Commodore International
Commodore International Corporation, also known as Commodore International Limited, was a home computer and electronics manufacturer with its head office in The Bahamas and its executive office in the United States founded in 1976 by Jack Tramiel and Irving Gould. It was the successor company to Commodore Business Machines Ltd., established in 1958 by Tramiel and Manfred Kapp. Commodore International, along with its U.S. subsidiary Commodore Business Machines, Inc., was a significant participant in the development of the home computer industry, and at one point in the 1980s was the world's largest in the industry.
The company released its first home computer, the Commodore PET, in 1977; it was followed by the VIC-20, the first ever computer to reach one million units of sales. In 1982, the company developed and marketed the world's best selling computer, the Commodore 64; its success made Commodore one of the world's largest personal computer manufacturers, with sales peaking in the last quarter of 1983 at $. However an internal struggle led to co-founder Tramiel quitting, then rivaling Commodore under Atari Corporation joined by a number of other employees. Commodore in 1985 launched the Amiga 1000 personal computer — running on AmigaOS featuring a full color graphical interface and preemptive multitasking — which would initially become a popular platform for computer games and creative software. The company did particularly well in European markets; in West Germany, Commodore machines were ubiquitous as of 1989.
The company's position started declining in the late 1980s amid internal conflicts and mismanagement, and while the Amiga line was popular, newer models failed to keep pace against competing IBM PC-compatibles and Apple Macintosh. By 1992, MS-DOS and 16-bit video game consoles offered by Nintendo and Sega had eroded Amiga's status as a solid gaming platform. Under co-founding chairman Irving Gould and president Mehdi Ali, Commodore filed for bankruptcy on April 29, 1994 and was soon liquidated, with its assets purchased by German company Escom. The Amiga line was revitalized and continued to be developed by Escom until it too went bankrupt, in July 1996. Commodore's computer systems, mainly the C64 and Amiga series, retain a cult following decades after its demise.
Commodore's assets have been passed through various companies since then. After Escom's demise and liquidation, its core assets were sold to Gateway 2000 while the Commodore brand name was eventually passed to Tulip Computers of the Netherlands. The brand remained under ownership by a Dutch company until 2025, when a group of investors purchased the brand and incorporated a new U.S. company called Commodore International.
Gateway 2000 attempted but failed to market a modern Amiga, and eventually sold the copyrights, Amiga trademark and other intellectual properties to Amiga, Inc., while retaining the Commodore patents, which are now under Acer since its acquisition of Gateway. Amiga Corp., a sister company of Cloanto, owns the Amiga properties since 2019. Hyperion Entertainment of Belgium has continued development of AmigaOS to this day under license, and have released AmigaOne computers based on PowerPC.
History
Commodore Business Machines (Canada) Ltd. (1954–1976)
and Manfred Kapp met in the early 1950s while both employed by the Ace Typewriter Repair Company in New York City. In 1954, they partnered to sell used and reconditioned typewriters and used their profits to purchase the Singer Typewriter Company. After acquiring a local dealership selling Everest adding machines, Tramiel convinced Everest to give him and Kapp exclusive Canadian rights to its products and established Everest Office Machines in Toronto in 1955.By 1958, the adding machine business was slowing. Tramiel made a connection with an Everest agent in England who alerted him to a business opportunity to import portable typewriters manufactured by a Czechoslovakian company into Canada. On October 10, 1958, Tramiel and Kapp incorporated Commodore Portable Typewriter, Ltd. in Toronto to sell the imported typewriters. Commodore funded its operations through factoring over its first two years but faced a continual cash crunch. To bolster the company's financial condition, Tramiel and Kapp sold a portion of the company to Atlantic Acceptance Corporation, one of Canada's largest financing companies, and Atlantic President C. Powell Morgan became the chairman of Commodore. In 1962, the company went public on the Montreal Stock Exchange, under the name of Commodore Business Machines, Ltd.
With the financial backing of Atlantic Acceptance, Commodore expanded rapidly in the early 1960s. It purchased a factory in West Germany to manufacture its typewriters, began distributing office furniture for a Canadian manufacturer, and sold Pearlsound radio and stereo equipment. In 1965, it purchased the furniture company for which it served as the distributor and moved its headquarters to its facilities on Warden Avenue in the Scarborough district of Toronto. That same year, the company made a deal with a Japanese manufacturer to produce adding machines for Commodore, and purchased the office supply retailer Wilson Stationers to serve as an outlet for its typewriters.
In 1965, Atlantic Acceptance collapsed when it failed to make a routine payment. A subsequent investigation by a royal commission revealed a massive fraud scheme in which the company falsified financial records to acquire loans funneled into a web of subsidiaries where C. Powell Morgan held a personal stake. Morgan then pocketed the money or invested it in several unsuccessful ventures. Commodore was one of the Atlantic subsidiaries directly implicated in this scheme. Despite heavy suspicion, the commission could not find evidence of wrongdoing by Tramiel or Kapp. The scandal left Commodore in a worse financial position as it had borrowed heavily from Atlantic to purchase Wilson, and the loan was called in. Due to the financial scandal, Tramiel could only secure a bridge loan by paying interest well above the prime rate and putting the German factory up as collateral. Tramiel worked with a financier named Irving Gould to extricate himself, who brokered a deal to sell Wilson Stationers to an American company. Commodore now owed Gould money and still did not have sufficient capital to meet its payments, so Tramiel sold 17.9% of the company to Gould in 1966 for $. As part of the deal, Gould became the company's new chairman.
Tramiel saw some of the first electronic calculators through his Japanese contacts in the late 1960s. He pivoted from adding machines to marketing calculators produced by companies like Casio under the Commodore brand name. In 1969, Commodore began manufacturing its electronic calculators. Commodore soon had a profitable calculator line and was one of the more popular brands in the early 1970s, producing both consumer and scientific/programmable calculators. However, in 1975, Texas Instruments, the leading supplier of calculator parts, entered the market directly and put out a line of machines priced at less than Commodore's cost for the parts. Commodore obtained an infusion of cash from Gould, which Tramiel used beginning in 1976 to purchase several second-source chip suppliers, including MOS Technology, Inc., to assure his supply.
In 1976, Commodore Business Machines Ltd. was dissolved and replaced by the newly formed Bahamanian corporation Commodore International, which became the new parent of the Commodore group of companies.
Entry into the computer market and success (1977–1984)
convinced Jack Tramiel that calculators were a dead end business and that they should turn their attention to home computers. Peddle packaged his single-board computer design in a metal case, initially with a keyboard using calculator keys, later with a full-travel QWERTY keyboard, monochrome monitor, and tape recorder for program and data storage, to produce the Commodore PET. From PET's 1977 debut, Commodore was primarily a computer company.Commodore had been reorganized the year before into Commodore International, Ltd., moving its financial headquarters to the Bahamas and its operational base to West Chester, Pennsylvania, near the MOS Technology site. The operational headquarters, where research and development of new products occurred, retained the name Commodore Business Machines, Inc. In 1980, Commodore launched production for the European market in Braunschweig, Germany. This site once employed up to 2000 employees, and in February 2017 an exhibition room for about 200 Commodore products was opened here to commemorate its past.
By 1980, Commodore was one of the three largest microcomputer companies and the largest in the Common Market. The company had lost its early domestic-market sales leadership, however by mid-1981 its US market share was less than 5% and US computer magazines rarely discussed Commodore products. BYTE stated "the lack of a marketing strategy by Commodore, as well as its past nonchalant attitude toward the encouragement and development of good software, has hurt its credibility, especially in comparison to the other systems on the market". Writing for Programming the PET/CBM, Raeto Collin West wrote "CBM's product manuals are widely recognized to be unhelpful; this is one of the reasons for the existence of this book."
Commodore re-emphasized the US market with the VIC-20. The PET computer line was used primarily in schools, where its tough all-metal construction and ability to share printers and disk drives on a simple local area network were advantages, but PETs did not compete well in the home setting where graphics and sound were important. This was addressed with the VIC-20 in 1981, which was introduced at a cost of and sold in retail stores. Commodore bought aggressive advertisements 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, with 2.5 million units sold over the machine's lifetime, which helped Commodore's sales in Canadian schools. In promotions aimed at schools and to reduce unsold inventory, PET models labeled 'Teacher's PET' were given away as part of a "buy 2 get 1 free" promotion. As of calendar year 1980, Commodore sales were $40 million, behind Apple Computer and Tandy Corporation in the market.
In 1982, Commodore introduced the Commodore 64 as the successor to the VIC-20. Due to its chips designed by MOS Technology, the C64 possessed advanced sound and graphics for its time, and is often credited with starting the computer demo scene. Its price was high compared to that of the VIC-20 but was much less expensive than any other 64K computer. Early C64 advertisements boasted that "You can't buy a better computer at twice the price", with Australian adverts in the mid-1980s using the slogan "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 the home computer war. TI responded by cutting prices on its 1981 TI-99/4A, leading to a price war involving most vendors other than Apple Computer, including Commodore, TI and Atari. Commodore began selling the VIC-20 and C64 through mass-market retailers such as K-Mart, in addition to traditional computer stores. By the end of this conflict, Commodore had shipped around 22 million C64s, making the C64 the best-selling computer, until the Raspberry Pi overtook it in 2019.
File:C16pi.jpg|thumb|The "heart" of Commodore's philosophy: Early Commodore 16 main PCB, not used in the regular series model. According to Commodore computer engineer Bil Herd, this single-sided PCB was an extraordinary attempt of cost saving by Commodore, which probably failed due to technical problems.
At the June 1983 Consumer Electronics Show, Commodore lowered the retail price of the C64 to, and stores sold it for as little as. At one point, the company was selling as many computers as the rest of the industry combined. Prices for the VIC-20 and C64 were $50 lower than Atari's prices for the 600XL and 800XL. Commodore's strategy was to, according to a spokesman, devote 50% of its efforts to the under- market, 30% on the market, and 20% on the over- market. Its vertical integration and Tramiel's focus on cost control helped Commodore do well during the price war, with in 1983 sales. Although the company and Tramiel's focus on cost cutting over product testing caused hardware defects in the initial C64, some resolved in later iterations. By early 1984, Synapse Software, the largest provider of third-party Atari 8-bit software, received 65% of sales from the Commodore market, and Commodore sold almost three times as many computers as Atari that year.
Despite its focus on the lower end of the market, Commodore's computers were also sold in upmarket department stores such as Harrods. The company also attracted several high-profile customers. In 1984, the company's British branch became the first manufacturer to receive a royal warrant for computer business systems. NASA's Kennedy Space Center was another noted customer, with over 60 Commodore systems processing documentation, tracking equipment and employees, costing jobs, and ensuring the safety of hazardous waste.