Macintosh Classic

After Apple co-founder Steve Jobs left Apple in 1985, product development was handed to Jean-Louis Gassée, formerly the manager of Apple France. Gassée consistently pushed the Apple product line in two directions, towards more "openness" in terms of expandability and interoperability, and towards higher price. Gassée long argued that Apple should not aim for the low end of the computer market, where profits were thin, but instead concentrate on the high end and higher profit margins. He illustrated the concept using a graph showing the price/performance ratio of computers with low-power, low-cost machines in the lower left and high-power high-cost machines in the upper right. The "high-right" goal became a mantra among the upper management, who said "fifty-five or die", referring to Gassée's goal of a 55 percent profit margin.<6>

The high-right policy led to a series of machines with ever-increasing prices. The original Macintosh plans called for a system around $1,000, but by the time it had morphed from Jef Raskin's original vision of an easy-to-use machine for composing text documents to Jobs' concept incorporating ideas gleaned during a trip to Xerox PARC, the Mac's list price had ballooned to $2,495.<7>

With the "low-left" of the market it had abandoned years earlier booming with Turbo XTs, and being ignored on the high end for UNIX workstations from the likes of Sun Microsystems and SGI, Apple's fortunes of the 1980s quickly reversed. The Christmas season of 1989 drove this point home, with the first decrease in sales in years, and an accompanying 20 percent drop in Apple's stock price for the quarter