The Giant of the 1980s That Revolutionized Computing and Fell Into Oblivion

In the business world, especially in the technology industry, success is never guaranteed. Companies that are currently leading the market could face a very different reality in the future. Some say that one way to predict the future is to look at the past. In the last few years, we’ve witnessed the downfall of tech giants such as Blackberry, Myspace, and Kodak. Commodoreonce a pioneer in computing and the developer of the world’s best-selling desktop computer, is now fading into obscurity.

As the years go by, Commodore’s memory grows dimmer and begins to fade. Many in recent generations are unfamiliar with it. Some only remember a world dominated by IBM-compatible PCs. Others were born during the era of iPhones and touchscreen devices, experiencing daily life with other brands and technologies.

In this post, we’ll travel back in time to delve into the captivating history of this iconic company, which many are working hard to preserve despite the challenges.

From Selling Calculators to Developing One of the World’s Most Popular Computers

In the 1950s, Jack Tramiel, a Holocaust survivor, worked for the Ace Typewriter Repair Company, a typewriter repair store, for $50 a week (about $650 in today’s dollars). At some point, the company couldn’t pay its employees, so he stopped receiving his monthly allowance. He had previously repaired typewriters for the US Army, so Tramiel decided to help the company and pursued a contract with the military to outsource repairs.

As a result, the Ace Typewriter Repair Company received a large number of typewriters to repair. However, Tramiel didn’t see an increase in his salary. He had a family to support and even worked as a taxi driver at night to make some extra money. Eventually, Tramiel quit and teamed up with Manfred Kapp, a former colleague, to start their own typewriter repair and resale business in the Bronx, New York City.

The problem was that achieving the desired goal in the US was impossible. The only solution was to open a business in Canada, where the typewriter market was also very promising. Thus, in 1958, Tramiel and Kapp established Commodore Portable Typewriter, Ltd.

It’s worth pausing for a moment to discuss the origin of the company’s name. Tramiel, who was born in Poland and came to the US after being liberated from a concentration camp in Hannover, Germany, decided to join the US Army as a way of repaying the country for the benefit he had received. It was during his time in the army that he learned to repair typewriters.

When he was deciding on a name for his new company, he initially thought of military-themed names like “General.” However, I found that other well-known companies, such as General Electric and General Motors, already used that name. “Admiral,” on the other hand, was already taken. “So I wound up in Berlin and we were in a cab and the cab made a short stop and in front of it was an Opel Commodore. And that was it,” Tramiel said in a 2007 interview with PC Magazine. “Commodore” refers to a rank for members of the navy in many countries, making it a fitting choice for the company’s name.

Commodore Portable Typewriter, Ltd. initially sold typewriters but eventually expanded its catalog to include other office items such as mechanical adding machines, hand-held calculators, and programmable calculators. Despite experiencing growth, the company encountered financial problems. To address this, Tramiel and Kapp sold a part of Commodore to a Canadian financial firm, the Atlantic Acceptance Corporation. Consequently, his president became the president of Commodore, which was listed on the Montreal Stock Exchange in 1972.

Subsequently, Tramiel and Kapp established a factory in West Germany for typewriter production and acquired the Canadian office supply company Wilson Stationers. However, things took a turn for the worse when the Atlantic Acceptance Corporation collapsed due to fraud involving falsified accounting documents. This had severe implications for Commodore as its creditor demanded immediate loan repayment, contrary to the agreed-upon terms. To survive, Tramiel arranged a loan at a much higher than market rate to survive.

A financier named Irving Gould assisted Commodore in selling Wilson Stationers to a US company in 1956. Gould also acquired 17.9% of Commodore and became the company’s new president. Its product lineup now included electronic calculators, but Texas Instruments, a major supplier of electronic components, entered the electronic calculator market and virtually eliminated the competition. Financial losses once again burdened Commodore. In the late 1970s, Commodore acquired chip manufacturer MOS Technology, Inc.

Chuck Peddle, an engineer at MOS who had developed a successful $25 chip called the 6502, convinced Tremiel that computers were the future. As a result, he gave Peddle a chance to build a computer they could show at the annual Consumer Electronics Show within six months. The concept delighted the attendees at the event, leading Commodore to turn it into a commercial product: the Personal Electronic Transactoralso known as the Commodore PET. It was launched in 1977, the same year that Steve Jobs, Steve Wozniak, and Ronald Wayne founded Apple in a garage in Palo Alto, California.

Peddle had created an impressive computer with a numerical keypad, 9-inch screen, 1 Mhz processor, 4K memory, power supply, and several expansion ports. All this was contained in a white box. Not only did it look very advanced, but it was also sold for about $495 (about $2,700 in today’s dollars), a quite attractive price for the time. When orders started coming in, the price went up to $595. It was an 8-bit computer running PET BASIC, an operating system based on 6502 Microsoft BASIC.

In 1979, Commodore introduced an upgraded version of the PET called the 2001-N. This new model came equipped with a standard green phosphor display. Commodore also agreed with Microsoft to upgrade BASIC, resulting in BASIC 2.0, which eliminated the 256-element matrix limitation and had a reorganized zero page. At this stage, the company went beyond computers and also began selling printers. In 1981, Commodore introduced the Commodore VIC-20a $299.95 computer with a color screen, 5 KB of RAM (expandable to 32 KB), and a video game joystick port.

For a more advanced approach, Commodore announced the Commodore 64 in 1982. This computer came with the 8-bit 6510 MOS microprocessor, 64 KB of RAM, 20 KB of ROM, Microsoft Basic, and color monitor support. It cost $595, but the price would eventually drop to $200 a year later. In the US, this product competed with the IBM-compatible PC, the Apple II, and Atari. Meanwhile, in the United Kingdom, competition came from BBC Micro (a key part of Acorn Computers and ARM), ZX Spectrum, and Amstrad. Interestingly, Commodore’s main rivals in Japan were Sony, Sharp, Fujitsu, and NEC.

Despite the ongoing success, internal conflict was brewing. Tramiel disagreed with Gould over how to run the company during good times, leading to Tramiel leaving the company in 1984. He then founded Tramel Technology, Ltd. with the aim of introducing a next-generation computer to the market. Eventually, he acquired the Consumer Division of Atari Inc. from Warner Communications and began producing the Atari ST line of 16-bit computers based on Motorola’s 68000 CPU.

Meanwhile, another company was developing a project known as “Lorraine,” which would later become Amiga. Interestingly, Atari was close to acquiring the iconic Commodore computer, but the company behind Amiga needed additional funds to continue the project. Atari, led by Tramiel, made a small initial investment and started a share acquisition process, but negotiations dragged on. Eventually, Commodore swooped in with a last-minute offer of $24 million to take full control, thwarting Atari’s efforts.

Commodore unveiled the Commodore Amiga 1000 model in 1985 at a celebrity event in New York City. Equipped with a Motorola CPU, 256 KB of RAM, and an 880 KB 3.5-inch disk drive, the computer also offered multitasking capabilities that set it apart from competitors like Microsoft and Apple. It was priced at $1,300. However, the company, then led by Marshall F. Smith, faced financial challenges.

Much of the proceeds were going to pay off debts. In 1985, Thomas Rattigan took over the company and made cost-cutting decisions, focusing on selling the Commodore 64 and the more powerful Commodore 128 and introducing the new Amiga 500 and Amiga 2000. In 1987, Gould took over and launched other products, including the Amiga 3000UX, Amiga 600, and the CD32 console, in an attempt to enter the video game market. Despite the Amiga’s popularity, Commodore continued to face financial difficulties.

The company failed to renegotiate its outstanding loans, making it impossible to continue operating. In 1994, he filed for bankruptcy. A German company called Escom purchased its assets and continued to market the Amiga computer until it also went out of business in 1996. The ownership of the Amiga trademark changed hands several times, ultimately ending up with Amiga Corp. Hyperion Entertainment, a Belgian company, has been developing the Amiga OS, a cult operating system that powers the AmigaOne computers marketed by A-Eon Technology and Acube Systems.

Image | Wikimedia Commons

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