The Big Flop
The Apple III was a huge failure for several reasons. The most obvious one was that its implementation was flawed, as the computer crashed for no apparent reason. The revised model still faced problems as Apple fixed the sockets on the motherboard, but the motherboard manufacturing process ended up being the real culprit. The Apple III was only fixed with the Apple III Plus, but by the time it was released, it had already become infamous for being a faulty computer. (And, by that time, IBM had already released its second microcomputer and main competitor to the Apple III, the PC XT, which cost less.) The Apple III Plus had a shelf life of only four months, as Apple decided to simply kill the Apple III.
The second major problem was that it was very expensive. The revised Apple III cost USD 3,500, plus the price of the monitor. If you wanted a hard drive, you would have to pay an extra USD 3,500 for getting the Profile 5 MB external drive. So, a complete Apple III system in 1982 would cost more than USD 7,000 (USD 16,700 in 2012 dollars).
The third problem is that it was not 100% compatible with the Apple II. The Apple III could run in Apple II compatibility mode, but it would emulate a basic Apple II without any add-on cards. This meant that Apple II programs would run in 40-column display instead of 80-column, even though the Apple III supported 80-column display, and the programs wouldn’t access all of the available memory. So, there were no incentives for companies to upgrade from their working Apple II systems with 80-column cards and memory expansion cards to the Apple III. In fact, you could buy a complete Apple II system for far less, and you would have many more programs available.
By the end of 1983, Apple had sold only 75,000 units of the
Apple III, while it was selling around this number of Apple IIe units per month. (Apple sold 1.3 million units of the Apple II and its variants by the end of 1983.)
According to Steve Wozniak, the problem with the Apple III was that it was designed by committee, meaning that the project didn’t have a leading engineer who decided how the Apple III would be constructed. What happened was that everybody at Apple gave their opinion about how the Apple III should be built, and when everything was put together, it was a disaster. Or, as Randy Wiggiton, one of the engineers, put it: “The Apple III was kind of like a baby conceived during a group orgy, and later everybody had this bad headache, and there’s this bastard child and everyone says, ‘It’s not mine.’”