The Coming Crisis in Home Computers

racing to the bottom

On June 19th of 1983, the New York Times ran an article by this title. The article opened with a bit about Texas Instrusments, and Bill Cosby making a joke about how it is rather easy to get people to buy computers if you pay them $100 to do so.

This was during a price war with Commodore. From autumn of '82 to June of '83, the TI-99/4 went from $400 to sub-$100 prices. Ultimately, the TI-99/4A (successor of the 99/4) was discontinued as a result of this price war. Texas Instruments went from a decent leader in silicon innovation to a failed personal computer company, to an also-ran in the x86 space. The founders of Compaq came from TI and established the PC-compatible industry in which TI was also an also-ran until 1998 (at which point TI's stuff was sold to Acer). TI then became the calculator company.

The article does make a point that I quite like. The argument is that the personal computer industry did not truly start until 1982. Home computers before then were either difficult to use, or outrageously expensive, or both.

Of course, John Roach (CEO of Tandy) didn't have a problem with the situation at all. Tandy had done radios as "Citizen" and that started to fail, and the company needed a new product. One of their engineers (Don French) went to a computer store and met Steve Leininger. French invited Leininger to join Tandy. On August 3 of 1977, Tandy revealed the TRS-80. Tandy would hold 60% of the computer market with their trash 80s. Where TI, Commodore, and Atari all failed to see what IBM's entrance meant in the early 80s, Tandy did not. By the time this Times' article ran, Tandy would have been well into the development of the Tandy 1000. The first fully IBM PC compatible home computer which was, by many, said to be a better IBM than an IBM. This one machine allowed Tandy to hold on to about 10% of the US computer market despite IBM's absolute dominance of the industry. Tandy sold to AST in May of '93. At the time of this article though, they had quite a road ahead.

The Timex Corporation had been selling the Sinclair ZX81 as the Timex Sinclair 1000. This was the first computer to sell for less $100 in the USA. I will be covering this machine in way more detail at a later date, but here in this article a few things about it are said. First, the article says that the machine was good for little more than video games and education. Second, it mentions that sales were slowing despite a price cut to $50. This is hilarious, because when it dropped to that price point, many of the sales were due to a program by Commodore. Commodore offered a $99 rebate toward the purchase of a Commodore 64 if the buyer would trade in any computer or game console. Naturally, this meant that savvy buyers would grab a Sinclair ZX81 and trade it in for $100 off of a Commodore 64 and pocket $50.

So, the article closes out with admonitions of doom and gloom not unlike the games crisis which at this point was starting to get serious, and also the mention of the impending introduction of the IBM "Peanut" which was the IBM PC Jr. The PC Jr was DOA, and the Tandy 1000 at it alive; starting a short lived standard of "Tandy graphics and sound".

The article serves as a nice time capsule into a critical time in the history of computing.