Byte Shop

Byte, Inc.

Trade name	Byte Shop
Company type	Private
Industry	Retail Computer
Founded	December 8, 1975 (1975-12-08) in Mountain View, California, United States
Founders	Paul Terrell Boyd Wilson
Defunct	Template:End date and age
Fate	Acquired by Logical Machine Corporation
Number of locations	74

The Byte Shop was an early retail computer chain established in 1975 in Mountain View, California by Paul Terrell and Boyd Wilson. It holds the distinction of being the first retailer to place an order for Apple Computer’s initial product, the Apple I, in 1976. At its height, Byte Shop operated 73 outlets throughout the United States along with one store in Japan. In November 1977, Terrell sold the parent company, Byte, Inc., to Logical Machine Corporation, which continued managing the stores for several years thereafter.

Establishment and Growth (1975–1976)

The inaugural Byte Shop location opened on December 8, 1975, at 1063 West El Camino Real in Mountain View, California, founded by Paul Terrell. The store’s name was inspired by the influential microcomputer publication Byte, launched just three months earlier. Alongside partner Boyd Wilson, Terrell initially focused on selling microcomputer hardware, software, books, and magazines. The first month yielded sales totaling $7,000. Early obstacles included reluctance from suppliers due to small order sizes; this prompted a strategic shift toward bulk purchasing and exploring franchising opportunities by January 1976.

By February of that year, monthly sales had climbed to $40,000. On March 2, Terrell inaugurated a second store located in Santa Clara, California. In response to growing franchise interest, he established the holding company Byte, Inc. during March and announced plans to open a third store in Campbell by May 1976. A July 1976 article in Business Week spotlighted Byte Shop’s rapid expansion potential, attracting considerable venture capital and franchise requests. The chain accelerated growth by launching approximately eight new stores per month toward the end of 1976, with locations spanning California—including Palo Alto and San Jose—and expanding beyond state lines with outlets in Portland, Oregon and Minneapolis.

Before launching Byte Shop, Terrell and Wilson had served as Northern California sales representatives for Micro Instrumentation and Telemetry Systems (MITS), the creators of the groundbreaking Altair 8800 microcomputer. Terrell secured exclusive rights to distribute the Altair through Byte Shop but soon breached this exclusivity by stocking competitors such as IMS Associates (IMSAI) and Processor Technology products. As a result, MITS ended its dealer agreement with Byte Shop at the World Altair Computer Convention in March 1976. Despite IMSAI units outselling Altair machines two-to-one within Byte Shops, Terrell acknowledged that diversifying hardware offerings was essential to sustaining competitiveness amid the rapidly evolving microcomputer market.

Initial Commitment to Apple Computer (1976–1977)

Following the formation of Apple Computer, Inc. in April 1976, founders Steve Jobs and Steve Wozniak showcased their assembled single-board computer known as the "Apple Computer A" at the Homebrew Computer Club. Impressed by this product, Terrell agreed to purchase 50 units at $500 each on the condition that they were delivered fully assembled.

Jobs leveraged this purchase order to negotiate component supplies from distributor Cramer Electronics, persuading them to provide net 30-day payment terms based on Terrell’s commitment. The Apple team fulfilled production and delivery of the Apple I units on schedule. Although Terrell had anticipated receiving complete systems including cases and peripherals, he honored the $25,000 order—granting Apple vital early revenue and enhancing its credibility within the nascent computer industry.

Sale and subsequent developments (1977)

At the beginning of 1977, Byte Shop introduced its proprietary microcomputer model, the BYT-8, which incorporated an Intel 8080 processor alongside an S-100 bus architecture. This product secured approximately a 50% profit margin, surpassing the profitability of other third-party computers retailed by Byte Shop.

From 1977 through 1997, the number of Byte Shop outlets grew from 67 to a maximum of 74 locations, extending its presence internationally with stores in Canada and Tokyo. In November 1977, Logical Machine Corporation purchased Byte, Inc., including the entire Byte Shop chain, for $4 million.

As the personal computing industry matured, numerous original Byte Shop franchises evolved into autonomous enterprises focusing on specialized market segments. For instance, Byte Shops of Arizona rebranded as MicroAge Computers and became a prominent national distributor and retailer. Byte Shop Northwest held a dominant position in its local market until its acquisition by Pacific Bell in 1985. Founders Pat and Rick Terrell went on to create Leading Technology in 1985, manufacturing IBM PC–compatible monitors and systems. Additionally, Paul Terrell launched Software Emporium, a software retail chain operating in Northern California.