The Rise & Fall of Commodore: From PC Dominance to Bankruptcy

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Having been already showcased 7 months earlier at the Consumer Electronics Show. The Commodore 64 lived up to its hype. In just a couple of years, the Commodore 64 became the best-selling PC in history selling more than 15 million units. It is officially recognized by the Guinness book of world records as the best-selling PC in history. The Commodore 64 outsold every other PC company including IBM, Apple, and Compaq. Commodore was one of the largest computer companies in the world but by the end of the 90s Commodore had ceased to exist having gone bankrupt.

Commodore was initially started by Jack Tramiel as a government contractor, Commodore would expand further and begin manufacturing its own equipment, including calculators. Commodore’s calculators were built using Texas instruments' calculator chips, this became a problem when in 1975 Texas Instruments decided that it wanted to enter the calculator business, Texas Instruments released its own calculator that was the price of the calculator chips they made which most other calculator companies used, this meant that if calculator companies wanted to compete with the cost of TI’s calculator they would have no room for profit which led to many of them being driven out of business. But Commodore refused to concede defeat. They went searching for other companies that created calculator chips, during this search they came across MOS Technology which was a chip manufacturer that produced calculator chips. MOS technology was having financial troubles and so Commodore decided to acquire the company outright.

In 1976 Chuck Peddle an employee at MOS Technology and the designer of the 6502 microprocessor knew the power of his microprocessor and managed to convince Commodore CEO Jack Tramiel that calculators were a dead end and that Commodore should make its own computer using the 6502 microprocessor. At first, they considered purchasing an existing design, in September 1976 Peddle got a demonstration of Jobs and Wozniak's Apple II prototype. Jobs was offering to sell it to Commodore, but Commodore considered Jobs's offer too expensive. So Commodore decided that it was going to build its own PC. So Chuck Peddle moved to California and assembled a small team to build a machine called the Commodore PET 2001.

The computer Commodore was building required a programming language that people could use to program on it, at the time the best one available and practically the only programming language available was Microsoft Basic so the team contacted Bill Gates. Bill Gates initially wanted a licensing agreement that stipulated that he would get one dollar for every machine Commodore sold that used the Microsoft Basic programming language, but CEO Jack Tramiel offered him an upfront fee of $50 000 which Bill Gates accepted.

Various PET models were manufactured between 1977 and 1982. The PET was most successful in the U.S. and Canadian education markets because of a genius marketing campaign by Commodore which was a "buy 2, get 1 free" program offered to schools as part of a promotion that also allowed Commodore to right off the free computer on its taxes as a donation to an educational organization.

This computer was the Commodore Vic-20, the computer got its name from the Video Interface Chip that Commodore had designed, the chip was originally designed for arcades and video game consoles but Commodore struggled to find a market for it so after heavy revisions to the Chip’s design it was used in the Commodore Vic-20. The Vic-20 featured color display capabilities, which the first Commodore didn’t have, and heavily focused on gaming. Commodore took out advertisements featuring actor William Shatner as its spokesman.

The VIC-20 was a bestselling computer, becoming the first personal computer to sell over a million units. In total, 2.5 million computers were manufactured. But its decline would begin in the summer of 1982 when Commodore unveiled the Commodore 64, a more advanced machine.

Commodore initially launched with a price of $595 but within a couple of months, they had dropped to $300. Aggressive pricing of the C64 is considered to have been a major catalyst in the video game crash of 1983. In January 1983, The success of the VIC-20 and C64 contributed significantly to the exit from the home computer market by Texas Instruments and other smaller competitors. Commodore had finally gotten its revenge on Texas Instruments after they had nearly driven Commodore out of the calculator market all those years ago.

In 1965, Commodore was experiencing some financial issues to get out of this situation they sold 17% of the company for $400 000 to an investor called Irving Gould.

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