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Commodore International

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Commodore is the commonly used name for Commodore International, an electronics company who was a major player in the 1980s home computer field. The company formally went bankrupt in 1994, but there have since been several attempts to revive their Amiga systems.

History

Foundation and early years

The company that would become Commodore International was started in Toronto by Auschwitz survivor Jack Tramiel in 1954. He had already run a small business fixing typewriters for a few years while living in New York (a job he supported by driving a cab), but managed to sign a deal with a Czechoslovakian company to manufacture their designs in Canada and moved to Toronto to start production. By the late 1950s a wave of Japanese machines forced most typewriter companies out of business, but Tramiel instead turned to adding machines.

In 1962 the company was formally incorporated as Commodore Business Machines (CBM), and in the late 1960s history repeated itself again when the Japanese firms started producing adding machines. The company's main investor and chairman, Irving Gould, suggested that Tramiel travel to Japan to understand how they could compete. Instead he returned with a new idea, to produce electronic calculators, which were just coming on the market.

Commodore soon had a profitable calculator line, and were one of the more common brands in the early 1970s, producing both ordinary as well as scientific/programmable calculators. However in 1975 Texas Instruments, the main supplier of calculator parts, decided to enter the market directly and put out a line of machines priced at less than they charged Commodore for the parts. Commodore had to be rescued once again by an infusion of cash from Gould, which Tramiel used in 1976 onwards to purchase several second-source chip suppliers, including MOS Technology, Inc., in order to guarantee supply. He agreed to buy MOS, who were having troubles of their own, only on the condition that chip designer Chuck Peddle join Commodore directly as head of engineering.

"Computers for the masses, not the classes"

Once Chuck Peddle had taken over engineering at Commodore, he convinced Jack Tramiel that calculators were already a dead-end, and that they should turn their attention to home computers. Peddle packaged his existing KIM-1 hobbyist's single-board computer design in a metal case, along with a full-travel QWERTY keyboard, monochrome monitor, and tape recorder (for program and data storage), to produce the Commodore PET. From that date forward (1977), Commodore would be a computer company.

Commodore had been reorganized the year before into Commodore International, Ltd., moving its financial headquarters to the Bahamas and its operational headquarters to West Chester, Pennsylvania, close to the MOS Technology site. The operational headquarters, where research and development of new products were taking place, retained the name Commodore Business Machines, Inc.

The PET computer line was used primarily in schools, due to its tough all-metal construction (some models were labelled "Teacher's PET"), but didn't compete well in the home setting where graphics and sound were important. This was addressed with the introduction of the VIC-20 in 1981, which was introduced at a cost of $299 and sold in retail stores. Commodore took out aggressive ads featuring William Shatner asking, "Why buy just a video game?". The strategy worked and the VIC-20 became the first computer to ship more than one million units. A total of 2.5 million units were sold over the machine's lifetime.

Looking to take over the higher-end portion of the market as well, CBM introduced the Commodore 64 in 1982. Thanks to a well-integrated series of chips designed by MOS, the C64 was a very capable sound and graphics machine for its time, often credited with starting the computer demo scene. Its $595 price was high compared to the VIC-20, but it was still much less expensive than any other 64K computer on the market. Early C64 ads touted this, boasting "You can't buy a better computer at twice the price".

Once again Texas Instruments decided to take over a market, cutting prices on its TI-99/4A, which had been introduced in 1981. But this time Tramiel decided to fight rather than switch, and cut the price of the C64 dramatically. TI responded, and soon there was an all-out price war involving Commodore, TI, Atari and practically everyone other than Apple Computer. By the end of the process Commodore had shipped somewhere around 22 million C64's – making the C64 the best selling computer of all time – and in the process killed the TI-99, destroyed Atari, bankrupted most smaller companies, and wiped out their own savings. Tramiel's motto, "Business is war," showed, and took its toll.

Tramiel quits; The Amiga vs ST battle

The board of directors was as trapped as anyone else by the price spiral, and eventually decided they wanted out. A power struggle started inside the company, and in January 1984, Tramiel quit. A few months later he bought Atari from Warner Communications for almost nothing. Now it was up to the remaining Commodore management to salvage something of their company. They did so by buying a promising new 16-bit computer design known as the Amiga from a group of ex-Atari designers. The new machine, dubbed the Amiga 1000, was brought to market in the fall of 1985 for US $1395.

But Tramiel had beaten them to the punch. Throwing together a number of off-the-shelf parts, he had already released the Atari ST earlier in 1985, for about $800. Tramiel also claimed that Jay Miner did the chip design for the Amiga computer while still under contract with Atari, which led to a lawsuit between the two companies. A ferocious Atari/Amiga war ensued, and was ended only when 1987 saw the release of the Amiga 500, which took over the market from the ST. Ultimately, the Amiga outsold the ST about 1.5 to 1 in spite of being later to market.

The beginning of the end

By the late 1980s the computer market was rapidly latching onto the IBM PC and Apple Macintosh worlds, with everyone else pushed off to the side. In the 1970s and early 80s, the computer press, desperate for news, had always come to Commodore looking for information. The VIC-20 and C64, although aggressively marketed, arguably were successful more because of their price than because of their marketing. After Tramiel's departure, Commodore executives shied away from mass-market advertising and other marketing ploys, fearful of duplicating the past. Commodore also retreated from its earlier strategy of selling its computers at discount houses, now favoring its authorized dealers.

Once forced to market the Amiga line, Commodore's efforts proved ineffective and even seemed half-hearted (one common joke was "If CBM got the contract to advertise Kentucky Fried Chicken, they'd call it 'Warm Dead Bird'"). They also failed to expand the technological edge they had, instead trying to bring technologies to market that would not see demand for another couple of years – like digital TV (CDTV) and a 32-bit CD-ROM based game console (CD32).

A massive divide existed between the engineers and the management, with the technical staff resorting to getting their work done behind the backs of management. For example, CPU samples from Motorola were delivered to the home addresses of the engineers and, for interest, Motorola gave them priority over Apple, who also used the same CPUs.

The engineers gave up trying to get their technology into production, and Commodore seemed content with selling the same old machine. In spite of its technical strengths, the Amiga lost ground to the PC clone ecosystem. When introduced in 1985, the Amiga was competing favorably against Intel 80286-based systems with EGA graphics and rudimentary sound capabilities that frequently cost 2–3 times as much. But well into the 1990s, CBM was still selling Amigas with 7 MHz 68000-family CPUs, when PCs with 33–100 MHz 486's, high-color graphics cards and SoundBlaster (or compatible) sound cards offered higher performance at very competitive prices. Software developers by and large started to favor the PC market.

The Amiga hardware did not begin to reach feature parity with the PCs until release of the A4000 and A1200 computers in late 1992, but because the custom AGA chipset in the third-generation Amigas were much more expensive to produce than the commodity chips used in PCs, the Amigas were not priced attractively. Although welcomed by Amiga enthusiasts, the machines did little to improve Commodore's fortunes.

The sun sets on Commodore

With market share eroding, Commodore embarked on a series of decisions that were heavily questioned by shareholders and the press, who sometimes accused management of only being interested in removing as much value from the company as possible before it finally disappeared. By 1994, only its operations in Germany and the United Kingdom were still profitable.

Commodore declared bankruptcy on April 29, 1994. and its assets were liquidated. The company's many computers retained a cult following for years after its demise.

Post-Commodore International, Ltd.

Following its liquidation, Commodore's former assets went their separate ways, with none of Commodore's successors repeating Commodore's early success.

Commodore UK was the only subsidiary to survive the bankruptcy and even placed a bid to buy out the rest of the operation, or at least the former parent company. For a time it was considered the front runner in the bid, and numerous reports, all false, surfaced during the 1994-1995 time frame that Commodore UK had made the purchase. Commodore UK stayed in business by selling old inventory and making computer speakers and some other types of computer peripherals. However, Commodore UK lost its financial backing after several larger companies, including Gateway Computer and Dell, became interested, primarily for Commodore's 47 patents relating to the Amiga. Ultimately, the successful bidder was German PC conglomerate Escom, and Commodore UK was absorbed into Escom in mid-1995.

Escom paid US$14 million for Commodore International, primarily for the Commodore brand name. It separated the Commodore and Amiga operations into separate divisions and quickly started using the brand name on a line of PCs sold in Europe. However, it quickly started losing money, went bankrupt on July 15, 1996, and was liquidated.

In September 1997, the Commodore brand name was acquired by Dutch computer maker Tulip Computers NV. It was little more than the answer to a trivia question until July 11, 2003, when Tulip announced it would re-launch the Commodore name, including new Commodore 64-related products, and threatened legal action against commercial web sites that used the computer's name without a license. On 18 June, 2004, Tulip introduced the website CommodoreWorld.com (see external links, below), run by its new daughter company Commodore International BV.

The Commodore brand name resurfaced in late 2003 on an inexpensive portable MP3 player made in China by Tai Guen Enterprise, sold mostly in Europe. However, the device's connection to Tulip, the legal owners of the name, is unclear.

The Commodore Semiconductor Group (formerly MOS Technology, Inc.) was bought by its former management and in 1995, resumed operations under the name GMT Microelectronics, utilizing a troubled facility in Norristown, Pennsylvania that Commodore had closed in 1992. By 1999 it had $21 million in revenues and 183 employees. However, in 2001 the Environmental Protection Agency shut the plant down. GMT ceased operations and was liquidated.

Ownership of the Amiga line passed through several owners, from Escom of in 1995, and then to U.S. PC clone maker Gateway in 1997, before being licensed to Amiga, Inc., a company founded by former Gateway employees Bill McEwen and Fleecy Moss in 2000.

Product line

Computers:

Other hardware:


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