Commodore International Ltd. yesterday unveiled its Amiga computer, a machine it hopes can spark some life into the sagging home and personal computer market.
Stuffed with custom-designed chips and a powerful microprocessor, the $1,295 Amiga is Commodore's most serious bid yet to transform itself from a high-volume manufacturer of low-end home computers to a marketer of high-quality personal computers.
"It's a home machine and also a business machine," said Commodore chief executive officer Marshall Smith. "It's got speed, color and compatibility with IBM personal computers."
The Amiga is set to go on sale in September, Smith said, and the company will try to sell upwards of 200,000 by the end of the year. Commodore will distribute the machine through computer specialty stores rather than the mass merchandisers such as Toys 'R Us that have sold the Commodore 64 and Vic 20.
Commodore's new machine is the first major new personal computer launched since IBM ceased production of its PCjr earlier this year. Commodore is counting on it to inject some new profitability into a company whose fortunes have tumbled along with the slump in the home computer market. The manufacturer of the popular C-64 computer has seen its computer inventories skyrocket to more than $400 million worth. The company reported nearly $21 million in losses last quarter.
"Obviously, they can't turn an industry around by themselves," said Tim Bajarin, an industry analyst with Creative Strategies, a marketing firm. "But they have an interesting potential to capture what I call the small small business: the butcher, the baker, the candlestickmaker. That group might actually grab hold if it's marketed right. But it's a hard sell. Can a company known as a toy computer company convince people they're serious about business?"
The Amiga, with its dazzling blend of video and audio technologies, is Commodore's gamble that consumers and professionals who work at home will pay for computer technology that is far more powerful than virtually any other personal computer on the market.
Relying on a proprietary operating system similar to Apple's Macintosh, the Amiga offers stereo-sound and speech-synthesis capabilities as well as broadcast-quality computer graphics. The machine even can be programmed easily to handle information entered from touch-tone phones.
"The Amiga is genuinely exciting," asserted Marty Alpert, president of Tecmar Inc., a computer peripherals company. "It has a chance to become a significant machine in the business environment."
But most observers assert that marketing and distribution -- not technology -- will be the key to the Amiga's success or failure. Citing Apple Computer Inc.'s disappointment with its innovative Macintosh computer, they are skeptical of the Amiga's chances in today's murky retail channels.
"If anybody in the field isn't aware by now that technology doesn't sell product, they're a fool," said Len Forace, president of Computers & Accessories, a Campbell, Calif., personal computer store. "They're going to have a hell of a job convincing someone to pick up the line."
Forace pointed out that the computer retailing industry is in a state of consolidation and most retailers are plagued with excess inventory, making conditions for a product launch far from ideal.
Commodore executives argue that retailers will welcome a new product as a chance to stir new interest in personal computers.