Commodore Seeks to Prove Turnaround Isn't Fleeting

Business

Technology

Adios Amiga: Commodore Goes in Another Direction

Don Clark
The San Francisco Chronicle

February 26, 1987

Nirvana for many entrepreneurs is selling out to a large corporation. But what happens after the founder buys the Ferrari?

All too often, the small unit is among the first to be dismembered when its new owner falls on hard times. Kodak, for example, bought Garlic Technology in 1985 and is now auctioning off the assets of the small Morgan Hill firm.

Or take a more significant case: Amiga Computer, which designed the personal computer of the same name and was bought by Commodore International in 1984 for $27.1 million.

Amiga, based in Los Gatos, has dwindled from 70 to about seven employees through layoffs and voluntary staff departures over the past year. The lease on its building expires March 31, and Commodore intends to consolidate its research and development elsewhere.

"In its present form, Amiga in Los Gatos will cease to exist," confirmed Mike Evans, Commodore's vice president of finance, in an interview.

The news comes at an ironic moment, when the rebounding Commodore is about to reaffirm the importance of the innovative Amiga design to its corporate computer strategy.

At the Hanover Fair in Germany next week, Commodore will unveil two new Amiga models, Evans confirmed. The Los Gatos group contributed, but the lion's share of the follow-on hardware design was carried out in Pennsylvania and Germany.

In addition to the original Amiga 1000, a new low-end model called the Amiga 500 is expected to compete with Atari Inc.'s 520 ST system and may sell for less than $1,000. Sources say the machine has the original model's excellent color and sound.

The Amiga 2000, a business-oriented machine at the higher end of the spectrum, is likely to be best known for options that make it compatible with the IBM PC-XT. It has expansion slots that can handle an optional circuit board enabling use of software based on Microsoft's MS-DOS operating system for IBM-compatible machines. Pricing is not clear, but may be around $2,000 for a system that includes monitor.

David Morse, the Amiga Computer founder who left as a result of the sale, applauds this proof that the Amiga product line will continue. He also notes that most of the original Amiga team have found other good jobs. On the other hand, they are not together.

"We had some plans for doing some pretty exciting things," Morse said. "Those are the kinds of things that won't happen."

KOREAN PR

Korean companies and South Korea's minister of trade and industry are in California on a multimillion-dollar buying mission. For example, Hyundai this week announced large orders of semiconductor manufacturing equipment from Varian Associates and Applied Materials.

Korean companies, certainly, do not want to depend on rival Japan for all their semiconductor manufacturing equipment. Yet the question arises, isn't this a public relations effort to counter the growing hostility to Japan's new electronics industries?

"Certainly," replied Jae Park, a Hyundai spokesman. "We believe in bilateral benefit on both sides."

SHORT TAKES

Items that that have fallen through the cracks lately, in no logical order:

-- In case you missed it, National Semiconductor Corp. last week celebrated its 20th year in Silicon Valley. The first major spinoff from Fairchild Semiconductor, National has grown from $7.2 million in fiscal 1967 to $1.5 billion in fiscal 1986.

-- Ford Aerospace and Communications Corp. in Palo Alto has successfully reactivated a NATO communications satellite that has been dormant for eight years. That is the longest time a satellite has "slept" and been switched back on.

-- Why not transfer software electronically to computer stores, to reduce costs of stocking thousands of products? Some ComputerLand Corp. stores will do just that, with an in-store duplicating system that also gives demonstrations to help customers choose what software to buy.

-- Baltimore-based Avalon Hill Game Co. has unleashed "Dr. Ruth's Computer Game of Good Sex," a $29.95 software package that enlists one to seven players to "answer questions about love, relationships and (of course), good sex." Which six people would you like to play with?

-- Among other deserving software, Activision has released "The Music Studio" for the Apple IIgs, a $79.95 program that is the first composition package to take advantage of the machine's color and sound capabilities. Look out also for Electronic Arts' "Music Construction Set," due out next week at $49.95.