Kaypro KC1

Also known as the MC-10, see CVN deal below.

Kaypro Corp., meanwhile, is reverting to an earlier strategy by concentrating on the market for low-priced computers.

Andrew Kay, chairman and president of Kaypro, explained that mid-range vendors get pressured from low-end producers who compete on price and by companies selling high-end computers that compete on the basis of performance.

He said Kaypro fell Into this squeeze by abandoning its Initial strategy.

"Instead of coming down in price we kept enhancing the machines," he said.

So last week Kaypro announced the KC-1, a computer assembled in San Diego and with a suggested retail price of $895, complete with two disk drives and an operating system. The computer uses Intel Corp's first generation 8088 processor and is packaged to compete on a price basis with so-called clones built in Asia.

Kay said the company will also soon introduce a low-cost machine based on Intel's faster 80286 processor. But he said the new products would take time to have an effect on the bottom and predicted Kaypro, which is publicly held, would continue to lose money in June.
(San Diego Union, June 23, 1989)

Engineers at local computer manufacturer Kaypro Corp. appear to be busy, with company officials recently unveiling a new line of low-cost systems dubbed "The American Dream Machine."

Kaypro founder and acting president Andrew F. Kay said Tuesday that the new computer line offers a less-expensive computer alternative, suitable for either home or business use.

Now through the end of August Kaypro is offering a 30 percent price discount to local businesses, their employees and customers on the newly released KC-1 and KC-2 systems. The firm also plans a KC-3 computer model.

"We're trying to be very cost competitive," said company sales manager Jeanne Simmons.

While most computer systems in the market today carry a 90-day warranty, Kaypro's new line offers one full year of protection, with warranty work performed direct from the factory on Stevens Avenue.

In a market dominated by overseas manufacturing, the local firm's new direction also stresses the fact that Kaypro computers are stamped "made in America" and the firm's promotions stress that point. "We're sticking behind that," Simmons added.

Kay, a Del Mar resident, hinted at the development of a new low-cost computer system during last April's annual Kaypro Corp. stockholders meeting in Rancho Santa Fe. The company has recently experienced financial difficulties but is banking on the new line.

The firm is gearing up to produce "several thousand" of the new computer system models per month, Kay said. One model is designed to operate faster than the other, and design configurations allow the machines to be customized for different uses, Kay said.

All of the KC computers are compatible with systems made by International Business Machines (IBM) and come equipped with disk-operating system software developed by Digital Research.

Carrying a suggested retail price of $895, the KC-1 computer system - first introduced and shipped out to dealers nationwide in early May - is now offered locally at an introductory price of $626.50. Equipped with a central processing chip similar to the industry standard 8088 microprocessor[V20 MicroProcessor is hand written on the clipping], the KC-1 system comes complete with 640 kilobyte resident memory, two 5.25-inch floppy disk drives and 12-inch amber monitor.

Unveiled about two weeks ago, the firm's new KC-2 computer comes equipped with a faster microprocessor and one 1.2 megabyte floppy disk drive for 5.25-inch diskettes. Video monitors and monitor adapter cards cost extra.

"It's more of a build-up type machine, whereas the KC-1 is a complete system," Simmons said. The KC carries a suggested retail price of $1,195, but this summer's 30-percent discount offer reduces the price to $836.50 locally.
(Andy Warren Staff Writer, News clipping from David Kay)

CVN Deal

Kaypro Corp. said yesterday it has clinched a $3.6 million contract for 8,000 low-end personal computers from a Minneapolis cable television shopping channel reputed to be one of the country's largest.

Company executives said previously that the order from Cable Value Network was the second largest in Kaypro's history.

Stars To Go Video Centers, a manufacturer of video rental systems, ordered $20 million of custom computers back in 1986 for use in STG's point of sale system, said senior vice president and chief financial officer Joseph Marcell earlier. But Kaypro delivered only $18 million worth after Stars To Go went bankrupt. Kaypro later reserved $2.1 million worth after being told that payment for systems delivered would be delayed. STG started making $25,000 monthly payments earlier this year, said Marcello.

Marcello characterized the contract with CVN, which sells hundreds of products far below suggested retail, as "the most significant thing to happen to Kaypro in terms of sales in years."

CVN ordered the MC-10, formerly called KC-1. Introduced only a few months ago, the MC-10 is a low-end personal computer with dual floppy disk drives and an 8088 microprocessing chip, said a company spokesman. It retails at $895 and has been likened by the company to the Kaypro II, the basic low-cost computer that built Kaypro's reputation in 1982.

The MC-10 is XT-compatible, and Marcello earlier quoted a report from CVN dated July 17 evaluating Kaypro's model as "14 times faster than the XT machine."

"Shipments of our MC-10 personal computer system to CVN will begin in about two weeks," said Andrew Kay, chairman and CEO. "CVN expects to begin its Kaypro sales program on its network of cable stations later this month."

Marcello indicated previously that CVN might also be interested in the KC-2, an AT-compatible machine with single hard disk drive retailing for $1,088.
(Lorain Parsons, San Diego Daily Transcript, Unknown Date)