As the Wall Street Journal put it in a February 23 headline, “Timex, Anticipating Market Upheavals, Discontinues Sale of Home Computers”. While market trends may have been an important factor in Timex’s decision, the report missed some other considerations that may have been more immediate reasons for Timex’s withdrawal. The Journal report calls Timex “a victim of the price war it helped launch.”
Some of us forget that Timex is (was) not just a computer company. The watch and clock business is the mainstay of Timex and the company has had great difficulty in recent years in that area due to fierce foreign competition.
Timex began making inexpensive and durable watches in the 1950’s. The company soon became the world’s largest watch maker and by the late 1960’s, Timex had more than 50% of the U.S. watch market, and 20 of the world market, with the remainder being supplied by smaller American companies and Swiss and other European companies. This made Timex a target for foreign competition.
In the late 1970’s, the Japanese became a powerful, eventually, dominant force in the watch business and introduced a flood of cheaper watches in the U.S. and around the world. With cheaper labor and electronic technology, Japanese watch makers easily undercut Timex and its bulky, mechanical watch technology.
Recently though, Hong Kong watch makers have entered the market with even lower labor costs than Japan and have forced many Japanese companies out of business. The situation has led to a major glut of watches of all price ranges. In 1983, Hong Kong alone produced nearly 300 million watches, which estimated to equal the entire annual world demand.
Timex has had to make major adjustments to survive corporately. All of its watch-making has been moved to Asian plants. Thousands of American workers have been terminated. Timex recently sold its gyroscope business to Bendix Corporation for $15 million. January, 1984, it sold its headquarters building in Middlebury, Ct, then leased back a portion of it. Some industry analysts have predicted that the company has little chance for survival.
Timex began assembling Sinclair computers in 1980. In an effort to diversify, they made an agreement with Sinclair to market the Timex-Sinclair line of computer in North America. Timex had also been developing a line of health care products (Health Chex) – digital blood pressure and pulse gauges, thermometers, and bathroom scales. In this area, it is said they have been somewhat successful.
Timex introduced the TS 1000 in September 1982 and sold more than a half million at about $99.95 each in the fourth quarter. In 1983, they sold 1.2 million computers for the whole year (which includes the TS 1500 and TS 2068, but mostly the TS 1000) but the price for the TS 1000 had dropped as low as $29.95, due to strong competition from Texas Instruments, Commodore, and Radio Shack who lowered prices on their home computers.
To aggravate the situation, Timex was notoriously slow at introducing new products. Even the TS 2068, which has recently been receiving excellent reviews, was not widely available to computer shoppers by Christmas 1983, although it was supposed to be on sale by mid 1983. Timex had difficulty in recruiting mass merchandisers to market the new computer.
In 1983, Timex lost 100 million dollars, with revenues of $400 million. A Business Week article (February 20, from which many of the above figures were taken) states that “The company’s strategy is to rebuild its watch market and make itself less-vulnerable by broadening its base with home health care products and home computers.” However, it appears that Mike Jacobi, the new Vice-President of Marketing at Timex, was mostly concerned about the watchmaking business. Referring to the company’s watches, Businessweek quotes him, “We were thick, fat, ugly, over priced, and behind in technology.” Upon taking charge at Timex, he immediately combined the three sales divisions – timepieces, computers, and health products into one – and Dan Ross, former Vice-President of Operations for Timex Computer Corporation, resigned.
On February 21, Jacobi announced Timex was out of the computer business. His analysis was that the home computer “industry is on a kamikaze path,” to market upheavals and price wars, and his prognosis of the market for 1984 is poor. (He seems to follow Wall Street’s “consensus” that IBM will be the only computer company by 1990). He also stressed that the “prized relationship” between Timex and its retailers had to be protected from instability.
Timex did decide not to abandon its fledgling home health care products, however, presumably because there is less competition in that field, and due to its established network of drug and discount store outlets, which would provide an excellent market for such products.
Sinclair’s decision not to market its new 32-bit business-oriented computer, the QL, through Timex, was taken as a reflection on Timex’s poor performance with other Sinclair related products. Perhaps, Sinclair had gotten wind of Timex’s decision to drop computers, even before the announcement.
Jacobi has promised that Timex will honor all service under warranty and provide after-warranty service. The Timex hot line (1-800-24-TIMEX) will be maintained as long as they receive sufficient calls to justify keeping it up. Jacobi has said that Timex will reduce its prices (possibly to under $100 for the TS 2068) they won’t just dump the inventory at “fire-sale” prices.
Although comparisons of Timex with Texas Instruments are inevitable, I don’t believe Timex users should despair that there will be a drying up of software and peripherals for the TS 1000 or the 2068.
Don’t forget that Sinclair was around in England long before (relatively) anyone heard of the TS 1000. Sinclair is still actively marketing the ZX-81 and Spectrum computers around the world. With the withdrawal of Timex, there is nothing to stop Sinclair from marketing computers in the U.S. There is also a vast third-party industry of software and peripherals makers for Timex and Sinclair computers. Perhaps the worst effect is that the future of the TS 2068 is uncertain. While the 2068 is a definite improvement over the Sinclair Spectrum, Sinclair may not be able to or may not have the desire to obtain the rights to the 2068 from Timex.
The TI 99-4A was a computer with a lot of inherent limitations, very little third-party support, not much software, and a very low performance-to-price-ratio. Yet there are still rumors that companies are negotiating for the rights to the 99-4A, and Atari and others are making software for the computer. With all the advantages of the TS 2068, a new company may seek rights to Timex/Sinclair Technology. The final analysis, what have we lost-if Sinclair or another company actively market ZX-81 and Spectrum-type computers and peripherals in the U.S.
- The Timex hot line.
- Timex Ramblings newsletter (no great loss from what I’ve seen).
- The apparently ineffective marketing and long development times of the people at Timex.
- And perhaps most substantially, Timex and Sinclair users in America, as a whole, stand to lose some amount of respect from other computer users.
I’ve already had friends who have said to me, “see, I told you Timex would never make it,” and “You ought to change the name of your magazine to TRS-80 Horizons.” Same people can only respect big names like IBM, Apple, and Radio Shack.
As far as I’m concerned, that’s not much of a loss.