CompuServe Messages

Here is a summary of an article that appeared in ELECTRONICS magazine, the June 2 issue: The article begins with a brief financial history of CBM and there are bar charts showing sales and profits(losses). It quotes Thomas Rattigan as saying that Commodore is heading toward a profitable fiscal 1987. Nigel Shepherd, Commodore general manager of North American Operations said "The turnaround did in fact start last September. We are confident we'll be pretty close to break-even in the June Quarter, no more than 5% up or 5% down. And we're totally confident we'll be in the black for the next two quarters." The article quotes Norm DeWitt of Dataquest as saying the under-$1000 computer market niche will slide to 1.9 million units from the 2 million in 1985 following a one-third reduction last year. He points out, however, that US consumers are willing to pay more for home computers though the numbers are fewer. The article says, "Shepherd and Rattigan..are facing more hard times and hard decisions as they try to turn their company around." The article mentions the layoffs which have reduced the head count (my words) by 40% in the last year to 3400. The "re-skinned 64" with its GEOS operating system was mentioned as one effort to boost revenues. Another plan calls for the US introduction of the PC-10 and PC-20 IBM clones which are heavily back-ordered in Europe. "Commodore's most controversial move has long been cast in concrete: the decision to move upscale. The company went shopping for technology and found Amiga, Inc., a small Los Gatos startup." "..But Amiga sales have been slow: DeWitt (Dataquest) estimates Commodore shipped fewer than 40,000 units last year. (Commodore won't comment.)"[ Comments about whether it's priced within its niche] "Shepherd says shipments are up in North America, with 6,000 to 7,000 units moved in April. And in Europe, where Commodore boasts a high-tech business computer reputation (as opposed to its tarnished US image as a 'toy computer' maker), the introduction of the Amiga was greeted enthusiastically last month, with the first shipment topping 5,000 units." Alluding to the recently rescinded price 'reduction', Shepherd said, "We intend to continue to price-reduce the Amiga as quickly as we can. The target for next year for the Amiga is to do two things simultaneously – enhance it and reduce its price." The enhancement is then described as a "minimum of 2 megabytes of memory and built-in compatibility with IBM's line of MSDOS-based Personal Computers. "The likely scenario for 1987, Shepherd suggests, is to cut the existing Amiga's price to $995 and introduce a new, upgraded Amiga that will reside in the $1,500 price range."[the one described above] DeWitt of Dataquest, in speculating about the Amiga's price said that it ought to be at about $700 "for it to have any real market strength." DeWitt adds "They have plenty of room to cut." Rattigan in a rare interview told ELECTRONICS that the media hype that "Commodore's future depends on the Amiga" wasn't fair. He said that the 64 and 128 are the real bread-and-butter products. There was more, but I'm tired of typing. This is the essence of the article.