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By Ian Adamson and Richard Kennedy

Sinclair goes West
(adapted from chapter 8)

As the Spectrum looked set to secure Sinclair's dominance of the UK home-computer market, plans were already well advanced for the company's assault on the US. In July 1982, Timex launched the TS1000 in the States, so this seems an appropriate point at which to chronicle the relationship that developed between the two companies and outline their American ventures.

In 1981 Fred Olsen took the first steps in the rescue of his floundering Timex Corporation by diversifying into assembly and manufacture in the U K. Initially, Sinclair approached Olsen solely with a view to using Timex for the complex flat-screen production. The relatively straightforward ZX81 assembly could have been handled by any one of a number of alternative subcontractors. Desperate to develop the diversification strategy as quickly as possible, Timex persuaded Sinclair to let the Dundee plant handle the microcomputer assembly. By December, 50,000 units were rolling off the production line.

In January 1982, Sinclair Research announced a licensing deal with Timex, allowing the former watch manufacturer to market Sinclair technology in the States. Although the success of the ZX81 and imminent Spectrum mania spelt phenomenal growth for Sinclair's company, Research was still far too small to make a sustained impact on the enormous American market. The deal with Olsen's floundering giant offered Sinclair a satisfyingly economic solution. Although Timex had very little to offer the States in terms of product, the company had maintained its network of 170,000 retail outlets, including the Sears, K-mart and Service Merchandise chains. On signing the licensing deal, Sinclair was able to tap into a vast distribution network without the enormous capital outlay such an operation would normally require. The terms of the arrangement were to prove extremely profitable for Sinclair. Timex would pay a 5 per cent royalty on all Sinclair hardware sold in the US. In addition, Olsen had agreed to fork out a further 5 per cent on all Sinclair-originated software and 2.5 per cent on any software marketed by Timex but produced by companies other than Research.

Prior to signing the licensing deal, Sinclair's business in the States had been conducted almost exclusively on a mail-order basis. In spite of the limitations of such an approach, Research had done surprisingly well with the American hobbyists. Promoted by what Informatics magazine described as a 'cheeky' advertising campaign, Sinclair satisfied a gap in the US market that had yet to be addressed by home-based companies. By June 1981, Sinclair Research was shipping 18,000-20,000 ZX81s a month to the States, which in those days exceeded the combined unit sales of market leaders Tandy, Apple and Commodore. As a footnote to this impressive performance, a number of contemporary reports suggest that on arrival only one in three of the machines shipped actually worked.

In October 1981, Sinclair finalized a deal that proved to be the perfect promotional vehicle for the company and its products. American Express undertook to test market the ZX81 to its 9.5 million mail-order customers, who were offered the privilege of picking up the machine for $150. In a statement from Sinclair's Boston office as empty as it was optimistic, a spokesman proclaimed, 'The demographics are right. Sinclair believes that American Express cardholders are representative of the kind of people who will want to buy his products, and American Express think the same.'

Latching on to Sinclair's self-promotion as the paradigm British eccentric, the American financial press generously heralded him as a maverick dark horse of the new technology. Having relished steady but profitable incursions into the US market by England's 'thin, unprepossessing inventor', those in the know anticipated a wealth of colourful copy when the Olsen deal was announced.

No one could suggest that at the beginning of the campaign the advance publicity failed to make the transition into an appropriate volume of dollars. When Timex announced the launch of the TS1000 in July 1982, the company adopted the standard promotional approach of establishing a toll-free phoneline to answer the queries of potential customers. No one could have predicted the 50,000 calls a week prompted by the campaign. It seems that many people dialled the Timex number simply to discuss their queries about microcomputing in general; nevertheless there were few at Timex inclined to scepticism over any promotion that at one point generated a staggering 5200 inquiries an hour.

By the time Olsen's company launched the TS1000 in the States, Sinclair had already creamed the lucrative hobbyist market via his adverts in the specialist magazines. According to market researchers Future Computing, Sinclair's company had sold 150,000 ZX81s into the US by the time the licensing deal with Timex was formalized. Under the terms of the agreement, even when the TS1000 became available in the States, Sinclair Research was still permitted to sell the ZX81 as a mail-order item until Timex sales reached an undisclosed volume.

Although the outward appearance of the ZX81 was modified for the US market, the TS1000 made precious few concessions to the demands of a transatlantic crossing. Nevertheless, in the five months following the launch, Timex sold more than 550,000 units into an enthusiastic market, earning in excess of $1.2m. in royalties for its British partners. It looked as if a solution had been found to the $14m. trading loss projected for Timex in 1982. Then the bubble burst. Timex's inexperience in the consumer-electronics market - let alone the home-computer market - took its toll. We'll let the Wall Street Journal (17 August 1983) take up the story:

Although (Timex] quickly sold thousands of computers in the heady days last fall [autumn 1982], early Timex Sinclair buyers faced an immediate disappointment. Almost all the programs written for the Timex computer required a $50 memory unit. But Timex didn't supply that unit in great numbers until two or three months after it introduced the computer. Many new owners would take the computer home without software, plug it in and find it didn't do anything useful. 'It was a disaster,' says the computer buyer at a large discount store chain... The model 1000 is also irritating to use. if it is jiggled when the memory unit is attached, the television screen hooked up to it sometimes goes blank. The keyboard, drawn on a piece of hard plastic, doesn't have separate keys. The computer also can't produce color graphics or sound and isn't much good for playing games. Consumers who wanted to learn about computers were willing to ignore such shortcomings when the unit was the only one selling for less than $100, but now sales have plummeted.

A partial explanation for the short-lived success of the Timex campaign centres on the conflicting demands of the embryonic home-computer markets in the US and UK. When assessing the character of this particular commercial conjuncture, it is important to remember that prior to the Spectrum's launch the only real application for a Sinclair micro was as a learning tool for would-be BASIC or ZX80 (machine-code) programmers. In the halcyon days when an inexperienced Sinclair confided to the American press that he'd rather be 'a pirate than a captain of industry', he was also tempted to pontificate on the failure of any single American company to dominate the fledgling US micro market:

Our competitors thought that consumers didn't want to learn programming. We (Sinclair Research] think they failed because of this and because of price.

(Informatics, 29 June 1981.)

American market response to the TS1000 revealed that the competition was perfectly correct in its pessimistic assessment of the general public's interest in computer programming. Certainly there was a market for a learning machine among electronics hobbyists and students of computer science. This group would account for a substantial proportion of the 150,000 mail-order sales fulfilled by Sinclair Research prior to its licensing agreement with Timex. There was also an interest in programming among a minority of the affluent middle classes who, possibly intrigued by the technology littering their offices, considered the cost of a TS1000 a small price to pay to satisfy their curiosity. This group almost certainly made a healthy contribution to the 550,000 sales in six months that convinced Timex it was on to a winner.

Unfortunately, while the TS 1000 was satisfying the demands of a studious minority, the competition was defining the role of the micro in the lives of the American people. According to the gospel of companies like Apple, Atari, Commodore and Texas Instruments, home computers were about either business (including wordprocessmg) or arcade games. Programming was the province of egg-head hobbyists or the professional. Why would any layman want to grapple with computer languages like BASIC when any game or application program could be had for the asking?

Although the US approach to microcomputer application eventually came to dominate the UK market, at the time the TS1000 began to flounder a significant proportion of Spectrum owners in Britain regarded their investment as an entrée into the mysteries of programming. As a graphic illustration of this conflict in consumer demand, it is necessary only to examine the sluggish attempts by mass-market publishers to stumble aboard the microcomputing bandwagon. In the States, the only mass-market books that made money were those that simplified hard- or software manuals or offered listings of arcade games. By contrast, publishers in the U K supplemented revenue from listings books with high-level programming tutors, introductions to machine code and alternative user guides that demolished the limitations of design.

As far as Sinclair Research was concerned, Timex's launch of the TS1000 had generated a significant return which surpassed its most optimistic projections. Given that the company had enough on its plate satisfying UK demand for the Spectrum, there was little incentive to embark on a comprehensive survey of market trends in the States.

There can be little doubt that the early success of the TS1000 was largely attributable to the low price of the product coupled with the initial novelty value of a home computer as a consumer-electronics artifact. Within twelve months, the concerted promotions of home-based companies clarified the consumer's image and expectations of a computer, and in the process transformed Timex's commercial salvation into a dubious gimmick. Sales of the TS1000 took an irreparable nosedive when companies such as Commodore and Texas Instruments slashed the prices of their down-market machines to below the $100 mark. Unlike the TS1000, the decidedly limited TI/99A (Texas Instruments) and the VIC 20 (Commodore) boasted standard keyboards and generally gave the impression of being 'real' computers. Under pressure from the veterans of the US computer market the inexperienced Timex didn't stand a chance. The company dropped the price of the TS1000 to around $40, but no one seemed to notice.

Implicitly conceding defeat on the American retail market, Timex made a brave attempt to minimize the effects of its home-computer failure by signing a deal with a malor US bank that wanted to give away TS1000s to new customers. The contract disposed of a couple of thousand machines, but did nothing to fade the writing on the wall. By August 1983, Timex-Sinclair finally got around to responding to complaints that the TS1000 had too little memory (RAM) to be of any practical use. The TS1500 was essentially an Americanized ZX81 with a built-in 16K RAM pack. Its launch did little to overcome the growing conviction that Sinclair products were intrinsically unsuited to the demands of the US home-computer market.

The TS1500 was a belated and decidedly flabby response to Timex's rapid fall from grace. This definitively interim product was intended as a stop-gap between the TS1000 and the American version of the Spectrum (TS2000), but it was hardly worth the effort. By the time Timex got around to shipping the TS1500 in August 1983, Sinclair was promoting the Spectrum to a largely indifferent America. According to the Wall Street Journal (17 August 1983), even Nigel Searle, who was looking after the US side of the company's business, had misgivings about the applicability of the TS2000 for the US market:

The Timex Sinclair 2000, an adaptation of Sinclair's ZX Spectrum computer, faces tough competition from the Commodore 64. Both sell for $200, but the Commodore unit has a superior keyboard and much more available software. Even Nigel Searle, Sinclair's managing director, doubts the appeal of the model 2000. 'By the standards of six or nine months ago the 2000 would offer a hell of a lot,' he says. 'But now I don't know what the consumer's preference will be.'

According to the Wall Street Journal, it was unsaleable stocks of the TS1000 that scuppered the Spectrum's chances in the States. By the time the TS2000 made an appearance, retailers in the US had come to regard the TS1000 as a white elephant. No one wanted to know about its successors. The chainstores dropped the TS line, and Timex found itself out of its depth without the comfort of a distributive float. in the same month the TS2000 was offered to the American people, a senior vice-president at Timex inspired his sales force by proclaiming that, 'I don't think Timex can make it in computers.'

Smothered by competition from slicker home-based machines with fortunes to promote them and substantial software bases to support them, the TS2000 disappeared without a trace. The last recorded sighting of a TS1000 was a $10 gizmo at a supermarket checkout. Production of the TS line was discontinued in the summer of 1983, and Timex formally announced its withdrawal from the microcomputer market in February 1984. Vice-president C. M. Jacobi was landed with the thankless task of composing the meaningless newspeak that purported to justify Timex's acknowledgement of defeat:

We believe that instability in the market will cause the value of inventories to decline, making it difficult to make a reasonable profit. Further, we are concerned that those conditions will strain trade relations between manufacturers and retailers, a relationship which the company values very highly.

(New York Times, 22 February 1984.)