Commodore Pins Its Hopes on the Amiga : Contends It’s Not a Home Computer
Here comes another personal computer, one that bids to heat up the depressed market and put home-computer giant Commodore International back on its feet. But whether it’s a home computer or an office computer isn’t yet clear.
It is the Amiga, to be unveiled by Commodore at a black-tie-optional operation Tuesday night at Lincoln Center in New York. The tony surroundings are apparently intended to make people forget Commodore’s image as a maker of cheap computers for kids to play games on.
Ask Commodore what the Amiga is and Clive Smith, vice president for planning and development, calls it a serious machine for the office and talks about the business software being written for it. Smith snaps irritably, “The Amiga is not a home computer.”
But don’t tell that to Trip Hawkins, one of the Amiga’s biggest boosters. Hawkins’ software company, Electronic Arts, specializes in home entertainment and is busily writing programs for the Amiga. He says its color graphics and sound capabilities make it the ultimate home computer and declares, “The Amiga is capable of causing a rebirth of the explosion in home computers.”
Sums up Richard Matlack, president of market researcher Infocorp: “It’s a schizophrenic machine.”
Commodore, of course, would like to sell the Amiga to both markets, and by most accounts it is a technologically impressive machine. But it remains to be seen whether Americans can stand any more confusion on the computer front.
The hardest-hit part of the computer industry during the current downturn has been machines costing less than $1,000--a market dominated by the Commodore 64. There is now broad agreement that many potential customers decided they’d been oversold on the usefulness of cheap computers, the expensive ones weren’t worth it, and $300 videocassette recorders were more fun anyway.
The slump in sales forced several Commodore competitors out of business and, last Christmas, left Commodore with a staggering $400-million inventory of unsold computers. The company plunged $21 million into the red in the quarter ended March 30 and mightn’t return to profitability before the Christmas season.
The Amiga, originally intended as another under-$1,000 machine, was redesigned to take advantage of what some analysts now see as a merging of the office and home computer markets. Specifically, Commodore hopes to take on Apple’s Macintosh. Though Commodore’s Smith resents the idea, analysts say the Amiga will also be competing with the under-$1,000 but powerful new Atari ST, dubbed the “Jack-intosh” after Atari owner and ex-Commodore President Jack Tramiel.
Buyers will be able to get a basic Amiga machine for $1,300, sources say, while the most powerful version with a memory capacity of about 512,000 characters and a color monitor will list for $1,995. A comparably equipped Macintosh now costs about $2,400--a figure that presumably will have to come down as the Amiga becomes widely available.
Commodore won’t discuss the machine, but Hawkins, whose firm has a stake in the Amiga’s success, calls it “a huge step forward” in features for the money. “It has a massive opportunity in the home. If they can eventually get the price down below $1,000 it will sell like hot cakes.”
Matlack credits the computer for having features the Macintosh doesn’t, including speed, color and a full-size screen. But he’s cool on its chances, in large part because the biggest retail chains aren’t handling the Amiga and it’s too expensive for Commodore’s usual mass-market outlets.
Commodore officials are telling software developers that the machine will be sold through about 500 outlets initially, which is roughly 10% of all computer specialty stores.
At $1,300 and up, “You’re not going to sell it at K mart. And the stores that handle IBM and Apple and Compaq and AT&T; don’t have much shelf space left over,” says Michael Moritz of Technologic, a computer investment newsletter.
Citing also an initial shortage of Amiga software, Matlack says Apple will have about a year to make its overdue improvements on the Macintosh before Commodore’s machine has a chance to sell in large volume. He predicts no more than 50,000 shipments this year, or about one-third of what the company wants. “It’s not going to be the salvation of the company,” he says.
Perhaps, but not for lack of trying. Electronic Arts expects to produce 13 programs for the Amiga this year, including a basketball game starring Dr. J and Larry Bird. It features what Hawkins called the authentic sound of tennis shoes squeaking their way across the Boston Garden, an old gymnasium noted in basketball circles for its parquet floor.
Says Hawkins, “The Amiga makes the experience of using software much more compelling.”