Bits Blog: Vintage Apple-1 Sells for Record $671,400

Apple’s stock price may be well down from its peaks last year, but the market for the company’s oldest computers continues to set records.

Emmanuel Dunand/Agence France-Presse — Getty Images Sotheby’s sold an Apple-1 for $374,500 last year. A few months later in Germany, one sold for $640,000.

An Apple-1 computer, made in 1976, sold for a record $671,400 on Saturday at an auction in Germany, including all fees and taxes, said Uwe Breker, the German auctioneer.

That surpassed the $640,000 record for an Apple-1, set last November at a sale at the same auction house in Cologne, Germany, Auction Team Breker. The fall 2012 sale was a sharp rise from the previous record price for an Apple-1 of $374,500, set in June 2012 at Sotheby’s in New York.

The high prices paid for the machines seem to be explained by the combination of scarcity, a fascination with the early history of the computer age, and the mystique of Apple and its founders, Steven P. Jobs and Stephen G. Wozniak. And some irrational exuberance in the prices, for a machine that can do very little and originally sold for $666 (about $2,700 in current dollars).

“This really confirms the value of Apple-1’s,” Mr.Breker said in an interview on Saturday.

The buyer, Mr. Breker said, was a wealthy entrepreneur from the Far East, who wishes to remain anonymous.

Part of the allure of the earliest Apple machines, Mr. Breker said, is not what they are, but what they represent. “It is a superb symbol of the American dream,” he said. “You have two college dropouts from California who pursued an idea and a dream, and that dream becomes one of the most admired, successful and valuable companies in the world.”

The anonymous buyer, who can afford to spend more than $670,000 on an old computer, seems to have enjoyed some version of the entrepreneurial dream come true, as well.

In an e-mail last week, and a later telephone interview, Mr. Breker said the original owner of the Apple-1 on sale was Fred Hatfield, a former major league baseball player in the 1950s, who died in 1998. I included that account in an article published on Friday.

Early Saturday morning, I received an e-mail from another Fred Hatfield, a retired electrical engineer living in New Orleans, saying he was the original owner of the Apple-1 that was auctioned on Saturday. Mr. Hatfield attached an image of a letter, dated Jan, 18, 1978 and addressed to him, signed by Mr. Jobs.

Mr. Hatfield had complained about the lack of software for the Apple-1, also commonly known as Apple I, and Apple had a trade-in program for Apple-1’s. The letter offered to exchange an Apple II computer for the older machine, and to send a check for $400 as a further incentive.

When I called Mr. Breker on Saturday, I asked where he got his information that the original owner was Fred Hatfield, the ballplayer. Mr. Breker said he recalled that he was told that by Mike Willegal, who maintains an online registry of Apple-1’s. Mr. Willegal said on Saturday that he did not recall saying Fred Hatfield, the Apple-1 owner, was the former professional baseball player.

In any case, Mr. Hatfield in New Orleans said he held onto his Apple-1 until earlier this year. Then, a young man from Texas in the software business, whom Mr. Hatfield would not identify, inquired. They negotiated a price — $40,000.

The Apple-1, Mr. Hatfield said, was not then in working condition. The buyer apparently put in some new chips and wiring, since it was a working model when it sold on Saturday. After picking up the machine, Mr. Hatfield said, the young man flew off to California to get the machine signed by Mr. Wozniak, who designed the Apple-1. That also enhanced its value presumably.

Told the of sale price, Mr. Hatfield said, “My God.” Then, he added, “Best to him. He’s the one who fixed it up and figured the best way to sell it for all that money. Evidently, he’s very good at this.”

Mr. Hatfield, 84, gives historic tours of New Orleans, his hometown. Not surprisingly, he’s a jazz fan. He said he planned to use his proceeds to pay for some good dinners and nights of music on Frenchmen Street.

“I figure I might as well enjoy the money I got from that old machine,” he said.

Apple-1 Computers Jump in Value at Auctions

“Of course,” Mr. Spicer added, “I could have paid off my mortgage now with what it would be worth.”

Perhaps so. Last November, an Apple-1, also commonly known as the Apple I, sold for $640,000 at an auction in Germany. That sale surpassed the previous record of $374,500 set only five months earlier at Sotheby’s in New York.

The astronomical run-up in the price of the original Apple-1 machines — made in 1976 and priced at $666.66 (about $2,700 in current dollars) — is a story of the economics of scarcity and techno-fetishism, magnified by the mystique surrounding Apple and its founders, as the company has become one of the largest, most profitable corporations in the world.

The next test of the Apple-1 market comes on Saturday, at the same auction house in Cologne, Germany, where the record sale took place last November.

Even the auctioneer, Uwe Breker, expressed some surprise at the price reached last fall. For this week’s auction, the reserve price — the minimum sale price — is $116,000, and Mr. Breker conservatively estimated the likely range from $260,000 to $400,000. “But we will see,” he said.

The auction market for the vintage machines, experts say, is thin and uncertain. For example, a nonworking Apple-1 failed to attract its reserve price of just over $75,000 at an auction last year in London. The record-setting auctions last year were of working originals, as is the Apple-1 going under the gavel on Saturday.

The sky-high prices suggest irrational exuberance. But technology historians say there is a rational appeal to possessing an Apple-1. “It is Apple’s creation story, the physical artifact that traces this incredible success to its origins,” said Mr. Spicer, a senior curator at the Computer History Museum in Mountain View, Calif.

The Apple-1, Mr. Spicer added, was instrumental in the early transition in personal computing from its hobbyist roots to becoming a huge commercial business. Others were there too, notably the MITS Altair, which was introduced before the Apple-1, and was the first personal computer that Microsoft’s founders, Bill Gates and Paul Allen, wrote software for.

But Apple proved to be the enduring computer maker. And its founders embodied the hobbyist-commercial shift. Stephen G. Wozniak was the hardware-hacking engineer and Steven P. Jobs, who died in 2011 after a battle with cancer, was the business visionary.

Apple-1’s are scarce. An estimated 175 to 200 were produced in the Jobs family garage in Los Altos, Calif. Mike Willegal, who maintains an online registry of Apple-1’s, has verified the existence of 46 of them. A software manager at Cisco, Mr. Willegal observed that there was a technical nostalgia to the Apple-1, recalling a simpler time in computing.

“No one understands a whole computer system anymore,” Mr. Willegal said. “But Woz” — Mr. Wozniak’s nickname — “knew that board inside and out, and some people do today.”

A computer motherboard with clusters of chips was all that the bare-bones Apple-1 offered. Users had to supply their own keyboards, monitors and power supplies. It had 4 kilobytes of memory; a basic MacBook Air has more than a million times that. It could be used to run primitive computer games and write simple programs.

The Apple-1 was a reputation-building entry, but it was the Apple II, introduced a year later in 1977, that would sell in the millions and establish the company’s business. When Mr. Wozniak was designing the Apple II, he was also handling customer service for the Apple-1, a distracting time drain.

After the Apple II went on sale, the company began an aggressive trade-in program, offering Apple II’s and sometimes cash incentives in exchange for Apple-1’s, said Bob Luther, who is writing a book on the vintage machines, “The First Apple,” which he plans to self-publish, with help from a Kickstarter crowdfunding campaign.

In his book research, Mr. Luther called Michael Scott, Apple’s president from 1977 to 1981, and interviewed him about the trade-in program. As Mr. Luther recalled, Mr. Scott told him, “If we had done a better job, you and I wouldn’t be having this phone call.”

“They just wanted the Apple-1 to go away,” said Mr. Luther, who bought an Apple-1 for $7,600 in 2004. (“Mine’s not for sale.”)

Auction prices for Apple-1’s have not yet settled on firm standards. But according to Richard Austin, head of books and manuscripts at Sotheby’s, who handled the auction of the Apple-1 for $374,500 last year, working machines in pristine condition with documentation command the highest prices. “And a story behind it helps,” Mr. Austin added.

The Apple-1 being auctioned on Saturday has a story. Its original owner was Fred Hatfield, a retired electrical engineer living in New Orleans.

The documentation with the machine includes a letter to Mr. Hatfield, signed by Steve Jobs, offering him a new Apple II and a check for $400 for his Apple-1, said Mr. Breker, the German auctioneer. Mr. Hatfield declined the offer, for whatever reason.

Mr. Breker is irritatingly discreet about the identity of the seller, saying only that he is a young American who works for a software company. “He brought it over here in a blanket,” Mr. Breker said.

This article has been revised to reflect the following correction:

Correction: May 25, 2013

An earlier version of this article misstated the identity of the original owner of an Apple-1 being auctioned on Saturday in Germany. The owner was Fred Hatfield, a retired electrical engineer living in New Orleans, not the Fred Hatfield who was a former professional baseball player who died in 1998.