The Apple III was powered by a 2 MHz SynerTek 6502A 8-bit CPU and, like some of the more advanced machines in the Apple II family, used bank switching techniques to address up to 256 KB of memory (512 KB with a third-party upgrade).
The Apple III was the first Apple product that allowed the user to choose both a screen font and a keyboard layout:either QWERTY or Dvorak. These choices could not be changed while programs were running, unlike the Apple IIc, which had a keyboard switch directly above the keyboard, allowing switching on the fly.
The Apple III had a System Utilities program, which allowed system reconfiguration and file manipulation. Another program, Selector III, was designed to integrate with the System Utilities program and launch various applications. However, Apple decided not to finish this project, and the engineers and writers working on the project bought the right to market Selector III to Apple III owners for a nominal fee. However, another company, Quark Software, developed a competing product, Catalyst, the cruder interface of which was offset by program-switching capabilities and support for copy-protection, which enabled companies to license users to run programs from a hard disk without worrying that their software might be backed up or copied without permission. When Apple decided to bundle Catalyst with its new ProFile hard disk, Quark celebrated—it eventually grew into a major software vendor with QuarkXPress); and the Selector III's developers quietly dissolved their company.
One popular anecdote about the Apple III is probably better remembered than the machine itself: in a technical bulletin, customers who were experiencing certain problems were instructed to lift the machine and drop it in order to reseat the chips. Another problem was that the circuit board used a "fineline" technology that was not fully mature, with narrow, closely spaced traces. When chips were "stuffed" into the board and wave-soldered, solder bridges would form between traces that were not supposed to be connected. This caused numerous short circuits, which required hours of costly diagnosis and hand rework to fix. Apple designed a new circuit board, with more layers and normal-width traces. It was designed by one designer on a huge drafting board, rather than a costly CAD-CAM system used for the previous board, and it worked.
Far more importantly, the machine was plagued by numerous hardware and software bugs. The real time clock, the first in an Apple computer, would fail after prolonged use. This chip, which was made by National Semiconductor, was an example of a recurrent problem. Semiconductor purchase contracts allowed a vendor 30 days to replace defective parts. It was assumed that a vendor would test parts before shipping them, but this was not required. National had a reputation for knowingly shipping bad parts, confident that they could do another production run before they had to send replacements. This was not a problem for customers who put chips in sockets and had extensive repair facilities. However, Apple was soldering chips directly to boards and could not easily test a board to find a single bad chip. Eventually, Apple solved this problem by deleting the real-time clock from the specification, rather than putting in a working clock chip.
Other widely experienced problems were due to the fact that the Apple III had no cooling fan (as suggested by Steve Jobs for quieter performance) or air vents. Because of this many Apple III computers were manufactured with heatsinks, but since the system had a metal case and chips crammed together with no air vents, it was impossible for enough heat to escape. Some users said that their Apple III became so hot that the chips started dislodging from the board, the screen would display garbled data, or their disk would come out of the slot "melted" (which was another reason why there are very few Apple IIIs left).
In the end, Apple had to replace the first 14,000 Apple III machines, free of charge. The customers who had bought them were given brand new machines, with new circuit boards. These did not constitute a new model: it was deemed warranty service. However for new customers in late 1981 it was a newly revised system, with twice as much memory (256K RAM) and sold for a much lower introductory price of $3,495. At the same time, Apple also introduced the optional ProFile 5 MB external hard drive.