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The C64 faced a wide range of competing home computers at its introduction in August 1982. With an impressive price point coupled with the C64's advanced hardware, it quickly out-classed many of its competitors. In the United States the greatest competitors to the C64 were the Atari 8-bit 400 and 800, the IBM PC and the Apple II. The Atari 400 and 800 were very similar in hardware terms, but it was very expensive to build, which forced Atari to redesign their machine to be more cost effective. This resulted in the 600XL/800XL line and the transfer of their production to the Far East. The IBM PC and the now aging Apple II were no match for the C64's graphical and sound abilities, but they were very expandable with their internal expansion slots, a feature lacking in the 64.
All three machines had a standard memory configuration of 16K, 48K less RAM than the C64. At US$1,500, the IBM PC and Apple II were 3 times as expensive, while the Atari 800 cost a mere $899. One key to the C64's success was Commodore's aggressive marketing tactics, and they were quick to exploit the relative price/performance divisions between its competitors with a series of television commercials after the C64's launch in late 1982.
Commodore sold the C64 not only through its network of authorized dealers, but also placed it on the shelves of department stores, discount stores, and toy stores. Since it had the ability to output composite video, the C64 did not require a specialized monitor, but could be plugged into a television set. This allowed it (like its predecessor, the VIC-20) to compete directly against video game consoles such as the Atari 2600.
Aggressive pricing of the C64 is considered to be a major catalyst in the video game crash of 1983. In 1983, Commodore offered a $100 rebate in the United States on the purchase of a C64 upon receipt of any video game console or computer. To take advantage of the $100 rebate, some mail-order dealers and retailers offered a Timex Sinclair 1000 for as little as $10 with purchase of a C64 so the consumer could send the computer to Commodore, collect the rebate, and pocket the difference.[4] Timex Corporation departed the marketplace within a year. The success of the VIC-20 and C64 also contributed significantly to the exit of Texas Instruments and other competitors from the field.
In 1984, Commodore released the Commodore Plus/4. The Plus/4 offered a higher-color display, a better implementation of BASIC (V3.5), and built-in software. However, Commodore committed what was perceived by critics and consumers as a major strategic error by making it incompatible with the C64. To top it all off, the Plus/4 lacked hardware sprite capability and had much poorer sound, thus seriously underperforming in two of the areas that had made the C64 a star.
In the United Kingdom, the primary competitors to the C64 were the British-built Sinclair ZX Spectrum and the Amstrad CPC 464. Released a few months ahead of the C64, and selling for almost half the price, the Spectrum quickly became the market leader. Commodore would have an uphill struggle against the Spectrum, it could no longer rely on undercutting the competition. The C64 debuted at £399 in early 1983, while the Spectrum cost £175. The C64 would later rival the Spectrum in popularity in the latter half of the 1980s, eventually outliving the Spectrum when it discontinued in December 1990.
Despite a few attempts by Commodore to discontinue the C64 in favour of other, higher priced machines, constant demand made its discontinuation a hard task. By 1988, Commodore were selling 1.5 million C64s worldwide. Although demand for the C64 dropped off in the US by 1990, it continued to be popular in the UK and other European countries. In the end, economics, not obsolescence sealed the C64's fate. In March 1994, at CeBIT in Hanover, Germany, Commodore announced that the C64 would be finally discontinued in 1995. Commodore claimed that the C64's disk drive was more expensive to manufacture than the C64 itself. Although Commodore had planned to discontinue the C64 by 1995, the company filed for bankruptcy a month later, in April 1994. |
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