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       A Chronological History
        of Commodore Computers
               Part II
           by Ian Matthews


1984

    Jack Tramiel leaves Commodore.

[January] The 1984 Consumer
Electronics Show showcased Commodore's
next computer, the 264, based on the
"TED chip" (acronym for Tramiel
Editing Device).

[January] According to a statement
released in January of 1984, Tramiel
said, "Personal reasons prevent my
continuing on a full-time basis with
Commodore." Irving Gould recruited
Marshall F. Smith from Thyssen-
Bornemisza NV, a conglomerate based in
the Netherlands Antilles, to replace
Tramiel.

[April] Commodore International
launches the Commodore PC at the
Hanover Fair in Germany.

[April] Commodore International
launches the Commodore Z8000 at the
Hanover Fair in Germany.

[Spring] Commodore stops manufacturing
the VIC-20.

[June] Commodore announces the
Commodore 16 at the Consumer
Electronics Show. The machine looks
like the VIC-20 and Commodore 64, but
has 16KB of RAM, and is expected to
sell for around $100, to be marketed
as "The Learning Machine".

[June] Commodore announces the renamed
Commodore 264 as the Plus/4. It will
now feature four built-in programs,
not just one. Price will be around
US$300.

[June] Commodore announces the DSP
1101 letter-quality daisy wheel
printer (designed for the Plus/4), the
MPS 802 dot matrix printer (Re-named
1526), the MCS 801 color dot matrix
printer (re-named Okimate-10) and the
cost reduced MPS 803 dot matrix
printer (which replaced the MPS-801).

[July] Jack Tramiel, former president
of Commodore International, buys a
controlling interest in the Atari home
computer and video game divisions from
Warner Communications, for $240
million in long-term notes. Warner
retains Atari's coin-operated game
division and home communications
venture Ataritel.

The Amiga Inc. team was trying to find
a company to buy their technology and
to employ them, since they ran out of
money. Many companies were interested
in the custom chips of the Amiga, such
as Sony, Apple, Philips, HP, etc.

Atari's president, Jack Tramiel, who
had just left C= after purchasing
Atari secretly, tried to get his
revenge by buying Amiga Inc. He lent
Amiga Inc. $1,000,000, to be payed
back one month later.

When the month was almost up, it
became apparent that Amiga Inc. would
not be able to pay him back, so he
offered 98 cents per share for the
company. Amiga Inc. thought this was
unacceptable, so they looked for
someone else to buy them. Just 2 days
before the deadline, C= came in and
began to talk to Amiga Inc.

They managed to get C= to raise its
bid to $4.25 a share, and just before
the deadline ended, C= gave them
$1,000,000 to pay back Atari, on the
condition that C= would get to buy
Amiga Inc.

1985 A pretty new "Amiga" gets
     all the attention

[January] Commodore unveils the
Commodore 128 Personal Computer. It
functions as three computers in one:
a complete Commodore 64, a CP/M mode,
and a new 128KB mode.

[July] Commodore unveils the new
Amiga 1000 at a star-studded gala
held at Lincoln Center in New York.
It features a multitasking, windowing
operating system, using a Motorola
68000 CPU, with 256KB RAM, and 880KB
3.5-inch disk drive, for $1300.

[?] Mimic Systems announces the
Spartan, a hardware upgrade for the
Commodore 64 that turns it into an
Apple IIe. (It would take several
months before the actual units are
available to the public.) (By the
time this famous "vapor ware" made it
to the market, one could buy a used
Apple IIe for less. DMM)

In an effort to make Commodore
profitable, Smith took to downsizing,
cutting the payroll by more than 45%.
Though the company had an impressive
$339 million in 1985 holiday
revenues, it made only $1 million for
the quarter after paying off about
1/4 of its bank debt.

Commodore suffered through Fiscal
Year 1985, losing $237 million, and
getting into trouble with its
creditors. The banks granted a much
needed one-month extension on
Commodore's loans, and, with the
success of the company's second-best
Christmas sales ever behind them,
Commodore defied the Gods of
Bankruptcy yet again.

1986

In March 1986, Thomas J. Rattigan
replaced Smith as Commodore's CEO.
Rattigan was hired in April of 1985
with the understanding that he would
replace Smith, who remained on as a
director. Rattigan's objective during
the first few months of his leadership
was clear - cut costs in order to
stabilize Commodore's position,
allowing it to rebuild.

Once again, the payroll was trimmed
from top to bottom, and three plants
were closed in five months. New
controls were added in the finance
department to prevent the sloppy
reporting that had undermined Smith's
leadership.

Commodore continued to sell
respectable numbers of its $150 C-64
throughout 1986. The Commodore 128, a
successor to and more powerful machine
than the C64, was selling for $300 at
the time, which also helped to keep
the company afloat.

1987

Rattigan's policies worked. By March
of 1987, Commodore had caught up on
its loans and posted a $22 million
earning in the quarter ending
December 1986. It also had $46
million in the bank, the most cash
since 1983, its most profitable year.

[February] Commodore announces the
Amiga 500. It features a 68000
processor, 512KB RAM, floppy disk
drive, and custom chips for
animation, video, and audio.

[February] Commodore announces the
Amiga 2000.

[March] On April 22, 1987, Rattigan
was replaced by Chairman Irving
Gould, the venture capitalist who had
been involved with Commodore for over
20 years. It is unclear as to why
Rattigan was replaced after turning
the company around and posting $28
million in profits over the four
quarters ending in March 1987.

Rattigan himself claimed that he was
forced out by Chairman Gould due to
personality conflicts and that Gould
was upset about Rattigan getting
credit for the company's turnaround.

Gould argued that the comeback in the
U.S. was insufficient compared to its
rebound in overseas markets, which
accounted for 70% of its sales.
(There are reports of the famous
board meeting showdown between Gould
and Rattigan where Rattigan was
physically removed from the premesis,
later to win a $9M suit against the
company.)

In fact, despite its profitability,
Commodore's U.S. revenues had
declined by 54% in the same four
quarters.

According to Gould's ideology, the
North American operation was to be a
sales and marketing extension of the
company, rather than the unwieldy,
semi-independent entity it had
become. For the third time in
Commodore history, a new leader began
his term at the helm by drastically
downsizing.

Under Gould's reign, the payroll was
cut from 4,700 to 3,100, including
half the North American headquarters'
corporate staff, and five plants were
closed.

[October] Industry veteran Max Toy,
generally credited with engineering
the expansion of ITT Corp.'s Xtra
Business Systems Division's PC product
line and strengthening its
distribution channels, was named
president and chief operating officer
of Commodore Business Machines Inc.

Toy said he resigned his post at Xtra
Business Systems "for a greater
opportunity."

"Commodore is a significant company
that has solid foundation stones to
build from," he said, indicating that
he intends to "solidify Commodore's
relationships not just with
distribution channels but also in
establishing strategic alliances."

In his new post, Toy reported
directly to Commodore International
Ltd. chairman and chief executive
Irving Gould.

[?] Commodore launches its first IBM
PC-compatible machines, the PC10-1
and PC10-2. Both use a 4.77 MHz
Siemens 8088.

1989

[January] Commodore announced that 1
million Amiga computers had been sold.

[February] Irving Gould announced that
Mehdi Ali was appointed as President
of the Company. Mr. Ali, then a
managing director of Dillon, Read &
Co., Inc., New York, was a special
advisor to Commodore for the previous
three years.

Mr. Gould commented: "Having worked
closely with Mr. Ali for the past
three years, I believe we are
fortunate that he has agreed to expand
the role he has been playing in the
restucturing of Commodore into a major
comeptitor in the microcomputer
industry."