Bridging The Gap

B.J. Moore can't type, but he is betting on the health of the
electronic-typewriter industry. Moore, the 46-year-old president of San Jose,
Calif.-based Systel Computers Inc., thinks his gamble is pretty safe, because
his company's sole product has greatly expanded the -- typewriter's usefulness.

The Systel II -- there is no Systel I -- provides in one unit a half-page
display screen, word processing software that runs on the popular CP/M operating
system, and a disk drive for unlimited document storage. In short, it supplies
the word processing components the electronic typewriter lacked. And the add-on
unit, at $3,450, is half the price of most word processors being sold. Throw in
the cost of the typewriter and it is still a bargain. Says Datapro Research
Corp.'s Sharon Olsen: "Until recently everybody thought electronic typewriters
were all well and good, but what do you do with that hunk of expensive machinery
when you need a word processor?"

Systel first shipped its product in February and now moves more than 1,000 units
a month. It has a nationwide network of more than 200 office-machine dealers,
increasing at the rate -- about 50 a month; it has moved ito a new
75,000-square-foot facility, and it has jumped from 20 employees in January to
more than 150. "We sell everything we produce," says Moore.

In the surnmer of 1981, Systel's financial outlook, Moore concedes, "was not
particularly rosy." In fact, it was grim. Systel's first venture into high tech
had bombed.

The company was founded in 1980 when Moore, who spent 10 years as president of
Biomation Inc., a leading manufacturer of electronic test-and-measurement
equipment, teamed up with two other engincer entrcpreneurs, Samuel Schwartz and
Dan Hochman. They thought they had a winning idea for a business-oriented
microcomputer. Their Report/80 combined in one unit all the elements that other
desktop computer manufacturers usuall sold as muodules. But the product cost a
hefty $7,500 and never caught on. By August 1981, the fledgling company had
losses of $1.5 million. "We knew ww had to do something different," says Moore.

The idea for the Systel II arose when one of the company's directors, an
office-machine dealer, asked if there weren't a way to make a word processor out
of the electronic typewriter. "It was just a simple question with a very obvious
answer," says Moore.

The idea surfaced the first week in August. With the help of an outside
designer, an industrial psychologist who chose and conducted focus groups, and
office-machine dealers, the company had its system ready by the second week in
February.

Moore attributes the system's success so far to the fact that it is easy to use,
affordable, attractive, and "friendly." It is also flexible. With the flip of a
switch, the typewriter can be used without disturbing any word processing work
in progress. And the Systel can be unplugged from one typewriter and plugged
into another -- even if the machines are different makes.

It didn't hurt either that, through one of its directors, Systel was able to
sign a deal with Olympia U.S.A. that brought more than 7,000 Systel IIs to
market as the Olympia EX100.

Nor did it hurt that Systel was the sole contender in the field.

Other companies, such as Eatontown, N.J. -- based Syntrex Inc., market systerns
with word processing software, a screen, and storage for the electronic
typewriter. But Syntrex's Aquarius I costs $6,390, and includes a typewriter --
in this case an Olivetti branded with Syntrex's own label -- and a single
diskette. Although the Aquarius I interfaces with Olivetti and IBM, it clearly
does not have the flexibility of Systel, which interfaces with 18 models from
nine manufacturers. Syntrex's new low-end electronic typewriter with screen and
diskette -- the $4,795 Libra -- doesn't, either.

Recently, however, competitors have sprung up with the same concept as Systel's.
The newest is the Van Nuys, Calif. -- based Lexor Corp. Its Lexoriter Series
III, set for October, delivery, provides, the company claims, more storage on a
single disk than the Systel and allows the user to manipulate more text at a
time. And it costs $1,995. Says Dataquest's Clifford Lindsey, "It takes about 6
months to design a Systel, so I figure they'll have 24 competitors in 24
months."

Moore says Systel is ready to compete. He notes that Systel's CP/M operating
system makes more than 2,000 software programs available for the unit. And
Systel will offer a communications option. Besides, its established market
position gives it an edge. Adds Moore: "I think that when prices reductions can
be made, we'll be right there among the leaders " Published on: Oct 1, 1982