Corner Computer Store Closing Doors -- Rivals Take Toll On Delphi

When Delphi Computers was born in Annie Searle's basement garage 12 years ago, personal computers were the Aladdin's lamps of a dawning Information Age.

Expensive, hard to build, cumbersome to use, PCs nonetheless had a magic quality that said, "Learn how to do this and you'll unlock the riddle of the future." Searle could sell a computer on the pledge that one built by her shop would do things over-the-counter units could not. She also sold computers on personalized support and on a rock-solid warranty.

Today, 4,000 Delphi computers and $14 million in sales later, PCs have become commodities - "microwaves with a mouse," as the 50-year-old doyenne of Seattle's computer business puts it.

Cheaper, ubiquitous and easier to use, computers have lost their mystique. People want personal service and support, Searle points out, but they don't want to pay for it. Customers who don't know the difference between one computer and the next shop discounters and superstores, and the ones who do know the difference go through mail-order outlets.

"Compaq can machine-build a computer on the assembly line in 19 minutes," she said. "I've never had a technician who could build a computer in 19 minutes."

So the mom of one of the region's prominent mom 'n' pop computer stores is hanging it up. Through the end of the week Searle will sell off inventory at fire-sale prices and close Delphi's Northeast 65th Street corner store for good. Searle has sold her network and service divisions to Jerry Hollerbach at ComputeRepair in Kirkland and will continue Delphi as a one-person operation focusing on the new technologies of tomorrow - wireless, multimedia, education.

"It will be a chance to get back to working with people in direct sales," said Searle, who this year was honored as a Woman of Achievement by Seattle's Matrix Table and in 1992 was named Woman Entrepreneur of the Year for the Pacific Northwest by Inc. magazine. At Delphi, she managed as many as 20 employees and felt she was getting out of touch with the technology side of the business.

Searle plans to offer help and expertise in her strengths - networking and educational systems - while dipping into whizzy new digital telephony, mobile computing, document management and optical imagery systems (converting paper archives to electronic form).

She's helping North Seattle Community College design a curriculum for work-force retraining in technology and is working on a Washington Commission for the Humanities project studying the impact of computers on the classroom.

"The excitement isn't in selling the box any more," she said. "Margins are punishing for straight hardware sales."

Steadily building sales from $22,877 in 1983 to $3 million-plus this year, Searle always managed to weather market fluctuations in the past. Today, competitive pressures are taking their toll. The Big Three - Compaq, Apple and IBM - account for half of all computer sales. Superstores - Ballard Computer, Computer City, Future Shop, CompUSA - and discount outlets such as Costco and Fred Meyer have gotten into the vanilla PC game as well, accounting for nearly a fourth of the market. Direct marketers like Dell and Gateway snap up 7 percent of the market, according to Dataquest, a San Jose, Calif., company that follows computer trends.

Locally, more competition is on the way. Texas giant Tandy Corp. is building an Incredible Universe megastore in Auburn. Magnolia Hi-Fi, the stereo chain, is adding PCs to its consumer-technology mix.

The leftovers don't leave much for outlets like Delphi to pick over.

When Searle and her husband, Leroy, started Delphi as a part-time venture, a 15-megabyte hard disk cost $3,000. They moonlighted in portable hard disks and did quite well: "You could make some money off the margins then," she said.

"I've had a great time," she said. "But I want to get back to being a doer rather than executive."

Searle's transition follows industry trends, said Ballard Computer Vice President Alex Peder.

"For places like Delphi, it's either get bigger or go small," said Peder, whose chain is adding eight stores. Equipment becomes obsolete so fast "it's practically outdated by the time you get it in stock," forcing sell-or-die inventory turnover, Peder said.

Peder credited Searle for "taking care of her customers" in her transition. A number of PC vendors have shut down and left town overnight, taking customer deposits with them. "Annie gets a pat on the back for handling things ethically," Peder said.

Searle said the list of Puget Sound dealers to whom she will send computer buyers who want assurances of reliable support is short. Large-volume superstores don't like to do it, and direct marketers, although they've expanded and improved support lines, often don't know what's inside the box, she said.

"A lot of our work is for people who can't figure out whether they've got the wrong port or wrong driver or wrong video card," she said. Computers are being marketed as easy to use, "but in reality they're still too hard."

The real question may be whether a computer sold like a toaster will work like a toaster.

"The multimedia segment does not allow the toaster analogy to hold water," said Ballard's Peder. Customers can't buy a new one when a PC breaks, and don't want to drop it off at the repair shop for two weeks. "There's no training classes for toasters, and no books written on the ToasterNet," he said.

"Day One you can make a lot of money selling computers," Peder said. "Day Two, you need the service and support mechanisms in place to keep the customers coming back."