Osborne 1

A book publisher who wanted to break the price

Adam Osborne was a British-born chemical engineer who had turned to writing about microprocessors. His publishing company, Osborne & Associates, was bought by McGraw-Hill in 1979, and the technical manuals he had written had already sold in the hundreds of thousands. What he took from that business into hardware was a sense that buyers wanted a finished tool, not a kit to be assembled and a shelf of manuals to decode.

The machine was designed by Lee Felsenstein and announced in early 1981, reaching buyers on 3 April 1981. Its shape owed something to the Micro Star, a luggable computer shown at COMDEX in 1979, and a great deal to a price target: Osborne wanted to undercut everything else on the market by a wide margin. The case was moulded ABS plastic with a carrying handle, and the keyboard folded up to become the lid. The company advertised it as the only computer that would fit under an airline seat.

What the money bought

The Osborne 1 measured about 52 by 23 by 33 centimetres and weighed 24.5 pounds, roughly 11 kilograms. Inside was a Zilog Z80 running at 4 MHz, 64 KB of memory of which 4 KB was reserved for video, and the CP/M 2.2 operating system. Storage was a pair of 5.25-inch floppy drives, single-sided and single-density, holding about 90 KB per disk. The screen was a five-inch monochrome CRT displaying 52 columns by 24 lines, small enough that reviewers compared it to a postcard.

There was no battery. The machine ran from a wall socket through a switched-mode supply and drew up to 37 watts. It carried a serial port for a modem or printer and a parallel port that could be configured as IEEE-488. The 69-key keyboard detached on a cable, which mattered because the case had been built around portability rather than ergonomics.

The software was the pitch

The list price was $1,795, and the bundle inside the box was worth more than $1,500 at retail: WordStar for word processing, SuperCalc for spreadsheets, and the CBASIC and MBASIC languages, with dBASE II added to later systems. Reviewers did the arithmetic out loud. One calculated that after subtracting the retail value of the software, the computer itself cost about $265. The 500-page user manual covered the hardware, CP/M and every application in the bundle.

That combination, not the weight, is what sold the machine. By the end of 1984, Creative Computing concluded that the Osborne succeeded mainly because it arrived with a pile of bundled software rather than because it could be carried. Adam Osborne was blunt about the hardware itself, describing its performance as merely adequate and admitting it was neither the fastest microcomputer nor an expandable one.

Sales, and the limits of the design

The company sold 11,000 units in the first eight months and reached 10,000 units a month at its peak. September 1981 was its first million-dollar sales month. At the West Coast Computer Faire that April, InfoWorld reported that the Osborne booth was packed for the entire show, and that attendees agreed the machine advanced the price-to-performance ratio for microcomputers even while complaining about the screen.

The deficiencies were structural. The drives stored little, the display held only 52 columns, and the unit was heavy enough that its own designer described carrying two of them to a trade show as an ordeal. Osborne chose single-sided drives out of concern that double-sided mechanisms would suffer head damage in transit, and a single-density controller to hold the cost down. Neither choice could be upgraded cheaply later.

Imitators, and a bigger problem

The formula was easy to copy. The Kaypro II arrived with a nine-inch screen capable of 80 columns and double-density drives holding twice as much, and it took the market the Osborne had opened. IBM released its PC in August 1981, and the Compaq Portable in 1983 showed that an IBM-compatible machine could be carried too. Against that, a CP/M computer with a five-inch screen had nowhere to go.

Osborne's own answer was the Executive, which replaced the 52-column display with an 80-column one, and a further model called the Vixen. Both were shown to dealers and journalists in 1983 while still prototypes. The result gave the industry a phrase, the Osborne effect: customers postponing or cancelling orders for a current product because a better one has been announced before it exists. Osborne Computer Corporation filed for bankruptcy in September 1983.

Former employees have since argued that the neat version of the story is too tidy. The Osborne 1 had already been losing ground to the cheaper, larger-screened Kaypro, and internal decisions compounded the damage, including a scheme to build $150,000 of stranded motherboards into complete machines that consumed about $2 million. The phrase survived the company regardless, and it now describes a failure mode that every hardware maker plans around.

What it left behind

Two ideas from the Osborne 1 became standard. The first is that a personal computer is sold as a working package of hardware and applications, priced as one purchase. The second is that portability is a matter of whether a machine can be picked up and taken somewhere useful, not whether it runs on a battery.

Adam Osborne died in 2003. The machine he is remembered for weighed as much as a suitcase of books, needed a wall socket and displayed 52 characters at a time, and it still sold tens of thousands of units in its first year.