Commodore Business Machines (Canada) Ltd. (1954–1976) Jack Tramiel 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
Czechoslovak 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 (Canada), 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 $ (equivalent to $ in ). 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 (Canada) 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) Chuck Peddle 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 (Personal Electronic Transactor). 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. , West Germany, its large European HQ 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 (equivalent to $ in ) 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 (C64) 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 (equivalent to $ in ) 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. main PCB (prototype), 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.
Departure of Tramiel, acquisition of Amiga and competition with Atari (1984–1987) By early 1984, Commodore was the most successful home computer company, with more than (equivalent to $ in ) in annual revenue and (equivalent to $ in ) in net income, whilst competitors had large losses. The company's revenue of $425 million in the fourth calendar quarter of 1983 more than doubled its revenue of a year earlier. Although
Creative Computing compared the company to "a well-armed battleship [which] rules the micro waves" and threatened to destroy rivals like
Atari and
Coleco, Commodore's board of directors, affected by the price spiral, decided to exit the company. In January 1984, an internal power struggle resulted after Tramiel resigned due to disagreements with the board chairman,
Irving Gould. Gould replaced Tramiel with Marshall F. Smith, a steel executive without a computer or consumer marketing experience. Tramiel's departure at the moment of Commodore's greatest financial success surprised the industry. (1984) In May 1984, Tramiel founded a new company, Tramel Technology, and hired several Commodore engineers to begin work on a next-generation computer design. That same year, Tramiel discovered
Warner Communications wanted to sell Atari, which was rumored to be losing about a day. Interested in Atari's overseas manufacturing and worldwide distribution network for a new computer, he approached Atari and entered negotiations. After several talks with Atari in May and June 1984, Tramiel had secured funding and bought Atari's Consumer Division (which included the console and home computer departments) in July. In July 1984 Tramiel bought the consumer side of Atari Inc. from
Warner Communications and released the
Atari ST earlier in 1985 for about . As more executives and researchers left Commodore after the announcement to join Tramiel's new company
Atari Corp., 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 to review their continued viability. In late July to early August, Tramiel representatives discovered the original Amiga contract from the previous fall. Seeing a chance to gain some leverage, Tramiel immediately used the agreement to counter-sue Commodore on August 13. The remaining Commodore management sought to salvage the company's fortunes and plan for the future, and did so by buying a small
startup company called
Amiga Corporation in August 1984 for ( in cash and $550,000 in common shares). Amiga became a subsidiary of Commodore, called Commodore-Amiga, Inc. During development in 1981, Amiga had exhausted venture capital and needed more financing. Jay Miner and his company had approached their former employer, the Warner-owned
Atari, who paid Amiga to continue development work. In return, Atari received the exclusive use of the design as a video game console for one year, after which Atari would have the right to add a keyboard and market it as a complete Amiga computer. The Atari-Amiga contract and engineering logs identify the Atari-Amiga product was 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". Still suffering serious financial problems, Amiga sought more monetary support from investors that entire spring. At around the same time that Tramiel was negotiating with Atari, Amiga entered into discussions with Commodore. The discussions ultimately led to Commodore's intentions to purchase Amiga outright, which Commodore viewed would cancel any outstanding contracts including Atari Inc.'s. Tramiel counter-sued on the basis of this interpretation, and sought damages and an injunction to bar Amiga and effectively Commodore from producing any resembling technology, to render Commodore's new acquisition and the source for its next generation of computers useless. The resulting court case lasted several years. Commodore introduced a new
32-bit computer design to market in the fall of 1985 named the
Amiga 1000 for , first demonstrated at the CES in 1984. An Atari-Commodore rivalry continued throughout the life of the ST and Amiga platforms. While the rivalry was a holdover from the competition between the C64 and Atari 800, the events leading to the launch of the ST and Amiga served to further alienate fans of each computer, who disagreed as to 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, neither platform captured a significant share of the world computer market, with only the Apple Macintosh surviving the industry-wide shift to
Intel-based
x86 computers using
Microsoft Windows. Commodore and Atari both sought to compete in the workstation market, with Commodore announcing in 1988 a
Transputer-driven system based on the Amiga 2000 in response to the
Atari Transputer Workstation. Similarly, a Unix workstation based on the Amiga 2000, featuring the 68020 CPU, was detailed as Atari announced developer shipments of its own 68030-based Unix workstation within a claimed "to or three months". Atari's workstation, the
TT030, eventually arrived in 1990 without a version of Unix available, this only eventually becoming available to developers in late 1991. Commodore's workstation arrived in 1990 in the form of the
Amiga 3000UX.
Decline and later years (1987–1994) Commodore suffered a poor reputation with its dealers and customers, and upon the 1987 introduction of the Amiga 2000, Commodore retreated from its earlier strategy of selling its computers to discount outlets and toy stores and favored authorized dealers.
Adam Osborne stated in April 1981 that "the microcomputer industry abounds with horror stories describing the way Commodore treats its dealers and its customers." Commodore under Tramiel had a reputation for
cannibalizing its own products with newer ones;
Doug Carlston and others in the industry believed rumors in late 1983 that Commodore would discontinue the C64 despite its success because they disliked the company's business practices, including its poor treatment of dealers and introducing new computers incompatible with existing ones. A Boston reseller said, "It's too unsettling to be one of their dealers and not know where you stand with them." After Tramiel's departure, another journalist wrote that he "had never been able to establish excellent relations with computer dealers ... computer retailers have accused Commodore of treating them as harshly as if they were suppliers or competitors, and as a result, many have become disenchanted with Commodore and dropped the product line". Software developers also disliked the company, with one stating that "Dealing with Commodore was like dealing with
Attila the Hun." At the 1987
Comdex, an informal
InfoWorld survey found that none of the developers present planned to write for Commodore platforms. Commodore's software had a poor reputation;
InfoWorld in 1984, for example, stated that "so far, the normal standard for Commodore software is mediocrity". Commodore almost went bankrupt in early 1986, obtaining a one-month extension on repaying $192 million in loans that it had defaulted on in June 1985. Tramiel's successor, Marshall F. Smith, left the company in 1986, as did his successor
Thomas Rattigan in 1987 after a failed
boardroom coup. The head of
Blue Chip Electronics, a former Commodore employee, described the company as "a well-known revolving door". Commodore faced the problem when marketing the Amiga of still being seen as the company that made cheap computers like the C64 and VIC. The C64 remained the company's
cash cow but its technology was aging. By the late 1980s, the personal computer market had become dominated by the IBM PC and
Apple Macintosh platforms. Commodore's marketing efforts for the Amiga were less successful in breaking the new computer into an established market compared to the success of its 8-bit line. The company put effort into developing and promoting consumer products that would not be in demand for years, such as an
Amiga 500-based
HTPC called
CDTV. As early as 1986, the mainstream press was predicting Commodore's demise, and in 1990
Computer Gaming World wrote of its "abysmal record of customer and technical support in the past". Nevertheless, as profits and the stock price began to slide, ''The Philadelphia Inquirer's'' Top 100 Businesses Annual continued to list several Commodore executives among the highest-paid in the region and the paper documented the company's questionable hiring practices and large bonuses paid to executives amid shareholder discontent. Commodore failed to update the Amiga to keep pace as the PC platform advanced. CBM continued selling the
Amiga 2000 with 7.14 MHz
68000 CPUs, even though the
Amiga 3000 with its 25 MHz
68030 was on the market. Apple, by this time, was using the
68040 and had relegated the 68000 to its lowest-end model, the black and white
Macintosh Classic. The 68000 was used in the
Sega Genesis, one of the leading
game consoles of the era, Computers fitted with high-color
VGA graphics cards and
SoundBlaster (or compatible)
sound cards had also caught up with the Amiga's performance, and Commodore began to fade from the consumer market. Although the Amiga was originally conceived as a gaming machine, Commodore had always emphasized the Amiga's potential for professional applications, but the Amiga's high-performance sound and graphics were irrelevant to
MS-DOS-based routine business word-processing and data-processing requirements, and the machine could not successfully compete with computers in a business market that was rapidly undergoing
commoditization. Commodore introduced a range of
PC compatible systems designed by its German division, and while the Commodore name was better known in the US than some of its competition, the systems' price and specifications were only average. Sales of the PC range were strong in Germany, however, seeing Commodore acquire a 28% share of this market segment in 1990, second only to
IBM. Things were less rosy in the United States, where Commodore had a 6% share in the market segment as of 1989, down from 26% in 1984.
Forbes's Evan McGlinn wrote regarding the firm's decline, citing management as the source cause: "the absentee-landlord management style of globe-trotting chairman and chief executive Irving Gould." Commodore attempted to develop new chipsets during the early 1990s, first the
Advanced Amiga Architecture and later the
Hombre. Funding problems meant that they did not materialize as ultimately the company would go bust. In 1992, the
Amiga 600 replaced the Amiga 500, which removed the numeric keypad, Zorro expansion slot, and other functionality, but added
IDE,
PCMCIA, and intended as a cost-reduced design. Designed as the Amiga 300, a non-expandable model to sell for less than the
Amiga 500, the 600 became a replacement for the 500 due to the unexpectedly higher cost of manufacture. Productivity developers increasingly moved to PC and Macintosh, while the
console wars took over the gaming market. David Pleasance, managing director of Commodore UK, described the Amiga 600 as a "complete and utter screw-up". In the same year, Commodore released the Amiga 1200 and Amiga 4000 computers, which featured an improved graphics chipset, the
AGA. The advent of PC games using 3D graphics such as
Doom and
Wolfenstein 3D spelled the end of Amiga as a gaming platform. In 1993, Commodore launched a 32-bit
CD-ROM-based
game console called the
Amiga CD32, described as a 'make or break' system, according to Pleasance. The
Amiga CD32 was not sufficiently profitable to return Commodore to solvency, however this was not a universal opinion at Commodore, with Commodore Germany hardware expert Rainer Benda stating "The CD32 was a year late for Commodore. In other words, here, too, it might have been better to focus on the core business than jump on a console and hope to sell 300,000 or more units quickly to avoid bankruptcy." In 1992, all UK servicing and warranty repairs were outsourced to
Wang Laboratories, which was replaced by
ICL after failing to meet repair demand during the Christmas rush in 1992. Commodore International's Canadian subsidiary authorized
3D Microcomputers of Ontario to manufacture IBM PC clones with the Commodore brand in late 1993. Commodore exited the IBM PC clone market entirely during the 1993 fiscal year, citing the low profitability of this market. PC sales had remained relatively stable and, accounting for 37% of revenue from sales in 1993, had grown modestly as declines in both unit sales and revenues were recorded for the Amiga and Commodore 64 product lines. By 1994, only Commodore's operations in Canada, Germany, and the United Kingdom were still profitable. Commodore announced voluntary bankruptcy and
liquidation on April 29, 1994, causing the board of directors to "authorize the transfer of its assets to trustees for the benefit of its creditors", according to an official statement. With Commodore International having reported a quarterly loss in the US, hopes were expressed that European divisions might be able to continue trading and even survive the demise of the parent company, with a management buyout considered a possibility. Other possibilities included the sale of profitable parts of the company to other parties, with
Philips and
Samsung considered "likely choices". However, no sale was ever completed. == Post-bankruptcy ==