Apple Computer in the Portable Computer Market (A)

By Garth Saloner, Hank Chesbrough,
1992 | Case No. SM1A
John Medica settled into his chair in his new office. It was early April 1990, and he had recently been given his new assignment as Director of Portable Engineering for Apple Computer Corporation, a position which carried responsibility for all engineering development of Apple’s portable computers. Medica went through the most recent Dataquest market share information and found that it confirmed what earlier data had shown: The Mac Portable, introduced just last September, was not doing well. It was too big and too heavy. By contrast, Compaq’s LTE, which compromised on functionality to achieve a size half that of the Portable, had grabbed a 14.7% market share. The upcoming Senior Staff meeting would address this issue in detail, and Medica realized that he would be asked what he thought the Portable Engineering group should do in Apple’s next generation of portable products to remedy this situation. Medica had already been given the go-ahead for a project (code-named TIM) to develop two much smaller and lighter versions of the Mac Portable. The specifications were rigorous and the development schedule was very tight. Medica felt TIM would consume every engineering resource he had. He was concerned, however, that these two products alone might not be enough to satisfy the market. And TIM required miniaturization and packaging skills that were new to Apple. An intriguing additional project had recently been proposed. The proposal was to develop a third product, using an outside company to actually do the design, development, and manufacture of the computer. The Sony Corporation looked like the best prospect for such a venture. But working with an outside supplier for an entire computer had never been done at Apple before. It was risky and would be controversial within Apple, to say the least.
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