How expensive the NeXT computers actually were?

4 Sep 2012 | in Steve Jobs history

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While I was busy doing research for the re-writing of my Long Biography of Steve Jobs, I came across an old link I had bookmarked some years ago: Éric Lévenez’s website. Lévenez is a fellow countryman of mine, who has a long history with UNIX and NeXTSTEP, as you can tell from his webpage. (I can’t say I share his aesthetic inclinations though). He has in his NeXT archives a couple copies of articles written in the early 1990s about the NeXT systems, in the French press. If you are interested in reading them, they are available on this nice dedicated page (look for “SVM” in the Magazines window).

The first article is from July 1989 and introduces the NeXT Cube and its operating system to the French, who still couldn’t buy the computers back then. The article has a very optimistic tone and doesn’t fail to recognize the technical superiority of NeXTSTEP. The tagline proclaims “Why it won’t be possible to design, develop on and use a computer the old ways after NeXT”.

Lost among the technical specs is an interesting table comparing the prices at which the company sold its four computers in the US:

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The five rows represent the five configurations of the NeXT systems that could be bought. The two columns represent the University price and the Businessland (NeXT’s retail partner) price —which as you can see cost 50% more. The configs were:

All these Cubes (or “NeXT Computers” as they were called back then) came with the 25 MHz Motorola 68030 processor.
So how much did these beasts cost? Let’s find out.
As you may know, Wolfram|Alpha (the search engine that powers some of Siri’s requests) can calculate the value of a dollar from the past. Here’s what we get for the $6825 entry price point of NeXT —only for the Education market:

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$12,600, and around $18,500 for the retail entry price point. I played around the Apple Online Store to try to find out a config that would reach such a price today. I came up with the following: a 12-core Mac Pro with 64GB of RAM, two 512GB SSDs and a 2TB hard drive, two SuperDrives, and a Quad-channel PCI Express card; of course complete with a 27-inch LED Cinema Display (the NeXT came with a display too).

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And this is just the base configuration, discounted for universities! The top config (Server) amounts to $44,000 in 2012 dollars…
Of course, it makes little sense to compare technologies twenty years apart, given the advancement of hardware manufacturing and how it led to price shrinking. It does however give an idea at the type of market the NeXT computer was aiming at. It was designed for universities, but because of its high price tag (and Steve Jobs’s greater ambitions) was later retargeted at corporations and professionals. It was even rebranded as a “personal workstation” in 1990.
Let’s look at Apple’s concurrent offerings to illustrate that point, since the fruit company sold both home computers (Macintosh) and workstations (Quadra) back then, as it still does today (iMacs and Mac Pros). By having a look at Mactracker (and Wikipedia), I came up with the following Macintoshes for my benchmark:
  • the Macintosh SE/30, introduced in January 1989 for $6,500, came with a 16 MHz Motorola 68030 and 1MB of RAM built in
  • the Macintosh IIcx, March 1989, $5,369, 16 MHz Motorola 68030, 1MB RAM
  • the closest to the NeXT Cube is the Macintosh IIci, launched in September 1989 (one year after the NeXT Computer) for $6,269 with the same processor, the Motorola 68030 running at 25 MHz, and 1MB RAM in the default config
You see where I’m going with this. Compared to the machines of its time, the NeXT Cubes were not exaggeratedly overpriced. For example, the entry level education Cube cost about 20% more than the Mac IIcx, but with over 50% processor speed, 8MB of RAM and a stunning 17-inch display. Because the Mac did not come with a display! For that you had to pay an extra $2,000… Now for the killer argument, let’s put these competing systems side by side:
Which one looks like a totally lame PC that you’ve seen too many times in the 1990s? And which one looks so cool that it could be Darth Vader’s computer? And still, I was kind enough to put up a photo of the IIcx with a monitor on top. It looks even lamer without it. Enough said.
Now, to be fair to the Mac, the Cube had its downsides. First, even though NeXTSTEP was ten years ahead of the Mac OS, it was also much slower and buggier, especially in 1989. Most people consider it became reliable only in 1990 —after all, version 1.0 was introduced in September 1989, eleven long months after the Cube introduction (think about that for a second). The Cube’s default optical drive was also a bummer, with its very limited and widely incompatible optical drive, a technological bet that would certainly cost a lot to NeXT.
But the Cube’s main weakness was its platform. Indeed, NeXTSTEP was a new OS, and when it came out, Windows and the Mac OS already had huge installed bases, with the variety of software that come with it. To compete, the NeXT platform had to offer attractive, plentiful software that would make its computers shine. Steve Jobs understood this very well. Not only did the NeXT Computer come with great bundled apps such as (the direct ancestor of today’s OS X equivalent – in 1989!), the WriteNow word processor, a full version of Mathematica, the Digital Librarian (sort of an ancestor to Spotlight for text files), and a Digital Library that included the complete works of William Shakespeare and Webster’s Dictionary and Therausus; but it was the most advanced and effective development platform of its day, with its object-oriented programming and Interface Builder tool. The goal of making app development compelling was at the heart of the NeXT system, because of the strategic importance of having a critical mass of software available to attract users. Today’s Xcode is a proud descendant of NeXTSTEP’s development environment.
Why didn’t it work? For one, let’s not forget switching costs. If you were an advanced Mac user in 1989, why would you switch to NeXT, with all the time and money you had invested on the Mac OS? Not to mention if you were a company or a university… Of course, the high price tag of the NeXT Cube limited its appeal only to such users and developers, who had in turn no hope of selling their software to home users.
So who ended up buying NeXT machines? Companies and institutions who developed their own tools, and who were only looking for performance, regardless of the price. That included: financial services (yes, the Wall Street firms that are so much decried these days); research/medical centers; a handful of creative businesses; and governmental agencies such as the CIA, who were in fact one of the most prominent markets for NeXT. Those users really did leverage NeXT’s promise of “building mission-critical custom apps” easily and in “a tenth of the time” of its competitors (these were all slogans NeXT adopted in 1991, after the flops “personal workstation” and “interpersonal computing”). Unfortunately, these clients came too few, too late, and NeXT was doomed; the company closed its hardware operations in 1993.

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Steve Jobs selling OpenStep on Intel machines at Morgan Stanley, 1994

When you see where NeXT came from when it was purchased by Apple in 1996, it is probably easier to understand why the return of Steve Jobs to the company was not always welcome with cheers. How NeXTSTEP was used in the real world appeared the absolute antithesis of the Macintosh: an expensive, exclusive, professional platform for businesses and big institutions. So much for the “computer for the rest of us” of old —how could that system give birth to the next generation Mac OS? It turns out it not only saved the Mac OS but gave birth to its brilliant cousin, iOS.

If you’ve read this far, you probably are as hard-core a fan of Black Hardware as your fellow webmaster. Perhaps you remember that I mentioned a second article on Lévenez’s website. What was it about, you might ask? Well, it was a great relief for me, who sometimes wishes I could have lived during the NeXT days. Indeed, the second article was about the arrival of NeXT to the French market. The Cube was priced… 130,000 Francs of 1990 i.e. 18,000 USD of 1990 —almost twice the US price, and over $32,000 of 2012… Surprise, surprise, I don’t think I could have afforded them anyway!

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NeXT Cube on fire by Simon L. Garfinkel – the Cube’s magnesium was a great combustible material

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