Gone, But Not Forgotten

Besides price and performance, microcomputer buyers might do well to consider whether the company they buy from will still be around the following year.

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When a microcomputer company slides into the murky depths of Chapter 11, it rarely goes alone. Dragged along for the ride are its customers, who are left to scramble for parts, service, and, in some cases, software.

Take the cases of Osborne Computer Corp. in Hayward, Calif.; and Nutting Lake, Mass.-based Computer Devices Inc., maker of the Dot Personal Computer. In 1983, the two companies filed for protection under Chapter 11. Both are now reorganizing. Osborne Computer, in fact, filed its reorganization plan last winter and, says new president Ron Brown, "we're putting the company back together again and moving forward."

While Osborne Computer's 30 employees -- down from a high of 1,200 -- are still producing a few micros, the newly organized company, says Brown, will concentrate on distribution and will no longer manufacture or service machines. Computer Devices, which also makes portable printer terminals, is "investigating the possibility" of manufacturing the Dot again, according to Robert Reis, the company's director of sales and marketing.

But no matter what the eventual fate of these companies, the individuals who bought their products are, in the meantime, left holding the bag: A company that files for Chapter 11 protection is under no legal obligation to honor outstanding warranties or service contracts. "For all practical purposes," says Will Rogers, an attorney and administrator of the high-technology group in the Boston law firm of Gaston Snow & Ely Bartlett, "you're out of luck."

Rogers isn't saying anything that Stephen Carrig doesn't know already.

About a year and a half ago, Carrig, an Arlington, Va., consultant, bought an Osborne I. Since most of his work involves writing, and since he often does research at the nearby Library of Congress, a portable micro was, for him, "an absolute necessity." Like many people, Carrig wasn't too surprised when Osborne Computer filed for Chapter 11 in September 1983. Nor was he terribly worried. His machine, after all, had never given him a moment's trouble.

But a few months later, Carrig began having intermittent problems with one of his disk drives, a difficulty he dismissed as "spikes," or voltage surges, in the electrical lines. Shortly thereafter, the drive broke down completely. Carrig's first thought was to purchase another Osborne, a back-up unit that would let him continue to use the data he had already generated, as well as his existing software. But he found few Osbornes for sale. And the handful that were available cost more than he cared to pay.

Next he tried telephoning an Osborne Computer regional sales office in New Jersey to see if it had machines. "I finally got through to someone, and it sounded like they were talking in an echo chamber," he says. He was told, "We're bare to the walls. We don't have anything."

So, Carrig figured, he would get his machine repaired. That, he says, is when he discovered that "you're on your own." Because the Osborne's disk-drive assembly includes a custom circuit board, he couldn't simply order a standard part from the drive's manufacturer. Sears, Roebuck & Co. and Xerox Corp. had the right components, but refused to fix the drive. They would agree only to replace the faulty part for $400 or $500 -- a hefty fee considering that Carrig's machine, with software, cost only $1,995 in the first place.

Carrig decided to remedy the problem himself. He joined a local Osborne user group and spent hours on the electronic bulletin board consulting with other owners. He drove to a dealer 50 miles away and bought a technical manual. Since interest in the computer had spurred him into taking a few electronic courses, he took his Osborne apart and examined its innards. "I had it spread all over the dining room table," he says. "My wife about had a heart attack."

Finally he obtained a few names of local repair people from several dealers "There was a reluctance to work on the machine," he observes. "I never could schedule a time." And, to his surprise, estimates ranged from $40 for a minor adjustment to $400 for replacement. Eventually he found a dealer who patched up his portable for $40. Soon, however, the Osborne was returned to the shop. "I'm having problems [with the drive] again," says Carrig.

Carrig's dilemma, bad as it was, could have been far worse. Instead of purchasing an Osborne, he might have been one of the several hundred unlucky individuals who put their money on the Dot portable computer.

Since an insignificant number of Dots were sold -- Future Computing Inc., a Richardson, Tex., market-research firm, estimates fewer than 2,000 -- service and parts are much more difficult to obtain than they are for an Osborne. Users must rely on Computer Device's service division. Moreover, the Dot was one of the first micros to offer a nonstandard 3 1/2" disk drive, requiring special software, so programs for the machine are limited.

The difficulties that can crop up with one of these more obscure machines, says Doug Cayne, vice-president and financial analyst with Gartner Group Inc., a computer industry research and advisory firm in Stamford, Conn., roughly parallel those you might encounter if your Alfa Romeo conked out in an obscure hamlet in the middle of the country. Good luck, Charley.

By contrast, at the end of 1983, Osborne Computer had an installed base of more than 150,000 machines, according to Future Computing. The large number of Osborne owners fueled the growth of many businesses that manufactured and sold products -- such as interface boards, up-grades, and adaptors -- exclusively for the Osborne. Many of these companies, such as JMM Enterprises in Enumclaw, Wash., are still in business. Besides, most Osborne components are standard, off-the-shelf items.

Software that will run on Osborne machines -- both the Osborne I and the newer Executive -- is also plentiful in stores. And user groups around the country distribute, for a nominal fee, the many public-domain programs available for the machines.

Indeed, for Osborne users, maintains Gale Rhoades, executive director of First Osborne Group (FOG) in Daly City, Calif., Chapter 11 may have been an unlooked-for boon. At first, she says, "a lot of users panicked." But the months be fore the company filed for protection, she insists, were much more difficult thar those afterwards. "With the admission that Osborne was in serious trouble," she says, "we stopped getting a snow job [from the company's management]."

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