September 9, 2010 in Business

Early seller of Apple in Spokane saw company ripen

Clunky machines were $2,000 but popular with professionals
By The Spokesman-Review
 
Dan Pelle photo

Gary Klaue managed Electro-Mart of Spokane in the 1970s and 1980s when it was one of the first retailers of Apple computers. Here he is shown at a South Hill office where he works as a Realtor.
(Full-size photo)

In early 1978 Spokane businessman Gary Klaue smelled a possible hot product made by a small company in California. The company was Apple, and the product was a personal computer, the Apple II.

Up till then, computers were behemoths that filled a room and were used only by large companies.

Klaue, now 61, was general manager of Electro-Mart, one of Spokane’s best-known appliance retailers.

“I was looking around for the next big thing and I heard about the personal computer. So I contacted Apple,” he said.

Within several months Electro-Mart started selling the Apple II, considered by many the first computer to attract a following among individual users.

Notably, Electro-Mart’s store at Sprague Avenue and Freya Street became one of the first 15 anywhere to sell Apple products. At the time, Apple Computer only sold its products through other distributors and retailers across the country.

Thirty-two years later, Klaue can enjoy, from a distance, the excitement Apple has created with the planned opening of its first retail store in Spokane. The downtown Apple store is set to open later this month in River Park Square, a mall owned by the company that owns The Spokesman-Review.

The vastly different approach that Apple now takes in selling its products reflects the company’s smart instinct for remaking a utilitarian product into a fashion statement, Klaue said.

“It was a lot different back then. Nobody even knew what an Apple II was,” he said.

Klaue is quick to note that getting an Apple store in Spokane is more challenging today than it was to start selling the company’s products in 1978. It took nine years, from the time Apple opened its first retail store in Virginia, for Spokane to earn that status.

In 1978, it took much less time for Klaue to win the right to become Apple’s first – and for years, only – Eastern Washington retailer. He paid a visit to a tech trade show in Las Vegas and met with an Apple representative. The talks led to a handshake, and Klaue was ready to test his theory that Spokane was ready for the next big electronic thing.

Before long, the first of Electro-Mart’s bulky and expensive Apple II machines went on the shelves of its Valley store.

Klaue said he sold few of the Apple IIs. They were hardly portable and were designed to resemble a home appliance more than an electronic product.

It wasn’t until the first Macintosh computer arrived, in 1984, that consumers started paying more attention to Apple products. Up to that point, Electro-Mart sold lots of refrigerators, washing machines, stereos and TV sets. It was also the first Spokane company to sell VCRs.

“We started the first video tape rental service in Spokane,” Klaue said. That was started to promote sales of VCRs, he added.

The Mac that arrived in 1984 was the first computer to use a friendly graphical interface. It also introduced the use of a mouse to move items around on the computer desktop.

Back in 1984, the price of a Mac was above $2,000. Klaue said the first buyers were professionals, students and academics. And Electro-Mart didn’t have much competition selling Apple computers. That was several years before Apple began selling its products directly, and well before the company decided to roll out its splashy and fashionable stores.

In a few years the PC market took hold, with major national chains like CompUSA, FutureShop and Best Buy taking aim at smaller firms like Electro-Mart.

Electro-Mart started selling both PCs that used Windows as well as Apple computers. Roy Mortlock, who worked for Klaue at the time, said, “Selling computers was a cash cow for us, and stayed that way until the national chains came into the market.”

Those sales were boosted because the Mead and Spokane school districts both lined up for new Apple computers and signed contracts with Electro-Mart for maintenance and repair.

Later, over time, the school districts started switching loyalties. In 1998, Spokane school administrators started making the switch to Windows computers. Joe Austin, who was director of technical services at that point, said the reason was cost savings.

By 2000, the Klaue family, the owners of Electro-Mart, began seeing the writing on the wall. Klaue said the family chose to close Electro-Mart in part because “it was a harder business, and the margins just weren’t there.”

Today Klaue, like Mortlock, works as a Realtor.

Klaue said he doesn’t use an Apple computer. “I would, except our company market listing service doesn’t work on an Apple,” he said.


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