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Personal Computer News
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Published in Personal Computer News #051
Atari Pins Survival Hope On 800XL - View From America
A weird little anxiety attach has been affecting the US micro industry for the past month. "Is Atari going down the tubes?" bared the front page of Infoworld, America's leading micro weekly. It may seem absurd to think that a company with 16 million video games and one million home computers installed in US homes could be allowed to just disappear, but the question marks continue to rise over Atari.
Will the 800XL sell strongly enough? International newspaper tycoon Rupert Murdoch is bidding to buy more shares in Warner, Atari's owners. What might Murdoch do if Murdoch could? New chairman James Morgan bravely rebuts the doomsayers and points to a revamped company which after a night of the long knives is free of the old fiefdoms and politics.
Even so, there is no hiding the anxiety at Atari as they wait to see what comes out of the courthouse door, Chris Craft (another company becoming involved with Warner) or the Bengal Murdoch.
Elsewhere the mainstream pundits keep chomping on Apple and predicting the Big Blue World. As though it is the only response open to them, the other manufacturers bend a knee, voluntarily or otherwise. When Coleco laid off 50 employees at its headquarters, Wall Street promptly slashed 15 per cent off Coleco stock, noting that on the Adam's slim profit margin 65,000 units a month was simply not enough to keep the banks at bay and meet the overheads.
At Commodore, smoke still swirls around the building after the eruption of Mount Tramiel. The common them from Wall Street to the micro press is that Commodore will have a hard time coming up with son-of-64 and that by the last quarter of this year it will be squeezed ever tighter by the downwardly mobile Apple II, PC Jr, and a horde of predicted Japanese wonder machines.
The pundits also point to the number of specialist dealers who won't sell Commodore machines again, after being caught out in Jack Tramiel's great spring offensive of 1983, when he halved the price of the C64.
The dreaded IBM effect, as it limbers up its portable PC, will blow a chill wind through the corridors of Compaq, Eagle, and other IBM-compatible portable manufacturers. Prophets of doom are out in force with pronouncements on non-IBM-compatible micro makers. Articles and columns pose the question: "How does a business machine break out of Catch 1-2-3?"
Lotus 1-2-3 is far and away the best-selling business software in the land. Hence the markteers of business machines that can't run 1-2-3 have had remarkably little to do lately.
So you develop an IBM clone to cash in, since it can run 1-2-3 and you and your venture backers are soon honoured guests at your bank? Sorry, but dealers have all the IBM-compatibles they can sell. Unless you're spending megabucks on television ads to start customer stampedes, you can forget it.
So instead you develop a wonderful non-compatible system with 256K of RAM, 32-bit processing and so on; but it won't run 1-2-3. You'll have to pay the dealers on your knees to get shelf space.
And so to the vision of IBM world domination, formed by the unstoppable urge or American business to shackle itself to IBM's progress, which will lead to a day three years hence when all businesses will be integrated blends of IBM workstations. In this scenario the sales of standalone micros for business customers will start falling back in 1985 and IBM will take control of the market after Apple goes bust.
All very gloomy stuff, but hard to believe in the light of new developments. This is the year of 32-bit chips, 1-2-3 faces hordes of competitors, and there are fascinating possibilities in mainframes.
The last word this week should lie with the hot-eyed brigade bravely soldering on - two professors at a Pasadena technology institute have wired 64 8088 chips into a 60" by 14" by 8" box called the Cosmic Cube and have developed software to synchronise the array to run up to three million instructions per second, for about $80,000.