Computers: Home Is Where the Heartbreak Is

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All of those missteps have left Commodore International the leading small-computer maker, with some 60% of the market. Two million Commodore 64s, which sell for about $500, have been sold. Last week in Chicago, Commodore showed off a model called the Plus/4, which includes four basic business programs and will cost under $400.

The slowdown in the home-computer market is not surprising. While futurologists still talk about how home computers will one day turn on all your lights and raise your garage door, many home machines currently on the market do little more than play video games. Thousands of the low-cost computers that have already been sold are finding their way into closets. Asks Dennis Pelak, director of consumer research for Talmis, an Oak Park, Ill., market-research firm: "If you're not a game player and you don't have any children, is there really any reason to buy a home computer?"

But while sales of low-cost machines are off, higher-priced and more powerful personal computers that are often used at home are selling well. More and more consumers are looking for computers with greater versatility that can perform office functions like financial planning and word processing. Tandy's Radio Shack, for example, has seen a spurt in the sales of accessories that expand the uses of its low-cost Color Computer II. Says Tandy Chairman John Roach: "There is no question that the buyer is becoming more sophisticated and wants a more meaningful machine." Figures compiled by Dataquest, a California research company, project that sales this year of machines costing $1,000 to $5,000 will be 6.6 million, slightly more than those of less expensive computers.

Apple is perhaps the major beneficiary of the popularity of higher-priced computers. When the company's new IIc model was launched in April, President John Sculley was careful to explain that the $1,295 machine "isn't a home computer at all. It's a serious personal computer you can also use at home." Sales of the lie since April have been good, although they have been somewhat hampered by a shortage of important accessories like monitors. But Apple's older IIe model, which costs $650 in some places, is selling out. It may not open a garage door or turn on the kitchen lights, but for its price, it is extremely powerful. In fact, many stores complain that Apple cannot supply enough of them.

—By Alexander L. Taylor III.

Reported by Cristina Garcia/Chicago and Michael Moritz/San Francisco