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May 17, 1988

DIVERSIFIED GEARS FOR Z88 SALES IN US AFTER EMBARASSMENT OVER SINCLAIR NAME

By CBR Staff Writer

Diversified Foods, the $125m-a-year Portland, Maine grocery wholesaler newly turned computer distributor for Sir Clive Sinclair’s Z88 laptop, set up a marketing arm to handle sales of the machine 10 days ago under the name Sinclair Systems Inc and immediately had to rechristen the venture SSI Computer Systems when it found out – or rather was quickly reminded – that Amstrad’s rights to the Sinclair name extend to the US. According to the parent company’s recent 10-K filing with the US Securities & Exchange Commission, Diversified got a 75% interest in the US and Canadian distribution rights to the Z88 on March 16 and is required by the agreement to buy 13,000 units by September 30 1988, and another 10,000 units by September 30 1989 for a total commitment of approximately $3.5m. The agreement extends for three years with periodic sales reviews. The matchmaker in the whole deal was none other than Sir Clive’s old buddy Nolan Bushnell of Atari fame whose more recent venture, Axlon Inc, creator of battery-operated toys, has also climbed into bed with Diversified, investing the food company’s 51% Holding International Ventures with exclusive worldwide rights to distribute the Axlon creations for two years. The new SSI Computer Systems hopes to be moving the $549 Z88 through computer stores and major retail outlets offering a minimum 34% discount. To help it get off the ground, it has signed a letter of intent to acquire 51% of its first dealer, Executive Computers Inc, a four-year-old laptop specialist in New York that claims revenues of $5m a year selling to 800 of the Fortune 2000 companies. Executive Computers figures that the laptop business this year in the US will be worth $2,000m and to cash in further on the soaring market as well as to stimulate it, it is co-sponsoring a brand new trade show, to be called Laptop 88, which will run June 7 and 8 in New York and will be specifically focussed on the little widgets.

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