Commodore History
There have been many questions about Commodore before they
went into liquidation. How did they start? What drove them to sell
their own specially designed system? How could they make so many
mistakes and never learn? Although I can't answer all these
questions (especially the last one), I can reveal what Commodore
were before the Amiga.
The tale begins in Lodz, Poland during 1927 where Jack Tramiel
was born. It was a time of great change for the country, in 1939,
when Tramiel was just 12 years old the German army invaded. Through
sheer luck, he survived the Auschwitz and Bergen Belsen death camps
to be one of only 970 of Lodz's 200,000 Jews to survive the
Holocaust. In 1947 he moved to New York, drawn by the idea of
running his own business in the country that could turn anyone into
a millionaire. In 1954 he decided to supplemented his army career
by fixing typewriters that had become jammed at the local base.
Tramiel realized the demand that there was for proper repairman
leaving the army and setting up his own typewriter repair business
in the Bronx, whilst working as a cab driver at night. The business
did not make a fortune overnight but managed to make a deal with a
company in Czechoslovakia to assemble their brand of typewriters in
Canada. Recognizing the opportunity he moved to Toronto and set the
foundations of what would become Commodore International. As the
company gained more experience and wealth in this industry Tramiel
realized that his profit ratio could be increased by cutting out
the middle man and selling his own typewriters, rather than
producing them for someone else. However, money was getting tight
as cheap Japanese models were overtaking the market. Realizing that
he could not compete with the swarms of foreign companies now in
the market, he moved the company into the relatively new market of
adding machines. Tramiel's market insight had taken the company
into a new direction.
In 1962, the company went commercial, calling itself Commodore
Business Machines, Canada. This company was led by Tramiel, with
the banker and chairman role being given to the president of
Atlantic Acceptance Corporation, C. Powell Morgan. Morgan was to be
condemned three years later by a Canadian royal commission for his
defiance of all accepted business practices" and acts of "rapacious
and unprincipled manipulation. He died of Leukemia before this
could be taken to court. The commission also examined Tramiel and
his company, and although they suspected Tramiels involvement, they
could not really prove anything. Unfortunately, the bad publicity
caused by this incident did not help Commodore, which made a
continued loss.
Commodore was saved from an early grave by a Canadian investor
by the name of Gould, Irving Gould. A name that has ingratiated
itself to many Amiga owners over the years in its own "particular"
way. Gould agreed to take a stake in Commodore, in return for the
position of Chairman. These events helped Commodore for a short
time, but it became increasingly obvious that the adding machine
business was becoming tighter, as the Japanese again came out with
cheaper, better models. Gould suggested that Tramiel should get
experience of the market situation in Japan. Whilst he was there he
saw the new electronic calculators. Commodore quickly moved from
the restrictive adding machines on to calculators, and made its
move into the electronics business.
After a few months Commodore began to makes a profit pioneering the
first electronic pocket calculator on to the market, finding itself
at the forefront of the first electronic boom. This victory was
short-lived as Texas Instrument; Commodore's chief chip supplier
launched their own brand of calculators, at a fraction of the cost
of Commodore own. The year was 1975; Commodore made a loss of $5
million on sales. Tramiel and Gould learned a major lesson- DO NOT
rely on outside suppliers. Tramiel later commented,
From there on, I felt the only way to continue in the
electronics business was to control our own destiny.
It was a lesson that Amiga owners are suffering even today. The
market had suddenly closed behind Commodore and they faced another
major crisis. Again, Gould came to the rescue with a $3 million
loan. This allowed Tramiel to take over the struggling MOS
Technology, Frontier, and MDSA in 1976. This gave Commodore the
power and experience to produce their own electronics.
In 1975 Chuck Peddle quit his job at Motorola and went into
business for himself, developing the 6501. This was an advancement
on the 6800,a chip Peddle had been designing in his previous job.
The processor's were similar enough to be pin-compatible with each
other. A fact that infuriated Motorola- even though they were not
able to run the same software the idea of a plug-in expansion led
the company to sue MOS Technology for millions of dollars.
For quite some time Tramiel had been keeping an eye on this
unfolding situation and offered to buy MOS Technology. Peddle
agreed and the company became MosTek. The purchase was a sound
one. Peddle convinced Jack Tramiel to look into the
possibility of a desktop computer, using MosTek's advancement on
the Motorola 6800, called the 6502. It became the most popular
processor of the 1980's, ranging from the Apple I to the NES.
Tramiel felt cautious about developing an entire system from
scratch and offered to buy Apple. Steve Wozniak was tempted but
felt Commodore had not offered enough for the company and wanted
$15,000 more. Tramiel refused- a horrifying thought that may have
resulted in the Mac never existing altogether!
Disappointed but anxious to get into the computer market, Tramiel
set Chuck Peddle the task of developing a computer. This resulted
in the development of the PET (the idea being that it would serve
the user, like a dog fetching the newspaper). It was first shown at
the Chicago Consumer Electronics show in 1977. After the show the
name's meaning was changed to an acronym of Personal Electronic
Transactor so that people would take it seriously. Working for 3
days without sleep, Chuck Peddle was under great pressure to
actually finish the machine for the show. Enthusiasm was high, soon
Commodore had over 50 calls a day from dealers desperate to supply
the demand for the machine. Commodore made sure that reputable
dealers, who could actually sell the machine and repair faulty
ones, only sold the system. As demand for the PET grew, so did
Tramiels thirst for profits. He arranged a deal between Commodore
and all of the major retail chains. The dealers were in direct
competition with the big boys. Tramiel had made yet another
mistake, by offending the independent dealers that had originally
sold the Commodore machine he made many enemies, who would never
sell another Commodore machine again. Many of those that remained
had to forfeit their "customer care" to compete. The PET had been
adopted as the computer of choice for many schools, years before
the standard was set by the government, but Commodore still wanted
to dominate the home market. At the time only the ZX81, Sinclair's
baby that could have stopped them. So, Commodore moved into the
home market launching the VIC-20. Although relatively basic in
design the machine was sold cheaply and had a great deal of
software support, beating even the ZX81 in popularity. The low
price point and cheap design tarnished Commodore's reputation and
the machine became a toy in the public eye. Tramiel struck back at
competitors with a string of price cuts. At its peak the Vic-20
sold for just $55, and were produced at a rate of 9000 per day.
The Commodore cash machine went into overdrive as millions of
people jumped onto the bandwagon. The Vic 20 was superseded by the
Commodore 64 - a comparatively expensive system (£350) -
launched during 1982. Commodore had learnt from their earlier
mistake, gaining a percentage of the C64 sales, through the
ownership of the 6502 CPU. However, the European market was slower
to accept the machine as a result of the high price demanded in
comparison to the alternatives. Its closest rival, the Sinclair
Spectrum, was almost half the price and appealed to the game
player, rather than the home office.
Unconcerned by the slow sales, Commodore launched a low end
version, the C16 and the Plus/4. Aimed at the home market, they
used the same processor as the C64 but reduced the memory back down
to 16K. Though technically inferior, they sold reasonably well for
a brief time but was unable to gain the popularity of the earlier
Vic 20.
As time progressed, the cost of manufacturing the C64 fell. In
conjunction with the strong software market that had developed and
the falling cost of the IBM PC, Commodore abandoned the notion that
the C64 was a business machine and aimed it at the game market. In
a brief, but entertaining battle, the C64 overtook the Sinclair
Spectrum in the market, exceeding expectations.
Events were not as happy behind the scenes, as Commodore boss,
Jack Tramiel became increasingly unhappy with his lack of control
over his company. In a statement released during January 1984,
Tramiel said, "personal reasons prevent my continuing on a
full-time basis with Commodore." He quit Commodore and bought
the troubled Atari Computers from Time Warner with the intention of
getting revenge on his former company by beating them to the 16-bit
marketplace. Tramiel saw this opportunity in the troubled Amiga,
Inc. Company, whose machine, the Lorraine was more advanced than
any other currently on the market. He quickly made a bid for the
company but did not want to pay the full amount expected, by
constantly dropping the amount he would agree to pay. Tramiel
wanted the technology created but he had no interest in the machine
or its creators, making the Amiga Inc. very wary of him. Meanwhile
Commodore had not let their technology become stagnant; at the
Hanover fair in Germany during 1984 Commodore International
launched their Commodore PC and the Commodore Z8000. Whilst the
Z8000 bombed, Commodore made some money on the PC. Not as much as
their 8-bit line but enough to make it profitable. They were also
producing a Unix compatible machine completely oblivious to the
events going on at Atari. At the last minute, less than two days
before they were to sign with Atari the troubled Amiga Inc. was
swept up from under the nose of Tramiel by Commodore, gaining the
technology and its creators in one swoop and began to create the
Amiga 1000.
Commodore were still reeling from Tramiels' exit. His
replacement, Marshall F. Smith initiated damage control as the
computer industry collapsed in on itself, cutting the payroll by
more than 45%. Although the company had an impressive $339 million
in 1985 Holiday revenues, it made only $1 million for the quarter
after paying off around a quarter of its bank debt. Commodore's
woes continued during 1985, as it lost $237 million. At this point
they may have gone to an early grave but for a one month extension
on loans granted by banks. This allowed time to reap the rewards of
the company's second-best Holiday sales, as the 8-bit line sold out
in many stores.
In March 1986, Thomas J. Rattigan replaced Smith as Commodore's
CEO. He cut the payroll further and three plants were closed in
five months. New controls were added in the finance department to
prevent the sloppy reporting that had undermined Smith's
leadership. By March 1987, Commodore had caught up on its loans,
posting a $22 million earning in the quarter ending December 1986.
It also had $46 million in the bank, the most profitable since
1983. With the company recovering from the crisis of the early
eighties and finally shaking off the ghost of Tramiel they moved on
to the next generation. However, troubles were not behind and the
companies financial edge was slowly eroded. Their only hope lay in
the Amiga, that quickly became known as the "save-the-company
machine."
To his credit Tramiel had always been a sound businessman,
having jumped from what he thought was a sinking ship. His rising
star was frustrated when Commodore wrestled the Amiga Corporation
from his fingers. Determined not to let his former company win,
Tramiel set about creating their own machine using off-the-shelf
parts and release it before the Amiga hit the shelves. The Atari ST
sold for nearly £600, compared to the A1000's £1500,
allowing the Atari machine to outsell the A1000. Most Amiga games
of the time were Atari ports as well, which initially made game
players more interested in the Atari. Problems were also abound in
the board room as Rattigan was replaced by Chairman Irving Gould.
His departure was unclear with Commodore reporting $28 million in
profit, Rattigan claimed that he was forced out by personality
conflicts with Gould due to Rattigan getting credit for the
company's turnaround. Gould argued that the comeback in the U.S.
was insufficient compared to its rebound in overseas markets, which
accounted for 70% of its sales. Fearful of losing control of the
company Gould took over, cutting payroll from 4,700 to 3,100 and
another five plants were closed.
Around this time, Commodore launched their cut down Amiga, the
A500 that used the traditional Commodore all-in-one case design.
The Atari effort paled in comparison with Atari's fervent efforts
to sell their machine, even bundling over 30 games with it failed.
Commodore was back on top. The 8-bit market however, had turned bad
since Commodore released the Commodore 128. It used the Z80
processor as used in the Spectrum and had a '64 emulation mode.
However, it failed to catch on and bombed in the market place.
Commodore made their last foray into creating 8-bit technology,
only returning to create the unreleased C65
computer in 1990. Commodore was beating their competitors but there
was a sense of gloom, as Commodore seemed destined to fail
again.
By this time the Amiga has become the world's best selling home
computer, ever. On 24th April, the Amiga
3000 was unveiled, although you would not have known it as up
until 30 minutes prior to it's announcement, Commodore denied that
A3000 existed. There were also rumours of Kickstart 2.0. A huge
advancement on the Kickstart 1.3. Commodore became increasingly
confident that it could market anything as the set production of
two new machines. In June 1990 one of their most expensive mistakes
were released, the CDTV. It was designed
for the domestic market in an attempt to move the Amiga into the
living room. A questionable tactic in light of current events. Only
Sony's PlayStation has managed to shrug off the kids' image and
become a desirable item for the general public through a huge
amount of advertising. Considering Commodore's problem the CDTV had
no chance. Sales persons were disallowed from mentioning the Amiga
in the same sentence as CDTV, and the machine had to be kept away
from Amigas. Even the Philips competitor, the CDi failed after a
five-year attempt at moving into the market.
Commodore began to make serious financial mistakes. In August of
that year the A500+ was released. It
was basically an A500, but contained the
ECS chipset and Kickstart2. It was on sale for only six months
before being preceded by the A600. The A600
was basically an A500+ in a smaller box. An embarrassment, seeing
that the A1200 was also released in 1992.
During 1992 the Commodore management scraped a number of
projects that could have bought the Amiga to the fore once again.
The Amiga 3000+ was put on show, an expandable version based upon
the A3000 it had AGA graphics. It was later scrapped, and released
in a totally revamped form as the A4000. On September 11th 1992 the
Amiga 1200 was unveiled. Whilst it was still a prototype, being
plagued by CPU-intensive transfer across the IDE and PCMCIA ports,
Commodore insisted that it go into the shops as it was. Meanwhile
the C64 had entered its final phase as an serious alternative to
the Amiga. Software support had begun to dry up (although not as
much as on the Amstrad and Spectrum) and the system was being sold
cheaper and cheaper. At one point it was being sold for £50
for the basic system with an optional 1541 disk drive. Commodore
magazines were awash with rumours on the C65 system that had come
to light as it looked as if Commodore was about to release it.
Eventually Commodore announced they were concentrating on the Amiga
platform, leaving their own range of Commodore 8-bit behind. Whilst
they were not dead yet, it was clear that the ride would only last
for a little while. It lasted longer than anyone expected - Future
Publishing's Commodore
Format remained in business for a further three years,
disappearing in September 1995.
As 1993 began, the company tried a last ditch attempt to save
everything they had worked for. Their share value had dropped to
just 5 dollars per share and there was an air of gloom surrounding
the company. However, they would not go down without a fight and
were preparing their second attack at the console market in the
form of the CD32. They had learnt from the
CDTV mistake, actually calling it an Amiga
whilst improving the specs to match the A1200. Things were looking
up, games were slowly being released for the console although these
were mostly ports of Amiga titles and polls placed the CD32 as the
most popular CD-based system during 1993 and 94. However, cracks
began to appear at Commodore as their parent company began to lay
people off. The advanced AAA chipset had been shelved and work had
begun on a new chipset called "Hombre" that was to be based upon a
HP-RISC processor. According to journalist Stuart Campbell, once
managing director of Amiga Power, a meeting was held involving all
of the major games companies, in which it was decided that the
Amiga was dead, and that software development should be wound down.
In April of that year it was announced that the A1200 had broken
all previous records, with 100,000 sales since it's launch. The
Falcon, Atari's 32-bit computer had failed to attract the public
being largely incompatible with the Atari ST. A dark cloud was
looming over Commodore.
1994: The bow breaks
Doom and gloom surrounded the Amiga camp. The PC was moving into
the home playing games that the Amiga could only dream of at the
time. Whilst Amiga magazines were attempting to create an sense of
optimism even they were appearing strained. Most countries had an
Commodore company that was financially independent of the parent
company- one by one these went into liquidation with one of the
first being Commodore Australia. In March Commodore posted huge
losses. On April 22nd, they had laid off most of their staff at the
parent company, Commodore International. By April 25th only 30 of
Commodore's 1000 employees remained and two days later the West
Chester facility was closed. The storm that had been rumbling in
the distance for so long was about to begin, and it threatened to
take Commodore and the Amiga with it.
On Friday April 29 at 4:10 P.M. Commodore filed for liquidation.
Their announcement was short
Commodore International Limited announced today that
it's Board of Directors has authorized the transfer of assets to
trustees for the benefit of its creditor and has placed its major
subsidiary, Commodore Electronics Limited, into voluntary
liquidation. This is the initial phase of an orderly liquidation of
both companies, which are incorporated in the Bahamas, by the
Bahamas Supreme Court. This action does not affect the wholly-owned
subsidiaries which include Commodore Business Machines (USA),
Commodore Business machines LTD (Canada), Commodore/Amiga (UK),
Commodore Germany, etc. Operations will continue
normally. |
If Commodore's liquidation had seemed like the death of a foster
parent, the death of a real parent turned out to be even more
painful. On June 20th, 1994, Jay Miner, the father of the Amiga
died at the El Camino Hospital in Mountain View. He had been
fighting against illness for a while, and eventually died from
heart failure due to kidney complications.
The previous year had seen each individual Commodore company
drop like flies until only one remained- Commodore UK run by David
Pleasance and Colin Proudfoot. In January, Chelsea Football club
considered taking legal action against Commodore for unreceived
sponsorship money. A futile action as it turned out. The management
at Commodore UK announced their buyout plan for Commodore and the
Amiga. However, many predicted that the Amiga would never survive
this setback as Amiga World, the first Amiga magazine was canceled
on the 1st of March, 1995.
Almost a year after the Commodore liquidation the battle for
their remains were fought. Commodore UK had withdrawn from the
fight due to a lack of financial muscle and it eventually fell to
two PC manufacturers, Dell and Escom. Whilst Escom had made it
clear that they only wanted the Commodore name, the liquidators
refused to separate the two forcing Escom too bid again. Dell had
offered $15 million, but there were several conditions attached,
including a 30 day extension to review the inventory available.
This was unacceptable for the liquidators who wanted to sell
Commodore as soon as possible and so it went to Escom for $14
million, a German company that was the second largest PC
manufacturer. $4 million of this related to CBM and $10 million
related to Commodore International Bahamas, Ltd. an affiliate of
CBM. The former CSG operation located at 950 Rittenhouse Road in
Norristown
PA was purchased by GMT Microelectronics Corp., a company formed by
former CSG management in order to purchase the chip-making assets.
The purchase price was $4.3 million plus another $1 million to
clear EPA liens. Assets included the plant, equipment, other
inventory items at that location.
Escom separated the two names Commodore and Amiga into two
subsidiaries, Commodore became Commodore BV and Amiga became the
property of Amiga Technologies, run by a former Commodore man,
Jonathan Anderson. The Commodore name was put to use again as it
adorned a new range of Pentium PCs installed with Windows 95, as
well as a range of speakers, CD racks, and mouse mats. The
reasoning behind this being that Commodore were still well
respected for the range of PCs.
Amiga Technologies on the other hand suffered a slow death as
Escom starved them of development and staff. Apart from licensing
the technology, designing a new logo, bringing a fresh supply of
Kickstart 3.1 ROMs to the market, and prototyping the awful Walker
system, very little happened. During June 1996 Escom filed for
liquidation, with many blaming the Amiga curse as the reason.
Whilst the cost of buying the Commodore assets may have
contributed, 1996 was also the time when the bottom dropped out of
the PC market as systems suddenly dropped in price. Ready-built
computers halved in price in a matter of months contributing to
their financial situation as well as a number of boardroom antics
that made investors nervous. As part of a mass reorganization,
Amiga Technologies announced they
were to be sold to Viscorp, one of the
Amiga licenses to face a future as a set-top box. Fortunately (or
perhaps unfortunately for some), Viscorp dropped out of the running
during October 1996 due to dire financial troubles and died. Their
dream of an Amiga set-top box remained unfulfilled as the Amiga
supporters in the company quit and the Amiga press abandoned them.
Their time had passed and the Amiga was destined for bigger
things.
On March 27th, 1997, Gateway 2000, another PC manufacturer
stepped in and bought all rights to the Amiga. An entirely new
subsidiary is setup with Amiga Technologies being renamed Amiga
International. Development on new Amigas featuring entirely new
processors loom ahead and its return to the limelight is underway
once again. For Amiga the storm damage maybe repaired. To find out
what happens next in the Amigas fortunes click to the history of the Amiga page.
Commodore: The New Breed
The Amigas' future looked bright under the
Gateway leadership, promising new convergence boxes. However, the
Commodore name remained a bad omen, leaving a series of
bankruptcies in its wake. A management buyout by Escom Netherlands
resulted in the Commodore subsidiary who renamed themselves
Commodore NL. The company had little connection to
the original Commodore brand, used solely as a brand for the sale
of Commodore-labelled PCs.
True to their namesake Commodore NL did not last long, filing
for liquidation less than a year after Escoms' bankruptcy. The
company's assets were bought by Tulip (a Dutch PC manufacturer) on
Wednesday July 2nd 1997 for an undisclosed sum (read the press release). The move, according
to company officials, would allow them to increase PC production
and sales up to 1 million per year. It is unlikely that this
prediction has come true. However, the company has been able to
make money through brand licensing. In a series of events that
mirrored its Amiga counterpart, Tulip licenced the Commodore name
to several third party manufacturers. This resulted in the
appearance of numerous Commodore-branded office items (paper
shredder, anyone?) and two attempts to recreate a 21st century
equivalent to the cheap-and-cheerful Commodore 64.
Commodore 64.... again!
On August 26th 1998, after five years of absence, Web Computers
unveiled a new version of the old favourite. The new machine bore
little resemblance to the original, utilising MS-DOS as the primary
operating system and emulating the original CBM 64 through a
software emulator. Ironically the C64:Web.It is aimed at a market that the Amiga
had previously attempted to secure with Amiga's failed MCC set-top
box.
This was followed in 2000 by the licensing of the Commodore
trademarks by >Computer National Inc. for their range of
desktops. Like Web Computers, they also promise the development of
a true successor to the C64/128,
based upon an 'all-in-one' wedge design. An interesting
continuation of the Commodore brand that may produce great things
if it is marketed towards the low-end convergence market. Of
course, long-time Commodore users will be aware that marketing has
remained a novelty to any company that has bore the Commodore
name...
Local Links
Commodore: the second Amiga owners
C64:Web.It
Commodore Evolution
More information
Tulip - current owner of the
Commodore trademarks
Amiga - current owners of the
Amiga
Gateway - fourth
Amiga owners
BACK
|