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Apple Inc.
Image Credit:  Apple Inc.

The Ill-Fated Apple III

Blue Arrow Archives Section:  Apple II Section Archives

Originally Published:  Apr. 2, 2007

Apple began designing the Apple III specifically for business users in 1978. It would be the first computer at Apple designed by engineers in a team environment. Apple I and Apple II had primarily been designed by Steve Wozniak. Apple was experiencing monumental growth during the late 1970s and was poised to take its stock public. The company was full of confidence. Apple was one of the largest players in the home computer industry, an industry it had a large part in creating.

Apple introduced "Sara" (its code name for the Apple III) on May 19, 1980 at the National Computer Conference in Anaheim, California. At a first look, the Apple III appeared to be a logical upgrade of the Apple II for use in professional applications like word processing and information management [1]. "It's also the ultimate hobbyist computer," said vice-president Steve Jobs in a 1980 interview with Byte magazine. "The Apple III was conceived primarily to fill the gaps in the Apple II. It will not replace the Apple II by any means. It's designed to enhance it."

Byte, July 1980
Image Credit:  Byte, July 1980

Despite Jobs' assurance that the Apple III was not intended as a replacement for the Apple II, Apple was becoming increasing concerned about the longevity of its cash cow. While Apple was enjoying great success in the marketplace, internally there was great anxiety that the good times would be short lived. How much longer could Apple milk variations on Woz's basic design of the Apple II? Compounding the concern over technical obsolescence was the fear that the Federal Communications Commission (FCC) would soon discover that the Apple II generated excessive amounts of radio frequency interference[2]. Apple had thus far avoided interference by the FCC by not providing a television adapter with the Apple II, instead opting for an RCA composite port. It was a clever trick to keep regulators from forcing Apple to shield the internal components of the Apple II like that of the Atari 800, which would drive up the cost of production and increase the weight of the device.

As far as Apple was concerned, the Apple II would be relegated to the home and education markets, while the Apple III, building upon its compatibility with the Apple II, would become the company's business solution[2]. Apple's new crop of engineers, having nothing do with the creation of the original Apple II, felt like they could do anything. Apple's revenues were soaring and it seemed the company could do no wrong. So with much fanfare in May 1980, Apple rented Disney Land for five hours at a cost of $42,000 and transported an estimated 7,000 National Computer Conference attendees to the site in British double decker buses to treat the visitors with a premiere of their new creation[3].

Apple III
Image Credit:  Teco

Apple was proud of the Apple III because it represented many firsts for the company. Foremost, it was the company's first attempt at building a powerful business computer[3]. Unfortunately, the Sara project had suffered from scope creep as features were continually being added by the many engineers and marketers involved.

The hardware issues began with the design of its case. Legendary designer Jerry Manock, the industrial designer responsible for the design of the Apple II and the Macintosh chassis, aided by Dean Hovey, completed the design for the case before the actual circuitry was complete. FCC guidelines for electromagnetic shielding were not yet available, so Manock and Hovey designed an aluminum chassis for the interior of the case, using space requirements initially given by engineers in an attempt to anticipate potential regulatory issues. The original design for the chassis remained the same, but changes were made to the Apple III's internal components; changes that were not anticipated by Manock or Hovey.

Byte, July 1980
Image Credit:  Byte, July 1980

As features grew, this chassis, already cast, became increasingly crowded. Steve Jobs insisted, as he had done with the Apple II and later with the Macintosh, that the Apple III not contain a fan to dissipate the heat generated from its densely packed components. Jobs considered the noise of a fan to be industrial and inelegant.

Byte, September 1982
Image Credit:  Byte, September 1982

The original Apple III used the 2 MHz 6502A processor. Custom large-scale integration (LSI) circuitry enabled the original Apple III to address up to 128K bytes of memory. The circuitry was housed inside an aluminum chassis that kept radio frequency interference in and conducted heat out[1]. Without an internal fan to circulate the hot air inside the Apple III's molded plastic casing, problems with overheating quickly surfaced once the Apple III made it into the hands of consumers.

One important feature of the Apple III was the addition of an internal 5.25 inch floppy disk drive. "We no longer consider the floppy disk drive to be a peripheral device. It's an integral part of today's computer systems," remarked Don Bryson, Product Marketing Manager, in an interview with Byte magazine in May 1980. The built-in 5.25 inch floppy drive was manufactured by Shugart. It was considerably faster than the Apple Disk II drive both because of its mechanical design and because of the more efficient disk controller and operating system built into the Apple III[4]. The decision to keep the video monitor separate from the processor unit was dictated by the fact that the computer would otherwise not be portable. "We wanted Apple III users to be able to take their machines home from the office at night," said Byron to Byte magazine.

The Apple III keyboard was an outgrowth of the Apple II's popular keyboard. Unlike the Apple II, the Apple III included a numeric keypad. Although the keyboard looked separate, it was actually part of the Apple III's main enclosure[5]. It used the same basic keyboard layout as the IBM Selectric typewriter, a popular piece of office equipment in 1980. Refinements included moving the Reset key above and to the right of the keyboard. A reset operation now required that the Control key be pressed along with Reset, thus eliminating a minor but irritating problem on the Apple II keyboard of accidentally resetting the computer with the slip of a finger[6].

There were four cursor-control keys on the keyboard for applications such as word processing, and raised "dimples" on the D, K, and 5 keys to help the user locate those keys by feel. The Alpha-Lock key enabled the entry of numerals in uppercase mode, and there were two user-definable keys for various software applications. Other handy features included built-in repeat on each key and a fast-repeat feature useful for filling the screen with characters. The Shift-Tab and Shift-Space operation could be programmed to act as Back-Tab and Back-Space, respectively[6].

Byte, September 1982
Image Credit:  Byte, September 1982

The Apple III had four Apple II-compatible slots for insertion of peripheral cards. Unlike the Apple II, the Apple III had a very complete array of connectors on the back of the computer. These included a special 26-pin flat ribbon connector for daisy-chaining up to three additional floppy disk drives; two DB-9 connectors for a silent dot-matrix thermal printer (Apple SilenType printer) or joysticks, etc.; a DB-15 video-out connector with a choice of black and white, NTSC-color, or RGB (red, green, blue) outputs, plus power supply voltages; an RCA video-out connector (black and white only); an external speaker jack that disabled the internal speaker when used; and an RS-232C serial I/O (input/output) port for a letter-quality printer, modem, etc. The Apple III also featured an event timer and battery-driven clock calendar[4].

Byte, July 1980
Image Credit:  Byte, July 1980

Byte, September 1982
A rear view of the Apple III and ProFile showing the SilenType and game paddle ports A and B, along with the video, audio, RS-232C, and floppy disk connectors. The peripheral card visible is the ProFile interface card. (Byte, September 1982)

The Apple III offered 80 columns by 24 lines of text on the monitor screen - a must for serious word processor software of the day. The character dot-matrix was 8 dots high by 7 wide. Graphics modes included 560 by 192 pixels (black and white only), 280 by 192 pixels featuring limited-diplay sixteen high-resolution colors or sixteen shades of gray, and 140 by 192 pixels featuring sixteen high-resolution colors with no limitations[7].

Byte, September 1982
A talented artist with a digitizing tablet and the appropriate software could produce results like this by using blended colors in the Apple III's 140 by 192 pixel color mode. (Byte, September 1982)

Byte, September 1982
Byte, September 1982
Two examples of the 140 by 192 pixel mode. (Byte, September 1982)

Byte, September 1982
The famous "running horse" demonstration. This display was generated using the 24-row by 80-column color-text display mode using the Apple III's programmable character set to produce the special shapes required. (Byte, September 1982)

Byte, September 1982
An example of the Apple III's 280 by 192 pixel limited 16-color mode. While there were some limitations on the combinations of colors that could be displayed next to each other, this mode offered the highest color resolution and was useful in many applications. (Byte, September 1982)

At the heart of the Apple III was the SOS (Sophisticated Operating System), designed to handle multiple languages and peripherals. SOS would eventually be transformed into ProDOS and used in future Apple II computers after the early demise of the Apple III.

Considerable effort was expended to make the Apple III as compatible as possible with the Apple II. An Apple II emulation mode was built into the Apple III. "The Apple II emulation is a true emulation," remarked Don Bryson to Byte magazine in May 1980, "You'll be locked into the 40-character uppercase mode." 80-column mode later became available in Apple II computers with the addition of an 80-column card. Although it had an Apple II emulation mode, the Apple III worked best with software written specifically to take advantage of its proprietary Sophisticated Operating System and new features, such as built-in real-time clock and video capable of generating 24 lines of 80-column text and up to 560 by 192 pixels in the monochrome graphics mode[3].

Byte, September 1982
An example of the 560 by 192 pixel graphics display mode. Although this mode didn't offer color, it was ideal for displays that required fine detail. (Byte, September 1982)

Originally, the Apple III was available in two different configurations. The initial offering was the $4,500 "Information Analyst" package, consisting of an Apple III with a Trendcom silent 80-column dot-matrix thermal printer; 96K RAM, black-and-white monitor; a special version of Visicalc, called Visicalc III; SOS; and Extended BASIC. The second version, called the "Software Development System," ranged in price between $4,500 and $8,000. The $8,000 version included a word processing package featuring a letter-quality printer; an extra disk drive; a high-quality monitor; a word-processing software package; and a training course offered through Apple dealers[7].

"The Apple III was conceived to fill in the gaps in the Apple II. One small technical deficiency (40 columns instead of 80 columns) prohibited us from entering some of the markets we wanted to go after," said Steve Jobs to Byte magazine in May 1980, "The Apple III compliments the Apple II, but the Apple II is still better for some things. I see it continuing to carry the educational and low-end professional markets."

Personal Computing, December 1985
The Apple II was very popular in classrooms during the 1980s. (Personal Computing, December 1985)

The Apple III was Apple's first attempt to move away from the tried-and-true Apple II architecture. It would prove to be the company's first bona fide failure. Even though engineers repeatedly warned of problems with the Apple III, it seemed that no one in top management doubted the machine's eventual success. On paper, all the Apple III's specifications were impressive, but implementing them proved a humbling experience for Apple[3].

After announcing the Apple III in May 1980, Apple intended to begin shipping units in July, but production problems plagued the product though out the summer and into the fall. Steve Jobs compounded the problem by making last minute design changes, demanding one thing one day, and the opposite the next. Shipping delays threatened to mar Apple's initial public stock offering, so managers ignored the dire warnings of engineers who knew what would happen if they pushed the Apple III out the door before it was ready. As soon as units began to trickle into distribution in November 1980, the worst fears of the engineers were realized[8].

On February 10, 1981, Apple announced that the Apple III would no longer contain the built-in clock and calendar feature because National Semiconductor's clock chip didn't meet with Apple specifications. Apple dropped the price of the Apple III to $4,190 and gave a $50 rebate to everyone who had purchased an Apple III up to that date[8].

When volume shipments began in earnest in March 1981, other problems quickly surfaced. Approximately 20 percent of all Apple IIIs were dead on arrival because chips fell out of sockets during shipment. Those that did work initially often failed after minimal use due to overheating. Steve Jobs' insistence that the Apple III be fanless, coupled with the cramped aluminum chassis designed to reduce radio-frequency emissions without regard to the demands of the electrical circuitry was a recipe for disaster. As the computer was used, its chips got hot, expanded slightly, and slowly worked their way out of their sockets, at which point the computer simply died. Apple's solution was to recommend lifting the front of the computer six inches off the desktop, then letting it drop with the hope that the chips would reseat themselves. The problems with loose chips were exacerbated by short cables between internal components, non-gold connectors, and the circuit board manufacturer's change in the flux washing process that lead to latent corrosion[8].

"It would be dishonest for me to sit here and say it's perfect."

Mike Markkula, President and CEO of Apple Computer, Inc.
in an interview with The Wall Street Journal, April 15, 1981.

In response to the problems, Apple instituted a liberal repair policy, swapping brand-new Apple IIIs for bad ones on the spot, no questions asked. To everyone's dismay, the replacements often failed too[8]. One year after its celebrated introduction, the Apple III acquired the "lemon" label. Apple scrambled to save its premier business computer.

Apple Inc.
Apple ProFile hard drive (Apple Inc.)

Byte, September 1982
The redesigned Apple III was introduced in 1982. (Byte, September 1982)

By 1982, the problems were solved. The sockets had been changed and overheating was no longer an issue. The Apple III was re-released with revised software, and a brand new peripheral - the ProFile, a 5 MB hard disk drive[9]. The new Apple III came with 128K RAM standard. Apple replaced the 6502A processor with the 6502B processor. The 6502B microprocessor had custom external circuitry that provided a number of enhancements to the normal 6502 instruction set. These enhancements included an expanded addressing range, alternate stack and zero pages, and improved indirect addressing that was supported by a separate pointer. While a normal 6502B could address a maximum of 64K bytes of memory, the Apple III used bank switching to expand this range to a theoretical maximum of 512K bytes[10].

Byte, September 1982
The Apple III main board. The piggy-back-mounted board to the left of center is the removable main memory board. Using this board, the Apple III could be expanded to its full memory capacity without using up any of its I/O expansion slots. (Byte, September 1982)

Byte, September 1982
The ProFile with its top cover removed. The intelligent controller is shown on the left with the switching power supply beneath it. The HDA (hard drive assembly) with its sealed internal environment is mounted on the right. (Byte, September 1982)

Even after the Apple III had been revised, sales remained disappointing. Analysts estimated that Apple sold 3,000 to 5,000 units per month, just one-tenth the sales rate of the venerable Apple II. By December 1983, the Apple III had an installed user base of just 75,000 units compared to 1.3 million Apple IIs. The Apple III could not shake the "lemon" label it acquired shortly after its introduction. It was considered a pariah in the computer industry. Industry experts openly referred to the operating system by its distress-sounding initials, "S-O-S", although Apple preferred the phonetic nickname "applesauce"[11].

In a last ditch effort to revive the product, Apple replaced the Apple III with the $2,995 Apple III Plus in December 1983. The new model came standard with 256K RAM, a built-in clock that actually worked, a new logic board, SOS version 1.3, improved peripheral ports with standard DB-25 connectors, and a modified slot housing for easier card installation. Although the III Plus boosted the installed user base to an estimated 120,000 units, Apple abruptly dropped the line in April 1984 and quietly removed it from the product list in September 1985[11].

The decision to drop the Apple III marked a change in focus for Apple. Apple's top management took a close look at the Apple III fiasco. By late 1982, Apple was in the process of developing the Lisa and Macintosh (referred to internally as the Apple32 product family). The Apple II was still providing Apple with the bulk of its operating revenues. Apple made the prudent decision to expand the Apple II line. Released along with the Lisa in January 1983, the Apple IIe featured an 80-column text display and full upper- and lowercase keyboard. More importantly to management, it was extremely inexpensive to produce (logic board designer Walt Broedner is largely credited with lowering the chip count from 110 in the original Apple II to 31 in the Apple IIe). At the end of 1983, the Apple III installed base was just 75,000 after almost three years on the market. The Apple IIe was selling almost that many units a month[12].

Personal Computing, December 1985
In 1983, Apple upgraded the Apple II line with the introduction of the Apple IIe. A year later the Apple III was cancelled. The Apple IIe would remain in production until 1993. (Personal Computing, December 1985)

The Apple III was not a bad computer, and indeed, it was a somewhat better machine than its main competitor, the IBM PC. But it was boring. Randy Wigginston, who at age sixteen was one of Apple's founding employees said of the Apple III, "The Apple III was kind of like a baby conceived during a group orgy, and everybody had this bad headache and there's this bastard child, and everyone says, 'Its not mine.'" Apple users hoped for something more than incremental improvements from Apple; at the very least they expected something that would make them abandon their Apple IIs and hunger for the successor. The main legacy of the Apple III was to dampen the sense of invincibility that had arisen at Apple in its early years[13]. Along with the Lisa, the Apple III is one of the most rare of the old Apple computers still in circulation and it is highly sought after by collectors. Its short production run and curious story make it irresistible for collectors interested in Apple history. Vectromania


[1] Morgan, Christopher. "The Apple III." Byte Magazine July 1980: Page 50.

[2] Linzmayer, Owen. Apple Confidential 2.0. San Francisco: No Starch Press, 2004. Page 15.

[3] Linzmayer, Owen. Apple Confidential 2.0. San Francisco: No Starch Press, 2004. Page 41.

[4] Morgan, Christopher. "The Apple III." Byte Magazine July 1980: Page 52.

[5] Moore, Robin. "The Apple III and Its New Profile." Byte Magazine September 1982: Page 102.

[6] Morgan, Christopher. "The Apple III." Byte Magazine July 1980: Page 51.

[7] Morgan, Christopher. "The Apple III." Byte Magazine July 1980: Page 54.

[8] Linzmayer, Owen. Apple Confidential 2.0. San Francisco: No Starch Press, 2004. Page 42.

[9] Moore, Robin. "The Apple III and Its New Profile." Byte Magazine September 1982: Page 96.

[10] Moore, Robin. "The Apple III and Its New Profile." Byte Magazine September 1982: Page 98.

[11] Linzmayer, Owen. Apple Confidential 2.0. San Francisco: No Starch Press, 2004. Page 43.

[12] Linzmayer, Owen. Apple Confidential 2.0. San Francisco: No Starch Press, 2004. Page 17.

[13] Levy, Steven. Insanely Great. New York: Penguin Group, 2004. Page 124.