Background Clive Sinclair, a former radio kit salesman, established his first company,
Sinclair Radionics, in 1962. The company made its name producing a wide range of cheap electronics aimed at the hobbyist market. Its products include
amplifiers, radios,
multimeters and other items which were generally sold in kit form to
hi-fi enthusiasts and other electronics hobbyists. The company entered a new market in 1972 when it launched the first "slimline" pocket calculator, the
Sinclair Executive. Radionics followed up by launching a wide range of pocket calculators. The company's subsequent expansion made it Europe's biggest calculator manufacturer by 1975. and
IMSAI 8080. This aroused interest among electronics hobbyists in the UK but relatively high prices and lower disposable income reduced the appeal of the American products.
New Scientist stated in 1977 that "the price of an American kit in dollars rapidly translates into the same figure in pounds sterling by the time it has reached the shores of Britain". Off-the-shelf personal computers were also available for the high end of the market but were extremely expensive; Olivetti's offering cost £2,000, and the Commodore PET, launched in 1979, sold for £700. There was nothing for the hobbyist at the low end of the market. Sinclair realised that this provided a useful commercial opportunity. Sinclair's first home computer was the
MK14, which was launched in kit form in June 1978. It was a long way from being a mass-market product. Its very name – MK standing for "Microcomputer Kit" – was indicative of its origins as a product developed by, and for, hobbyists. It had no screen but instead used an LED
segment display (though Science of Cambridge did produce an add-on module allowing it to be hooked up to a UHF TV); it had no case, consisting of an exposed circuit board; it had no built-in storage capabilities and only 256
bytes of memory; and input was via a 20-key
hexadecimal keyboard. Despite the limitations of the machine it sold a respectable 10–15,000 units; by comparison, the much more expensive
Apple II had only sold 9,000 units in the United States, a much bigger market, in 1978. This success convinced Clive Sinclair that there was an untapped market for low-cost computers that could profitably be exploited. Sinclair followed up the MK14 by producing the ZX80, at the time the world's smallest and cheapest computer, which was launched in January 1980 costing £99.95 (equivalent to £390 at 2021 prices.) The company conducted no market research whatsoever prior to the launch of the ZX80; according to Clive Sinclair, he "simply had a hunch" that the general public was sufficiently interested to make such a project feasible and went ahead with ordering 100,000 sets of parts so that he could launch at high volume. The design was driven entirely by the desired price – the machine had to cost less than £100 but still make a healthy profit. Its distinctive wedge-shaped white case concealing the circuitry and the touch-sensitive membrane keyboard were the brainchild of
Rick Dickinson, a young British
industrial designer who had recently been hired by Sinclair. As he later recalled of Sinclair's approach, "Everything was cost driven. The design was the face of the machine." The unconventional keyboard was the outcome of Sinclair's cost-cutting. It made use of a sheet of plastic, on which the keys were printed, overlaying a metallic circuit that registered when a key was pressed. This avoided the expense of providing a typewriter-style keyboard, though the design had many drawbacks when it came to usability and "feel". Inside the case, there were many more similarities with the ZX81. Like its successor, it used the Z80A microprocessor and had only 1 KB of on-board RAM. It came with a specially written BASIC interpreter on a dedicated ROM chip and could use a television as a display. It relied on an ordinary cassette tape recorder for data storage. The main difference between the two machines lay in the internal software; when the ZX81 was released, ZX80 owners were able to upgrade by the relatively simple expedient of plugging a new ROM onto the circuit board. The commercial success of the ZX80 made a follow-up product inevitable. The company was renamed Sinclair Computers in November 1980, reflecting its new focus, and became Sinclair Research in March 1981.
BBC Micro bid The launch of the ZX81 was catalysed in part by the
BBC Computer Literacy Project's plan to produce
The Computer Programme TV series, to be broadcast in 1982, aimed at popularising computing and programming. The BBC intended to commission an existing manufacturer to provide it with a BBC-branded home computer to tie in with the series. When Clive Sinclair heard of the project in December 1980, he wrote to the BBC informing them that he would be announcing a new version of the ZX80, to be called the ZX81, in early 1981. It would remedy some of the ZX80's deficiencies and would be both cheaper and more advanced. Sinclair wanted the ZX81 to be a candidate for the BBC contract and lobbied for its adoption. He pointed out that there were already 40,000 users of the ZX80 and that by the time the series was broadcast there were likely to be upwards of 100,000 ZX81 users. A prototype ZX81 was demonstrated to BBC representatives in January 1981, while Sinclair's local rival
Acorn Computers put forward their proposed Proton computer, a design – of which a prototype did not yet exist – based on the
Acorn Atom. To Sinclair's dismay, the contract to produce the
BBC Micro went to Acorn, which launched the machine in January 1982. Paul Kriwaczek, the producer of
The Computer Programme, explained his reservations in a March 1982 interview with
Your Computer: Sinclair was critical of the BBC's decision, accusing it of incompetence and arrogance. Shortly after
Acorn won the BBC contract the Government issued a recommended list of computers, including the
BBC Micro and
Research Machines 380Z, that schools could purchase, with the aid of a grant, for half price; Sinclair's computers were not included on the list. Sinclair responded by launching his own half-price deal, offering schools the chance to buy a ZX81 and 16 KB
RAM pack for £60, plus a ZX Printer at half price, for a total cost of £90. As the cheapest Government-approved system was £130, this was an attractive offer for some schools and about 2,300 bought Sinclair's package, although 85% adopted the BBC Micro.
Development and manufacture The development of the ZX81 got under way even before the ZX80 had been launched. Sinclair's chief engineer,
Jim Westwood, was given the task of improving the ZX80's hardware to reduce the number of components and thus bring down the cost. He also sought to fix some of the more annoying problems with the ZX80. Westwood and his colleagues found that the component count could be reduced greatly by combining eighteen of the ZX80's chips into a single
uncommitted logic array (ULA), a type of general-purpose chip full of logic gates that were connected up as the customer required during chip manufacture. This short-lived technology of the day was cheaper and quicker than the design of a customised logic chip, which typically required very high volumes to recoup its development cost.
Ferranti produced the new chip for Sinclair, who hailed Westwood's design as a triumph of innovation: "The ZX81 had four chips when our nearest competitor in this respect, the TRS-80, had 44." Only 70% of the
logic gates on the ULA were supposed to be used, but Sinclair decided to use them all to squeeze more functions in. This resulted in the machine becoming uncomfortably warm during usage. Computing folklore held that the ZX81 had to be refrigerated by balancing a carton of cold milk on top of the case. The ZX81's ROM was doubled to 8 KB, from the ZX80's 4 KB ROM. This enabled a fuller implementation of a version of
ANSI Minimal BASIC (termed
Sinclair BASIC by the company). Clive Sinclair re-commissioned a company called Nine Tiles, which had produced the ZX80 ROM, to develop the new ROM software for the ZX81. The code was written by John Grant, the owner of Nine Tiles, and
Steve Vickers, who had joined the company in January 1980. Grant concentrated on the software that drove the ZX81's hardware, while Vickers developed the new BASIC and the accompanying manual. Sinclair's brief to the pair was fairly non-specific but primarily concerned remedying a key defect of the ZX80 so that the new machine could be used for practical programming and calculations. Vickers later recalled: The new ROM incorporated
trigonometric and
floating-point functions, which its predecessor had lacked – the ZX80 could only deal with whole numbers. Grant came up with one of the ZX81's more novel features, a syntax checker that indicated errors in BASIC code as soon as it was entered (rather than, as was standard at the time, only disclosing coding errors when a program was run). Unfortunately for Vickers, he introduced a briefly notorious error – the so-called "square-root bug" that caused the square root of 0.25 to be returned erroneously as 1.3591409 – as a result of problems with integrating the
ZX Printer code into the ROM. Although it was eventually fixed, the bug became the subject of controversy and Sinclair was forced to replace some of the ZX81s sold to early customers. On a more positive note, Vickers' work on the manual was received favourably, being described in 1983 as "one of the classic texts on BASIC". Max Phillips commented in a
What Micro? retrospective: The task of designing the ZX81's case again fell to Rick Dickinson, who produced an updated version of the ZX80's wedge-shaped case. This time round, the design team were able to use
injection moulding, which enabled them to deliver a higher-quality case. Dickinson originally envisaged the ZX81 as "an expandable range of boxes following a vaguely modular approach with a common width", though this approach was eventually dropped. From start to finish, the design process took about six months. The ZX81 was launched on 5 March 1981 in two versions (though with identical components) – a pre-assembled machine or a cheaper kit version, which the user could assemble themself. Both versions were manufactured in
Dundee,
Scotland by
Timex Corporation Timex had not been an obvious choice of manufacturing subcontractor, as the company had little previous experience in assembling electronics. It was a well-established manufacturer of mechanical watches but was facing a crisis at the beginning of the 1980s. Profits had dwindled to virtually zero as the market for mechanical watches stagnated in the face of competition from the digital and quartz watches. Recognising the trend, Timex's director,
Fred Olsen, determined that the company would diversify into other areas of business. This shift by Timex came at an ideal time for Sinclair. The ZX80 had proved more popular than expected and Sinclair's existing manufacturer, a small electronics company in
St Ives, lacked the resources to deal with the demand. Timex took over production of the ZX80 late in 1980. The arrangement worked well for both companies and Timex took on the manufacture of the ZX81, aided by capital investment in its Dundee plant. Sinclair initially planned to produce 10,000 ZX81s a month, rising to 30,000 a month within a year. Sinclair's advertising in the United States provides an illustration of how the company perceived the ZX81's purpose: This approach to advertising was driven by Sinclair's reliance on mail-order marketing. It came with a high up-front cost in terms of purchasing space in publications but it had the advantage of ensuring that all sales were firm and pre-paid. A big splash on launch produced a large influx of cash at the outset of a campaign, though it did also depend on the advertiser having enough product to satisfy the initial surge in demand. The advertisements served an additional purpose of priming the market for over-the-counter sales by "getting the story across", as Clive Sinclair put it: "Not that big a proportion do buy on mail order, but they see the ads, and that helps to prepare them for buying when the item appears in the shops." Sinclair himself became a focal point for the marketing campaign, putting a human face on the business, while Sinclair Research was portrayed in the media as a plucky British challenger taking on the technical and marketing might of giant American and Japanese corporations. As David O'Reilly noted, "by astute use of public relations, particularly playing up his image of a Briton taking on the world, Sinclair has become the best-known name in micros." The popular press soon latched onto the image. His "Uncle Clive" persona is said to have been created by the gossip columnist for
Personal Computer World, while the media praised Sinclair as a visionary genius (or even, in the words of
The Sun, "the most prodigious inventor since
Leonardo"). As Ian Adamson and Richard Kennedy put it, Sinclair outgrew "the role of microcomputer manufacturer and accepted the mantle of pioneering
boffin leading Britain into a technological utopia". Pricing was central to the marketing strategy, as it had been through Sinclair's career. The ZX81 had been designed to meet a £70 price point and was launched at a price of £69.95 (built) or £49.95 (kit). One Sinclair brochure presented a side-by-side comparison of the ZX81 with the four machines that Sinclair considered its main rivals – the
Acorn Atom,
Apple II Plus,
Commodore PET and
TRS-80. The comparison highlighted the vast differences in cost, from £630 in the case of the Apple II Plus to just £70 for the ZX81, though even by Sinclair's own comparison the Apple was by far the more capable machine. According to Sinclair himself, the £69.95 price was chosen after applying the "
experience curve" developed by the
Boston Consulting Group. Sinclair's prior experience in the calculator market had highlighted the fact that a product will be more profitable selling at (for instance) twice the manufactured cost than at three times. He could have launched the ZX81 at a higher price, marketing it in a more traditional way as a premium product, but chose not to. In effect, he used the lower price to establish an unassailable lead before the competition moved in. An essential part of Sinclair's marketing strategy was to use regular cost-cutting at strategic intervals to maintain market share. Ian Adamson and Richard Kennedy comment that Sinclair's approach was "to secure and extend [his] market lead and panic the competition. While most companies reduce prices when their products are in steep decline, Sinclair tends to discount shortly after sales have peaked. The advantage of his approach is that vacillating customers are drawn into the fold while the product's promotion retains a commercial urgency, and the costings of the competition are thrown into utter disarray." This tactic proved highly successful, with Sinclair announcing by March 1982 that it had sold 250,000 ZX81s worldwide. 50,000 computers were sold each month, 60% outside the UK, despite Sinclair and W. H. Smith being the only distributors. Despite the launch of its successor, the
ZX Spectrum, Sinclair reportedly intended to increase ZX81 production to 150,000 a month. When sales fell after the Spectrum's debut, Sinclair reduced the price of the pre-assembled version to £49.95 in May 1982. It was cut by another £10 the following April. Despite the increased competition from much more capable computers, the ZX81 was still shipping in excess of 30,000 units a month even as late as July 1983, more than two years after it had been launched. By that time, according to Sinclair Research, over 1.5 million ZX81s had been sold. Selling the ZX81 over the counter was seen as something of a gamble and Rowland's colleagues were initially unenthusiastic about the scheme. Branch buyers thought that the ZX81 was unlikely to sell more than 10–15 units per branch at launch. Rowland himself thought that the ZX81 would sell about 10,000 units during the first five months of the retail agreement, equivalent to one month's mail order sales by Sinclair. Sinclair launched the ZX81 in the United States in November 1981 at a price of assembled () and in kit form (), initially selling directly to the American market by mail order. To be useful the computer needed an extra RAM pack which cost (). Sales reached 15,000 a month by January 1982, while
American Express sold thousands more to its own customers. In February 1982 Timex obtained a licence from Sinclair to sell the ZX81 directly through thousands of US retail outlets, paying Sinclair Research a 5 percent royalty on all Sinclair hardware and software sold by Timex. The company was later to produce its own licensed clones and variants of the ZX81. By August 1982 Sinclair had lowered the American mail-order price of the assembled ZX81 to and kit to , and its advertisements stated that "more than 10,000 are sold every week". In December 1981
Mitsui obtained rights to distribute the ZX81 in Japan, selling it by mail order for (equivalent to £83 in 1982 prices), and had sold 5,000 units by July 1982. The Japanese market's favourable reaction to the ZX81 led Mitsui to begin selling the ZX81 over the counter in large bookshops from September 1982, with annual sales of 20,000 units predicted. In the Netherlands, the regular Sinclair ZX81 was for sale as well as a
Bang & Olufsen branded version called
Beocomp. The ZX81 was also sold for a while in
duty-free shops at UK airports. However, this fell foul of government export restrictions aimed at preventing the
Soviet bloc countries from obtaining Western high technology goods. It was not uncommon for visitors from the
Soviet Union and other eastern European countries to pick up gadgets in Western countries with the aim of
transferring their technology to their own states' industries. In 1983 the government ordered that the ZX81s were to be withdrawn from sale at airports. There was no such restriction on sales to communist China and in November 1983 Sinclair Research announced that it had signed an agreement to export ZX81 kits to a factory in
Guangzhou, where they would be assembled for the Chinese market. == Reception ==