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Gareth Knight
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Commodore History

Commodore chickenhead
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.
Commodore Adding Machine
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.

Commodore PET

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.

C64 logo

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."
A1000

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.
Commodore share values
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

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

TulipThe 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

Commodore is back!
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