The Rise and Fall of the Timex Computer Corporation, Part 1: What Happened?

I don’t know exactly what came to your mind when you heard the news, but as for myself, I experienced the five classic reactions to a death. First denial, then anger, and so on. It crept suddenly up on us all like a trap catches a mouse. We should have seen it coming. We should have only known. Quick phone calls to others only confirmed that I was joined by many others who were just as surprised.

Several large Timex retail vendors mysteriously vanished into thin air overnite and were never heard from again. The ball kept on rolling. By the end of the month only a handful of the previous vast majority of third party companies planned to stay on; the others only hoping to eliminate their large inventories. All of the major gloss magazines finally split for good. Watching the TS 2068 personal computer sell for under $100 was also a little hard to swallow.

Perhaps the entire situation would have been foreseen by someone with sharp intuition and a feel for high flying finances in the electronics trade. Some of the details that finally came out of the disbanding of Timex Computer Corporation were quite possibly hinted at earlier, from time to time. But we were unaware of what was going on.

The story goes back to some years ago when Timex Corporation was manufacturing Sinclair computers to their specifications for the European market, in a Timex owned factory in Scotland. Out of this partnership, most certainly brought the ZX81 to the American retailers in the form of the TS 1000. Sinclair Research of England, founded by Clive Sinclair, was responsible for the engineering and design of the computer, and Timex made and distributed it. The original ZX however, had been available in the United States for some months previously. It was sold by mail in a kit package.

The TS 1000 with its black and white video display, flat membrane keyboard and 2K RAM, was the first computer in the U.S. to sell for under $100. It was to be found in almost every discount house and drugstore, or as one might say, wherever a Timex watch would be sold. Support and user groups were quickly formed and the modest little computer eventually became a hit. Within two years, over a million were sold.

Meanwhile, something was happening in the marketplace. Amidst a mirad of Apple, Atari and Commodore computers, Texas Instruments announced that they were dropping their personal computer line (i.e. the TI 99 4/A). It was 1983, and a wild orgy of price reductions throughout the home computer industry was responsible. Originally sold for $750, the TI 994/A was finally discounted and cleared for a mere $50. Many analysts had predicted that there would be a personal computer in every home by 1984. As the time approached, it was evident that this speculation would not come true, at least for the time being.

Several other companies saw heavy price reductions and as a result there were large profit losses. Not only were there price changes, but also a shift in consumer interest. It appeared that the more affordable or beginner models were losing ground to the more sophisticated and feature-packed computers. The once popular video cartridge game machines were slowly fading away, while games were still thriving and being played on home computers that provided high resolution graphics and up to 48K memory.

Since profit is the name of the game in any commercial venture, watching the TS 1000 sell for less than $50 by Christmas of 1983, left some large questions to be answered. Where would it all end? One thing was certain. The little TS 1000 had begun to loose its popularity and was on its way out. There were however, those who would refuse to support anything but their Timex computer, and would not agree to the criticism that it was simply a toy.

Timex Computer Corporation had made some what of a success with the TS 1000, but had been hinting for some time about a new line of computers with more advanced features. Other companies were busy upgrading their lines and developing some sophisticated models. Even Sinclair Research back in England had released a color computer called the Spectrum, which was available with increased RAM capacity. Just as the TS 1000 was an offspring of the ZX 81, the Timex 2068 was based on the Sinclair Spectrum.

Originally entitled the 2000 series, and was planned as two separate models (the 2048 and 2072), Timex released only a single model, the 2068. It was produced and distributed several months before the original projected date, in order for Timex to relieve some of the pressure they were receiving from dealers and consumers who demanded something new. Production of the TS 1000 finally ceased for good, and all attention was given to the 2068. It was a physically larger model high resolution color graphics, sound capabilities, 48K RAM, and a real keyboard.

For unknown reasons, another computer model was also briefly marketed. The TS 1500, which was to some degree, an updated TS 1000. It had onboard 16K RAM, and a pushbutton keyboard for the retail price of $80. One can only conclude that the TS 1500 was produced as either a beginners model or to fill the gap for users who still utilized the black and white software.

So with the new TS 2068 and all of the planned add-ons and extras, it appeared that Timex Corp. was back on the right track again. From time to time, there would be some criticism as to the manner in which a Timex customer would sometimes be left out in the cold after the purchase. It was said that Timex was simply out to sell computers in the same manner as their watches and to make a quick profit. If a customer needed some further help or assistance, there was little that could be obtained. There was the toll-free telephone number, but getting adequate information from it was quite difficult, if not impossible. The so called third-party vendors of after-market Timex products also spoke of the frustrating “closed-door” policy they received from Timex. However, with the release of the TS 2068, it appeared that this situation was slowly improving and mending.

It was management that had been blamed for the heavy emphasis on marketing rather than customer follow up and support. This was for the most part speculation, but when word came that Dan Ross, director of the computer division at Timex, had been relieved of his duties, it was evident that there was a sincere effort in progress to clean the slate.

Then on February 22, 1984, Timex Computer Corp. announced that it was calling it quits. C.M. Jacobi vice-president of marketing and sales gave the official statement. “We believe instability in the (home computer) 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 Timex values very highly. These factors, coupled with strong demand in our other product lines, have indicated that Timex can now better utilize its resources in those areas.” Jacobi also stated that, “consequently Timex has decided to withdraw from the retail portion of the home computer business. Consumer warranties will be honored and out-of-warranty service will continue. The company will continue as a manufacturer and parts supplier to several large companies in the computer industry.” Another spokesperson for Timex added, “while we believe that our 1500 and 2068 computer systems represent fine value for both the consumer and the retailer, our overall analysis of the business led us to the conclusion that 1984 would be another year of turmoil in the market-place…… making it difficult to make a reasonable profit.”

Some of the more out-spoken Timex user groups were outraged over the decision, primarily because it was based on the assumption that there would be little profit made in 1984, Timex has perhaps always been a conservative company, and taking any sort of risk was always out of the question. Selling cheap but reliable watches for thirty years certainly doesn’t take a lot of nerve, when considering a wristwatch is a popular and necessary commodity. When the home computer market appeared to be a blossoming business venture a few years ago, Timex jumped at the chance, but when the water became a little rough, they abandoned the ship. Most likely the decision to withdraw was a mistake, and somewhat premature. The records have now shown that 1984 became a stabilizing year for the computer industry. Instead of price cuts, there were a few price raises on some models.

Consider that nearly 500,000 TS 2068 computers were sold before the announcement was made. Also, take into consideration the exciting peripherals that were to be released like the microdrive, and think of the 400 third-party companies that were thriving. Add the 200 or more Timex user groups in North America, and the numerous magazined devoted primarily to TS computers. If you were to add all of the positive prospects of the business, they certainly would outweigh the dismal forecasts of the analyists. It all leads to the fact that Timex Computer Corp. made a bad decision.

Sinclair Research is still moving full steam ahead with a new computer called the “Quantum Leap” It is somewhat ironic for Timex to quit, when the company that was instrumental in designing the very computers that they sold, are doing very well. They make up about 48% of the computer market in England. Sinclair decided not to take over marketing the Timex computers here in the U.S., but would continue to release their new products here instead.

It appeared that the marketing rights for the TS computer line were up for negotiation. As of this writing, no significant deal has been struck. As much time has passed since Timex made the announcement, the possibility of such a deal is not very likely to happen. Rumors will continue to abound. There was even one story circulating, that a small corporation was buying the TS computer rights, and were going to market them all over the U.S. in small franchise-type computer stores, complete with thousands of software titles and lots of add-ons. We won’t hold our breath.

One interesting and final note about the fall of Timex Computer Corp. is that to my knowledge, not one person has given up using their TS computer, or placed it on some dusty closet shelf. Let this be a ghostly reminder to those corporate decision makers who pulled the plug. The hard-core TS 1000 users still very fondly type in their machine codes and modify or “hot-rod” them. TS 1500 owners proudly continue to program their little computers. TS 2068 owners are still very much enthused about their sophisticated machines, knowing that they have one of the best that money can buy. Though the company has died, their computers live on. No one has stopped because of the Timex decision. There may even be a stronger banding together of the users now that the storm has passed.