<< Back to Robb Report, Robb Report Collection October 2014

In 2004, classic car buff Bob Luther was scanning the classified ads when he spotted a sheriff’s sale in Fairfax, Va. At first he was lured by the promise of a two-wheeled Segway scooter. Then something else caught his eye: an Apple-1 computer. He did a bit of research on the 1976 model and discovered that it was one of just 200 original Apples ever built. He set his sights on the device, and bidding against one other interested party at the storage-facility auction, he snagged his prize for $7,600 in cash.

“I was ecstatic and cradled it in my arms and carefully carried it over to the trunk of my Toyota Camry,” says Luther, who bought the historic computer on the hunch it would be a good investment. His instinct was spot-on. Nine years later, in May 2013, another Apple-1 came to auction in Cologne, Germany. It sold for an astonishing $671,400—88 times the price Luther paid at the sheriff’s sale and a record for vintage computers at auction.

Not so long ago, vintage tech was the domain of eBay-swarming computer geeks who gravitated toward old Commodores and Atari joysticks. But the last four years have seen a serious run-up in prices, and vintage-computer collecting has evolved into an improbable niche in which international auction houses sell off obsolete equipment for hundreds of thousands of dollars. The area seems poised to grow over the next couple of years, with 2015 marking the 40th anniversary of Microsoft Corp. and 2016 heralding the big 4-0 for Apple. On October 22, Bonhams’ science auction will include an Apple-1. And Auction Team Breker, the Cologne auction house that handled the 2013 Apple-1 sale, will feature a 1975 MITS Altair 8800 at its November 15 science and technology sale. While landmark Apples are already exploding in price, some are predicting the same for the Altairs, which were the inspiration for Bill Gates and Paul Allen’s Microsoft systems. They also paved the path for Apple. The consensus is that—headline-making prices aside—they are part of a nascent and at times volatile market whose dealers are still feeling their way around the appropriate valuations.

“We’re really in the beginning of the new market,” says Nick Hawkins from Auction Team Breker. “It’s a developing market. It’s something that’s starting relatively slowly, but as all technology becomes more collectible in the future it will expand.”

One of the early indicators of this expansion occurred three years prior to Breker’s milestone $671,400 sale. In 2010, during vintage-computer collecting’s early days in the international commercial arena, a Christie’s London auction featuring an Apple-1saw the tech relic sell to a private collector in Italy for $212,267, a record at the time. The sale drew a guest appearance by the company’s cofounder Steve Wozniak, perhaps adding to its cachet.

(Continues on next page…)

Richard Austin, a Sotheby’s senior vice president and head of the books and manuscripts department in New York, believes that this fledgling market is largely driven by an obsession with the Apple brand. “Part of this is the Apple cult and the design aspects of Apple,” he says. “Apple is seen as transforming the computing experience for people.” The proof, he says, is in the 2012 auction he oversaw, in which an Apple-1, estimated at $120,000 to $180,000, sold for $374,500, besting the Christie’s record. This sale became what is widely seen as a tipping point for vintage-computer collecting. “Once you hit these benchmark prices of hundreds of thousands or millions it does invigorate the young market,” Austin says.

The sales were also part of a budding pop-cultural zeitgeist. The 2010 film The Social Network turned the origins of Facebook into high drama, while 2013’s Jobs featured a bona fide heartthrob in the starring role, with Ashton Kutcher playing Apple founder Steve Jobs. Walter Isaacson’s biography Steve Jobs was Amazon’s best-selling book of 2011 and inspired countless essays on Jobs’s prescient genius. This year, television shows such as HBO’s Silicon Valley and AMC’s Halt and Catch Fire added gloss to the grunge of tech start-ups, while AMC’s 1960s drama Mad Men built a season around the arrival of a behemoth IBM System/360 mainframe. Suddenly, the early, ungainly boxes have been transformed into cultural touchstones.

The Apple-1 was, of course, the brainchild of Wozniak, Jobs, and the lesser-known Ronald Wayne, who together created what is widely considered the first assembled personal computer. About 200 Apple-1s came out of the Jobs family garage and originally sold for $666 each. Roughly 70 of the bare-bones, green circuit-encrusted boards are believed to still exist, according to Mike Willegal of the Apple 1 Registry, a web site for vintage-Apple enthusiasts. Willegal opines that the rare 1973 SCELBI should be credited as the first accessible personal computer, but Apple zealots are likely to dispute that. At the very least, it might be agreed that the Apple-1 was one of the leading pioneers of contemporary personal computing.

“The Apple-1’s importance in history is that it convinced Jobs that there was actually a market that no one had ever seen for putting these computers in homes, schools, and businesses,” says Dag Spicer, senior curator of the Computer History Museum in Mountain View, Calif. It comes as no surprise that he suggests the “big boost” to this area of collecting occurred after Jobs’s death in 2011, when “the Apple-1 became the origin story of Apple.”

Commensurate with the Apple-1’s status, Breker’s 2013 record sale of the computing relic has taken on an almost mythological status among vintage-computer aficionados and, perhaps more important, is believed to have prompted an outpouring of new tech goods into this young market. Austin explains that the stunning sale price prompted owners of similar devices to come out of the woodwork. “When you get into the six figures,” he says, “people who might have something they’ve retained because of their jobs or interests pay more attention, and that material comes on the market.”

(Continues on next page…)

Others, like Luther, the intuitive collector in Virginia, are hoarding their cherished investments, anticipating a day when their value really skyrockets. In addition to the Apple-1 he purchased at the sheriff’s auction, Luther now owns a second example of the pioneering machine. The first one “barely fits in my safe-deposit box,” he says, adding that the other is stored in a vault. Like many vintage-computer collectors, Luther has personal ties to the tech world—his father worked for IBM. Other collectors, according to auction house representatives, have tended to be men in their 30s through 50s, often bankers, from the United States to Asia, Europe to the Middle East. James Hyslop, a scientific specialist at Christie’s London, is seeing some interest among science collectors who are usually drawn to objects related to key figures like Alan Turing and Charles Darwin. He sees it as “a healthy mix of the traditional auction market and new collectors.”

Luther fits into the latter category when it comes to computers. But he was a quick study. A search for the origins of his first Apple-1, which came with two canceled checks made out to Apple Computer, sent him on a pilgrimage of sorts, interviewing former Apple employees and friends of Jobs. He self-published a book, The First Apple, in 2013. Although there are no serial numbers to authenticate Apple-1s, many of the components carry a four-digit date code, and a few of the surviving machines bear a handwritten number on the back, believed to be an inventory tracking number applied by the retailer. “The history, paperwork, and provenance becomes super-important as well,” Luther says. Such related documentation—instruction manuals and other materials—has also become collectible in its own right. Perhaps the most extreme example was a batch of documents—an Apple Computer partnership agreement from 1976 signed by Jobs, Wozniak, and Wayne, a subsequent dissolution of contract (signed by Wayne, who left Apple 12 days after it was founded), and a certificate of authentication. Offered as a single lot, the documents surged past a presale estimate of $100,000 to $150,000 to sell for an astronomical $1,594,500 at Sotheby’s New York in 2012.

Even ephemera such as original Apple office building signs are bringing high bids: Bonhams New York recently sold a pair of those signs for $38,000. Cassandra Hatton, a senior specialist in fine books and manuscripts and space history, estimates that the Apple-1 coming up in Bonhams’ October science sale will fetch $300,000 to $500,000. “Because it’s such a new thing, people don’t really know what the fair market value is for Apple-1,” she says. “The next couple years will really help us figure out how rare the stuff really is, how many are out there, and what kind of market there is for it.”

(Continues on next page…)

Indeed, when it comes to pricing, vintage computers are proving as speculative as a tech IPO. In a June Christie’s New York auction, a 1958 microchip prototype designed for Texas Instruments’ Jack Kilby was estimated at

$1 million to $2 million, but it failed to meet its reserve and prompted some rumblings in the market. “It was a little too ambitious,” says Sotheby’s Austin, calling the valuation of such unique tech items a “guessing game.”

In addition, the perceived worth clearly depends on the buyer. Luther describes two camps: the “tech DIY guys” who require the obsolete machines to function, and the traditional collectors, who are concerned with the “patina, condition, and completeness of historic objects.” Hyslop of Christie’s notes that Apple-1s in working order are fetching much higher prices, while Austin says Sotheby’s has been offered Apple-1s which he has refused for not being in working condition.

It seems unlikely that a collector in either camp would want to flip the switch on one of these 38-year-old dinosaurs—let alone be advised to do so. “They’re all partly for investment, partly prestige items, for display,” Hawkins says, regardless of the machines’ unglamorous appearance. Says Hyslop: “I’ve seen people displaying Apple-1s in a frame to mount on a wall.” Hatton likens Apple-1s to fine art, saying “some are on loan in museums, some are stored in vaults, some are kept on display in their homes.”

Auction houses may of course be just one stop on the tech trail. Apple-1s, the more widely produced Apple Lisas, Altairs, and other chips worthy of being cashed in can be unearthed everywhere—from salvage yards to online computer trading hubs. Spicer explains that much sought-after vintage tech comes to market from computer company employees who took their work home, so to speak: “Silicon Valley is full of people with projects that they worked on sitting in drawers at home.”

Corroborating this, Austin imagines another wellspring of new material entering the market in the not too distant future. “A lot of the first-generation Apple employees are retiring,” he says. “It’s going to be interesting to see what comes out of their closets and garages.” And as anyone familiar with computer lore knows, garages can be particularly serendipitous places.

(Continues on next page…)

The Next Apple-1: Four Devices to Find Now

Mintel

In the 1980s, these terminals connected the French to an early online service—a forerunner to the Internet. There were five models, including a mobile device that plugged into car phones, and all are “very collectible and desirable in North America,” says the Computer History Museum’s Dag Spicer. They can be purchased for as little as $195, depending on the model.

Apple II

Produced from 1977 to 1993, the Apple II had one of the longest life spans of any personal computer and gave Apple liftoff as the company’s first mass-marketed, consumer-ready machine. Between 5 million and 6 million were produced, but Spicer says in another decade they could be quite collectible. They are selling for $100 to $3,000, depending on the model and condition.

Plastic iPhone Prototype

In 2007, Steve Jobs was said to have furiously reprimanded his team for producing a flimsy iPhone prototype, which proved to be far from scratch resistant. “The first iPhones had more of a plastic body,” says Sotheby’s Richard Austin, who believes that this backstory—which led Jobs to order that iPhones be made of scratch-proof glass—would make the prototype valuable. “If you had one of those, that could be incredibly interesting for people.” It is difficult to estimate what such a unique piece would fetch; however, if the 2012 sale of a factory-sealed, first-generation iPhone on eBay for $10,099 is any indicator, it will be significant.

Ricochet Modem

The 1990s wireless provider Ricochet used an external modem about the size of a pack of cigarettes. Attached to early laptops, it enabled users to get online while on the go. Collector Bob Luther believes the device could become important because it was “an early form of Wi-Fi.” Popular with DIY hobbyists, the modems periodically appear on eBay for next to nothing—about $20.