Simple math from articles I've seen says about 100,000 units were made, and about $50M was spent on R&D.
But 100K units at $10K each is a billion dollars (1983) dollars. With the Lisa being discontinued in 1985, that's a billion dollars gross over roughly two years. Sure they did drop the price at various points, but that should also coincide with memory prices (and requirements) going lower, so certainly there was still some margin of profit to these that was greater than zero. It probably still had a non-zero profit margin up to the point where
they sold 5,000 Lisas to SunRem on consignment and decided to dump some 2700 units in a landfill as a tax writeoff, so that slightly lowers than $1B number to about $973M, which is still pretty damn huge.
I don't know if that 2700 number was taken from the 5000 units, or in addition to the ones on consignment.
Either way, that's between 100,000-7700 or 100,000-5000 units sold by Apple, so it's still nearing the $1B in gross from Lisa sales minus the cost to produce/market/ship them (and taxes) with only $50M in development costs (and 200 man years if you believe the ads.)
This
article pointed to by the Wikipedia article says, they were given to SunRem on consignment, which implies that Apple would still make some profit off these sales, and that SunRem didn't pay for them outright, but we don't know if the prices of those were under, or above, the cost of manufacturing.
For sure, the Lisa 2's required a ProFile (it's possible that Lisa 1's might be usable without a hard drive, I don't know, or perhaps it required a ProFile), and that added to the cost, and dumping the Twiggies and "upgrading" to the single Sony drive was a loss, but it was a one time thing.
The fact that a 2/10 was introduced with an improved I/O board and motherboard, indicated that they were looking forward to increased rather than decreased sales despite that one time loss to the Sony transition. So I suspect that the introduction of the Mac cannibalized sales of the Lisa, rather than the other way around, at least until MacWorks was released.
Certainly Microsoft and it's Windows 1.0 might have had some part to play (vaporware announcement in Nov 1983), but that was released in November 1985,
while the Lisa discontinuation announcement that Mike J. Posner just posted was from June 17, 1985. Sure, vaporware announcements would have played into lower Lisa sales. If anything, DRI's GEM was released in Feb 1985, a bit earlier than Windows 1.0, but still after the Lisa 2/10 was announced alongside the Mac. If anything Visi On was a more direct threat, being released Dec 1983 - but like the Lisa, it required 512K of RAM and a hard drive, so it couldn't have been that much of a threat. (Though, after all, "Nobody got fired for buying IBM", right?
Like the Newton (which wasn't super usable until the 130), if you look at LOS 1.0 and 2.0, since LisaGraf was pure Pascal at that point, they run much slower than LOS 3.0 where LisaGraf was rewritten in 68000 assembly - I can clearly see a dramatic improvement in response time between LOS 2 and 3 on real hardware as well as in LisaEm. (And yes, indeed, that assembly transition to essentially QuickDraw was essentially a backport from what the Mac team was doing, so kudos to the Mac team for that.)
Jobs quit Apple around September 16, 1985, (he wasn't fired, just like Apple didn't steal the GUI from Xerox, but rather bought it, he tried to get enough support to oust Sculley in return, but even after that the board didn't want him to leave) so the decision to scrap the Lisa was more than likely influenced/caused by him as that was 3 months earlier. Likely, in the same vein as trying to kill off the Apple ][ after advertising "Apple ][ Forever", even though it was making the most cash for Apple.
(Yes, the /// had a hand in the Apple ]['s downfall too, but separately, and weirdly enough the IIgs + GSOS was released which would have been a direct competitor to the Mac IIs, but that was in 1988, much later on, so Steve had nothing to do with that.)
I'm leaning towards thinking that Apple killed off the Lisa more because it was competing at the higher end with the Mac, and would just continue to cannibalize sales, I mean, why buy a 128K Mac when you could get a Lisa with a hard drive (much faster than the HD20, and you could boot off it), with a bigger screen, even though it was 30% slower (5MHz vs 8MHz) but a lot more RAM. (This was a similar situation that would later play out with the PPC Mac clones.)
Ironically, the bespoke MMU that the Lisa had was, what allowed it to run MacWorks and be more Mac compatible and give the Lisa a bit more life as a Mac, but in doing so, and because of that compatibility, it now flipped the tables, caused it to compete with the Mac and lower Mac sales from when the Mac was cannibalizing Lisa sales.
But all this is moot because by
Feb 1984 Steve had merged the Lisa+Mac teams, firing a lot of the Lisa folks in the process after calling them "B" players and "releasing some of [them] to give them the opportunity to work at our sister companies here in the valley".
We can only speculate what might have been had the Lisa been allowed to be developed further through the
Whopper ERS document, and eventually getting color, etc. and assuming it would get at least as good marketing/ads as the Mac, which it clearly did not.
[I don't believe SunRem had the SCSI card until Apple already sold off most of its Lisa stock to SunRem, so the SCSI compatibility that the 512KE had didn't play a part in the decision to end the Lisa. More likely SunRem's MFM 20M/30M/40M drives came before the SCSI card. So this would limit competition between the Lisa and the Mac upto the 512K, but not including the 512KE.]
So, then, how is the Lisa financially a flop when it brought something like $300M-$500M in profit for only $50M of development costs (depending on what margins it was sold at)?
I'd guess margins would be 25%-50%, from just what it is industry wide at that time (this was before the PC clones and the race to the bottom after all.)
Does anyone know the actual cost of manufacturing a Lisa, and what its profit margins were? How do these compare to the total sales/margins of the Mac 128?
Sure, sure, in terms of Wall Street forecasts, if you tell your investors you'll sell millions per year and only sell 100,000 in two years this really messes up your stock price forecasts.
Stonks and all that... But is that the definition of a flop, or just shitty forecasting from the sales/management teams?
I'm not discounting that the Mac sold 50K units in the first 100 days, but this was surely price/advertising driven more than anything else. Had someone tried a Mac vs a Lisa side by side, they wouldn't want a Mac unless they were willing to put up with a lot of slowness, floppy swapping, etc.
All this is, of course moot, because by
Feb 1984 Steve had merged the Lisa+Mac teams, firing a lot of the Lisa folks in the process after calling them "B" players and inviting them to "the opportunity to work at our sister companies here in the valley".
We can only speculate what might have been had the Lisa been allowed to be developed further through the
Whopper ERS document, and eventually getting color, etc. and assuming it would get at least as good marketing/ads as the Mac, which it clearly did not.
So, this
folklore article says they sold 72K Macs by April. But that's at the $2.6K mark - so thats less profit per unit despite that. This clearly is a case of being able to sell far more burgers than steaks (and using really great advertising vs the shitty ads/informercials for the Lisa).
This is similar to why McDonald's makes far more money than Ruth's Chris Steakhouse though they're both chains that sell some form of (as DEC sales engineers would put it) "warm dead cow" (which is why there's no DEC around anymore either).
Another analogy with hat tip to the Lisa's advertising is that, you'll sell far more low end Ford Escorts (or bicycles if you wish), than you would high end Maseratis for the Mind. Plus the whole high end corporate office vs "for the rest of us" vibe.
Even with the Mac's relatively higher sales over the Lisa, we see rose-colored glasses forecasting once the early adopters realized they got fleeced, and that the majority of the profits were coming from the Apple ][ line anyway:
High sales spurred even rosier predictions for the upcoming holiday season. But as summer turned into fall, Macintosh sales began to decline. For a couple of months, the University Consortium (see What's A Megaflop?) kept volumes high by selling tens of thousands of low cost Macs to college students, but by Thanksgiving 1984, sales had slowed significantly. The marketing team forecast selling over 75,000 Macs per month for the important holiday season, but actually they didn't even break 20,000 units per month. In December 1984, the Apple II still accounted for about 70% of Apple's revenues.
As the new year dawned, Steve Jobs seemed oblivious to the slowing sales, and continued to behave as if the Macintosh was a booming, unqualified success. His lieutenants in the Macintosh division, which had swelled to more than 700 employees, had to deal with a growing reality gap, reconciling the ever-changing audacious plans for world domination emanating from their leader with the persistent bad news from the sales channel.
Meanwhile, the Macintosh engineering team had not been very productive. The Mac was crying out for an internal hard drive, and some kind of high bandwidth port to attach it to, but there weren't any significant upgrades on the horizon, even though the basic hardware hadn't changed (except for additional RAM) for a year.....
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Topic: How bad were the Lisa sales when they sold 100,000-(5k-8k) at ~$10K each? (Read 16140 times)