you still usually got a recorded message saying that all lines were busy and you should try writing a letter or sending electronic mail instead. But sending “electronic mail” was difficult when your computer was broken!

In 1996, Packard Bell began requiring most callers to call a 900 number instead for software help.

In spite of its questionable repair record, Packard Bell grew rapidly and became one of the biggest computer companies in the USA. That’s because Packard Bell had the right formula:

The name “Packard Bell” sounded good because it reminded consumers of the Bell Telephone companies, and consumers thought “Packard Bell” might be related to “Pacific Bell” or some other well-respected phone company — perhaps a merger between Hewlett-Packard and Ma Bell? To encourage that misconception, Packard Bell’s slogan was “America grew up listening to us.”

But actually, Packard Bell began as an independent company that never had anything to do with phone companies. Back in the 1950’s, some radios were built by a company called “Packard Bell”. In 1986, an Israeli tank driver (Mr. Beny Alagem) came to the United States, started a computer company, and bought the name “Packard Bell” from the radio company for $100,000 to make his new computer company sound related to a phone company. Some states required him to sell his “Packard Bell computers” with a disclaimer warning consumers that Packard Bell computers are “not affiliated with any Bell System entity”.

In surveys of customer satisfaction done by PC Magazine and PC World, customers who bought Packard Bell computers were much less happy than customers who bought other brands. Though the typical Packard Bell computer worked okay, if you did need a repair you’d get very frustrated trying to reach Packard Bell’s tech-support center.

But a few Packard Bell customers were thrilled with tech support! That’s because they bought their Packard Bell computers from computer stores instead of department stores, and the computer stores were willing to fix computers immediately without waiting for the customers to phone Packard Bell.

Eventually, Packard Bell became more traditional:

Packard Bell’s competitors eventually copied Packard Bell’s good features and avoided Packard Bell’s bad features, so consumers switched to those nicer companies and avoided Packard Bell. Finally, in 1998, Packard Bell ran into financial difficulties and couldn’t pay its suppliers. To bail itself out, it sold its stock to a Japanese company, Nippon Electric Company (NEC), so Packard Bell became owned by NEC and was called NEC Packard Bell. But in November 1999, NEC finally gave up trying to run Packard Bell and shut Packard Bell down.

Monorail

Monorail manufactured a wonderful computer that was the ideal compromise between being a desktop computer and a laptop computer.

Unfortunately, when the price of traditional notebook computers dropped, Monorail decided to stop competing. Now Monorail makes just boring computers, like everybody else.

VTech

VTech is a Hong Kong company that made wonderful low-cost computers under its own label and the Expotech label. In earlier editions, I recommended them.

VTech sold the Expotech label to a company called Telecom, which sold “Expotech” computers built by VTech, then sold “Expotech” computers built by competitors. If you have an Expotech computer, you can get repairs by calling the Expo Direct division of Motherboards Direct at 800-705-6342, where the sales manager is Tim Lilly, who worked at VTech and Telecom.

Bargain-brand computers

Bargain-brand computers are sold by discount department stores at low prices. Those computers cost so little because they’re crummy. Check the specs!

Here’s another reason why those computers cost so little: when you ask the dealer for help, the dealer will typically say “I don’t know. Phone the manufacturer.” But you’ll find that the manufacturer’s phone number is usually busy.

Before buying a computer, try this experiment: ask the dealer what phone number to call for repairs or technical assistance, then try phoning that number and see whether anybody answers!

Local heroes?

In many towns, entrepreneurs sell computers for ridiculously low prices in computer shows and tiny stores.

Before buying, check the computer’s technical specifications and the dealer’s reputation. If the dealer offers you software, make sure the dealer also gives you an official manual from the software’s publisher, with a warranty/registration card; otherwise, the software might be an illegal hot copy.

Used computers

A used computer whose CPU is slow (a 286) typically costs about $100. That price includes even the hard disk and monitor. Buy it from a friend, relative, or neighbor moving up to a fancier computer.

Further advice

For further advice, phone me anytime at 603-666-6644.