Commodore, the commonly used name for Commodore International, was a US-American electronics company based in West Chester, Pennsylvania which was a vital player in the home/personal computer field in the 1980s. The company is also known under the name of its R&D operation, Commodore Business Machines (CBM). Commodore developed and marketed the world's best-selling desktop computer, the Commodore 64 (1982). The company declared bankruptcy in 1994, but since then, there have been several attempts to revive its Amiga systems. The company revived in the mid 2000s after a few mergers with Yeahronimo Media Ventures Inc., SATXS Communications BV, & Tulip Computers.
The company that would become Commodore International was started in 1954 in Toronto by Polish immigrant and Auschwitz survivor Jack Tramiel. He had already run a small business repairing typewriters for a few years while living in New York and driving a taxicab, 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 North American typewriter companies out of business, but Tramiel instead turned to adding machines.
In 1962 the company was formally incorporated as Commodore Business Machines (CBM). In the late 1960s history repeated itself when Japanese firms started producing and exporting adding machines. The company's main investor and chairman, Irving Gould, suggested that Tramiel travel to Japan to understand how to compete. Instead, he returned with the new idea to produce electronic calculators, which were just coming on the market.
Commodore soon had a profitable calculator line and was one of the more popular brands in the early 1970s, producing both consumer as well as scientific/programmable calculators. However, in 1975, Texas Instruments, the main supplier of calculator parts, entered the market directly and put out a line of machines priced at less than Commodore's cost of the parts. Commodore had to be rescued once again by an infusion of cash from Gould, which Tramiel used beginning in 1976 to purchase several second-source chip suppliers, including MOS Technology, Inc., in order to assure his supply. He agreed to buy MOS, which was having troubles of its own, only on the condition that its chip designer Chuck Peddle join Commodore directly as head of engineering.
In December 2007 when Tramiel was visiting the Computer History Museum in Mountain View, California, for the 25th anniversary of the Commodore 64, he was asked why he called his company Commodore, he had this to say: "I wanted to call my company General, but there's so many Generals in the U.S.: General Electric, General Motors. Then I went to Admiral, but that was taken. So I wind up in Berlin, Germany, with my wife, and we were in a cab, and the cab made a short stop, and in front of us was an Opel Commodore.
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 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 (Personal Electronic Transactor). From its 1977 debut, 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, near to the MOS Technology site. The operational headquarters, where research and development of new products occurred, retained the name Commodore Business Machines, Inc. The corporate offices are now home to QVC Studio Park.
The PET computer line was used primarily in schools, due to its tough all-metal construction (some models were labeled "Teacher's PET"), but did not 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 US$299 and sold in retail stores. Commodore took out aggressive ads featuring William Shatner asking consumers "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.
In 1982, Commodore introduced the Commodore 64 as the successor to the VIC-20. Thanks to a well-designed set of chips designed by MOS, the C64 possessed remarkably capable sound and graphics for its time and is often credited with starting the computer demo scene. Its US$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 boasted, "You can't buy a better computer at twice the price."
Australian ads used a tune speaking the words "# Are you keeping up with the commodore? Because the commodore is keeping up with you. #"
In 1983, Tramiel decided to focus on market share and cut the price of the VIC-20 and C64 dramatically, starting what would be called the "home computer war." TI responded by cutting prices on its TI-99/4A, which had been introduced in 1981. Soon there was an all-out price war involving Commodore, TI, Atari and practically every vendor other than Apple Computer. This price war likely contributed to the video game crash of 1983. By the end of this conflict, Commodore had shipped somewhere around 22 million C64s—making the C64 the best selling computer of all time—and in the process, drove TI out of the home-computer market, almost destroyed Atari, bankrupted most smaller companies, and wiped out its own savings. Tramiel's motto, "Business is war," had taken its toll.
Commodore's board of directors were as impacted as anyone else by the price spiral and decided they wanted out. An internal power struggle resulted; in January 1984, Tramiel resigned. He founded a new company, Tramel Technology (spelled differently so people would pronounce it correctly), and hired away a number of Commodore engineers to begin work on a next-generation computer design.
Now it was left to the remaining Commodore management to salvage the company's fortunes and plan for the future. It did so by buying a small company called Amiga Corporation. The company was better known for its forays into the video game market, designing controllers for game consoles as well as making games for the Atari 2600. Their video game business was successful, but the company had a strong interest in designing a groundbreaking new personal computer. Commodore brought this new 16-bit computer design (known initially as the Lorraine, later dubbed the Amiga 1000) to market in the fall of 1985 for US $1295.
But Tramiel had beaten Commodore to the punch. His design was 95% completed by June (which only fueled speculation that his engineers had taken technology with them from Commodore). In July 1984 he bought the consumer side of Atari Inc. from Warner Communications which allowed him to strike back and release the Atari ST earlier in 1985 for about $800.
During development in 1983, Amiga had exhausted venture capital and was desperate for more financing. Jay Miner and company had approached former employer Atari, and the "Warner owned" Atari had paid Amiga to continue development work. In return Atari was to get one-year exclusive use of the design as a video game console. After one year Atari would have the right to add a keyboard and market the complete Amiga computer. The Atari Museum has acquired the Atari-Amiga contract and Atari engineering logs revealing that the Atari Amiga was originally designated as the 1850XLD. As Atari was heavily involved with Disney at the time, it was later code-named "Mickey", and the 256K memory expansion board was codenamed "Minnie".
The following year, Tramiel discovered that Warner Communications wanted to sell Atari, which was rumored to be losing about $10,000 a day. Interested in Atari's overseas manufacturing and world-wide distribution network for his new computer, he approached Atari and entered negotiations. After several on-again/off-again talks with Atari in May and June of 1984, Tramiel had secured his funding and bought Atari's Consumer Division (which included the console and home computer departments) in July.
As more execs and researchers left Commodore to join up with Tramiel's new company Atari Corp. after the announcement, Commodore followed by filing lawsuits against four former engineers for theft of trade secrets in late July. This was intended, in effect, to bar Tramiel from releasing his new computer.
One of Tramiel's first acts after forming Atari Corp. was to fire most of Atari's remaining staff, and to cancel almost all ongoing projects, in order to review their continued viability. In late July/early August, Tramiel representatives discovered the original Amiga contract from the previous fall. Seeing a chance to gain some leverage, Tramiel immediately used the contract to counter-sue Commodore through its new subsidiary, Amiga, on August 13.
The Amiga crew, still suffering serious financial problems, had sought more monetary support from investors that entire spring. At around the same time that Tramiel was in negotiations with Atari, Amiga entered into discussions with Commodore. The discussions ultimately led to Commodore's intentions to purchase Amiga outright, which would (from Commodore's viewpoint) cancel any outstanding contracts - including Atari Inc.'s. This "interpretation" is what Tramiel used to counter-sue, and sought damages and an injunction to bar Amiga (and effectively Commodore) from producing any resembling technology. This was an attempt to render Commodore's new acquisition (and the source for its next generation of computers) useless. The resulting court case lasted for several years, with both companies releasing their respective products. By March of 1987 they had settled out of court, with all suits against Tramiel's engineers dropped. His "Business is War" tactics had succeeded again.
Throughout the life of the ST and Amiga platforms, a ferocious Atari-Commodore rivalry raged. While this rivalry was in many ways a holdover from the days when the Commodore 64 had first challenged the Atari 800 (among others) in a series of scathing television commercials, the events leading to the launch of the ST and Amiga only served to further alienate fans of each computer, who fought vitriolic holy wars on the question of which platform was superior. This was reflected in sales numbers for the two platforms until the release of the Amiga 500 in 1987 which led the Amiga sales to exceed the ST by about 1.5 to 1, despite reaching the market later. However, the battle was vain as neither platform captured a significant share of the world computer market and only the Apple MacIntosh would survive the industry-wide shift to Microsoft Windows running on PC clones.
In the 1970s and early 80s, the computer press had often sought Commodore (one of the industry's leading players), and its colorful management for information. The VIC-20 and C64, although aggressively marketed, were arguably more successful because of their price than their marketing. After Tramiel's departure, Commodore executives shied away from mass advertising and other marketing ploys, fearful of repeating past mistakes. Commodore also retreated from its earlier strategy of selling its computers to discount outlets and toy stores, and now favored authorized dealers.
By the late 1980s, the personal computer market had become dominated by the IBM PC compatible and Apple Macintosh platforms. Commodore's marketing efforts for the Amiga were less competitive and seemed half-hearted and unfocused. The company also concentrated on consumer products that would not see a demand for another few years—including a digital TV system called CDTV.
In the early 1990s, CBM continued selling Amigas with 7–14 MHz 68000-family CPUs (even though Amiga 3000 with 25 MHz 68030 was in the market by that time), when PCs with 33 MHz 486s, high-color graphics cards and SoundBlaster (or compatible) sound cards offered comparable, and eventually higher, performance, albeit at higher prices. By way of contrast, when introduced in 1985, the Amiga had competed favorably against 286-based systems with EGA graphics and rudimentary sound capabilities that frequently cost 2–3 times as much.
In 1992, the production of the A600 seemed like a backward move; it replaced the A500, yet it removed the numeric keypad, Zorro expansion slot, SCSI capability, and other functionality in favor of PCMCIA and a theoretically cost-reduced design. It was basically unexpandable and lasted less than a year. Productivity developers moved to PC and Macintosh, while the console wars took over the gaming market. David Pleasance, managing director of Commodore UK, described the A600 as a 'complete and utter screw-up'. (Smith, 1994)
In late 1992, Amiga hardware began to reach parity with PCs with the release of the A4000 and A1200 computers, which featured an improved graphics chipset, the AGA. By this point, both the IBM PC and Apple Macintosh had a much larger market share than the Amiga platform. As software developers shifted to these platforms, the Amiga lost value for mainstream consumers. The custom-designed and custom-built AGA chipset also cost Commodore considerably more than the commodity chips used in IBM PCs, further reducing Commodore's profit margins. Common wisdom was that even though the AGA clearly improved upon the original chipset (OCS), it never returned to Amiga the clear dominance of multimedia computing that it once promised.
Software piracy has often been given by trade publications and user groups as the reason for the Amiga's demise, but this view is controversial. For information on the specific challenges in the Amiga market of the time, see the Amiga Software article.
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 former site of Commodore's operational headquarters in West Chester, Pennsylvania, now houses the headquarters and broadcast studios of leading cable retailer QVC, Inc. (On November 26, 2004, QVC became the first retailer to sell the DTV, a "C64 in a joystick" designed by Jeri Ellsworth.)
The company's computer systems, especially the C64 and Amiga series, retain a cult-following among their users years after its demise.
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 Computers and Dell Inc., 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 due to over-expansion, 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. Tulip's ownership was largely academic 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 also resurfaced in late 2003 on an inexpensive portable MP3 player made in the People's Republic of China by Tai Guen Enterprise, sold mostly in Europe. However, the device's connection to Tulip, the legal owners of the name, is unclear.
In July of 2004, Tulip announced a new series of products using the Commodore name: fPET, a flash memory-based USB Key drive; mPET, a flash-based MP3 Player and digital recorder; eVIC, a 20 GB music player; and the C64 DTV.
In late 2004 Tulip sold the Commodore name to Yeahronimo Media Ventures for €22 million The sale was completed in March 2005 after months of negotiations.
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 United States Environmental Protection Agency shut the plant down. GMT ceased operations and was liquidated.
Ownership of the Amiga line passed through a few companies, from Escom of Germany in 1995, and then to U.S. PC clone maker Gateway in 1997, before an exclusive lifetime license to was made to Amiga, Inc., a Washington company founded by former Gateway employees Bill McEwen and Fleecy Moss in 2000. On March 15, 2004, Amiga, Inc. announced that on April 23, 2003 it had transferred its rights over past and future versions of the Amiga OS (but not over other intellectual property) to Itec, LLC, later acquired by KMOS, Inc., a Delaware company. On March 16, 2005, KMOS, Inc. announced that it had completed all registrations with the State of Delaware to change its corporate name to Amiga, Inc.
Commodore Gaming was formed to reintroduce the brand to the booming gaming PC market, after jointly acquiring the Commodore name with Commodore International Corporation in 2005.. At the CeBIT 2007 show in Germany, four new gaming geared PCs were introduced; named Cg, Cgs, Cgx and Cxx. These are described as ranging from an entry level gaming PC to an “extreme specification model”. Each machine running Windows Vista with customization from a range of high end components and peripherals.