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April 26, 1987

ATARI’s JACK TRAMIEL JUSTIFIES HIS BORING OLD – ROCK-BOTTOM – PERSONALIKE

By CBR Staff Writer

We know the ST is a more advanced product and I am not proud of our PC, but we are here to make money said Atari Corp chairman Jack Tramiel at Friday’s London launch of the company’s personal computers. The announcement of the Atari PCs was accompanied by details of new STs, Mega STs, the 65XE games console and a cheap 300 dots per inch, eight page per minute laser printer that will be part of an ST-based desk-top publishing system. This wide range of machines, covering from the games market up to the serious small business user, is necessary, according to Tramiel, as we need to cover all the business. The PCs will start shipping in the UK in June with volume available in Autumn. With prices set low enough to undercut even Amstrad, UK managing director Bob Gleadow is predicting that the 35,000 units he has ordered from Atari’s Taiwanese manufacturing plant – our manufacturing costs are comparable with IBM’s – for this calendar year will sell out. He has signed up ten distributors including Creative Sparks Distribution and Lightning and along with the rest of Atari’s operations will run a dealer recruitment campaign over the summer to supplement the already existing outlets. The dealers will be offered margins of around 30% – more than double the 12.5% available from Amstrad. Atari will clearly sell some of the Personalikes, but it is unlikely to win much business away from Amstrad, which already has the name in the budget market, and is a household name with a host of small business and corporate buyers who’ve never even heard of Atari. Gleadow says the UK will in total do between UKP30m and UKP50m this year with a small profit. Tramiel says before Gleadow joined six months ago Atari UK was, unlike the rest of Europe, suffering heavy losses. The UK, says the chairman, is important to Atari as it has been responsible for much of the software for the ST range. Germany is going especially well but the US is the weakest point. To put that right, Tramiel says Atari will be spending tens of millions of its $200m in cash – the company recently raised $75m with an issue convertible subordinated debentures in Europe (CI No 660) – on promotion. The PCs are merely the first step in Atari’s pledge to follow both the Intel and Motorola chip families. An 80286 AT-alike and a 68020 ST which has MS-DOS emulation are scheduled for November launches with shipping in early 1988. By 1990, Tramiel hopes that sales to business users will account for 40% rather than the current 10% of Atari’s revenue. As is to be expected, Tramiel would not be drawn on the latest – apparently self-inflicted – crisis at Commodore (CI No 668), the firm he founded in 1954.

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