How Sugar spiced up the PC market
David Crookes talks to Amstrad’s former boss Lord Sugar and group technology consultant Roland Perry about the immense impact the low-cost PC1512 had on the computer industry 35 years ago
David Crookes speaks to Amstrad’s former boss Lord Sugar and group technology consultant Roland Perry about the huge impact the PC1512 had on the industry.
For an intense period in the mid-1980s, Amstrad was on fire. It had already built a reputation as a budget British manufacturer of low-priced, all-in-one hi-fi systems festooned with buttons and sliders. Now Alan Sugar’s company was making a huge noise in the computing industry, and competitors were looking over their shoulders.
Amstrad entered the computer market in 1984 with the 8-bit CPC 464. It was a 64K machine with a built-in cassette drive that came with its own monitor – an early all-in-one, if you will, powered via a single plug. The following year, it released two diskbased CPCs (the 664 and 6128) and launched the PCW range, primarily dedicated to word processing and bundled with a printer.
Yet the computer that arguably made the biggest impact was the PC1512 – a clone of another company’s machine. Released 35 years ago and code-named AIRO (Amstrad’s IBM
Rip Off), it proved revolutionary.
“We picked the right time and we kickstarted the market,” Lord Sugar told PC Pro, recalling how this PC became the catalyst for Amstrad seizing an eventual 25% share of the European computer market.
By the time the PC1512 was unveiled at the Queen
Elizabeth II Conference Centre in London, Amstrad had snapped up Sinclair and the ZX Spectrum brand. Aside from Acorn and BBC with the Micro, Amstrad was now the biggest British name in this burgeoning industry.
The PCW, however, showed Amstrad there was even more profit to be had in the commercial market. The debut PCW 8256 was appearing on hundreds of thousands of office desks, bought by managers attracted to its price of £399 exc VAT. Indeed, with eight million sales, the range would cement its place as the bestselling British computer until the Raspberry Pi beat it in February 2016.
Price was an important selling point for Amstrad and it could see the IBM PC, launched in 1981, was going toe-to-toe with Apple at a huge cost to the buyer. “The IBM PC was priced at around £2,000 for the main system unit alone,” Lord Sugar said (the Macintosh 128K roughly matched it).
“So we reduced the price of buying a PC to about £399 and exploded the market, making the product available to everybody. The success of the PC1512 was purely down to being inexpensive but it also came at the right time and right place, when there was still a boom to happen in the
computer market.”
Cutting costs
The high price of IBM and Apple computers meant neither had enjoyed a particularly high take-up in Europe, yet they were fast being seen a necessity for business – and they were already big in the US. As such, the market for less expensive, compatible PC clones was growing, aided by IBM’s decision to use standard components throughout the design – except the BIOS. It allowed companies such as Amstrad to replicate everything but the custom chip.
The trick was to produce a compatible BIOS without actually copying it directly and falling foul of IBM’s lawyers. Any team given this task couldn’t even legally take a peek at how IBM’s BIOS worked. They had to be told what it did and figure the processes involved themselves, which is why Amstrad handed the job to MEJ Electronics, run by Mark-Eric Jones in Dorking, Surrey.
“The ‘clean room’ scheme for producing a workalike for the IBM BIOS was fairly well understood,” said Roland Perry, who was then Amstrad’s group technology consultant. “Companies such as Phoenix Technologies did it for resale to a multitude of hardware manufacturers so there
was no reason why MEJ couldn’t do it for just one customer.”
Like Phoenix, MEJ engineers read the BIOS source listings in the IBM PC
Technical Reference Manual. They then wrote a list of technical specifications and handed them to someone who had never caught sight of the IBM BIOS to mimic its APIs. Since the programmers working on the code had never seen either the BIOS or the manual, they couldn’t be accused of infringing intellectual property. “It was just like everyone else was doing, mainly making sure the engineers involved had ne ver seen the IBM object code,” Perry said.
While that was taking place, Amstrad found another trick up its sleeve – a little bit of magic that ensured its debut PC could undercut the competition. Lord Sugar and Bob Watkins, Amstrad’s technical and manufacturing director, had opened up an IBM PC and they saw it was packed with lots of small chips.
“Computers were not rocket science,” recalled Lord Sugar. “When you opened the box of an IBM PC, it was just a bunch of chips, resistors and printed circuit boards.”
Experience of the
CPC and PCW told them both that using three custom gate-array chips would be more cost-effective.
“It was all about the number of chips,” affirmed Perry. “Just as the PCW had fewer chips than a standalone 8-bit printer, the PC1512 had fewer overall chips inside it than the graphics card alone in an IBM PC.”
Speccing up
Although cost-cutting was the name of the game, Amstrad nevertheless wanted its machine to go toe-to-toe with higher-priced rivals. An early decision was to use an 8MHz Intel 8086 16-bit processor. “The standard at the time was a 4.7MHz 8086 so we were already ahead of the game,” Perry said.
The computer also had the bulk of what was needed on the main PCB, meaning there was no need for expansion cards. This fitted Amstrad’s ethos of providing machines that were simple to set up and use.
“The thinking was to provide a product that did what most of the customers wanted, out of the box, without needing to buy extras,” said Perry.
To cater for different needs, however, customers could choose between either a paper-white monochrome or colour monitor compatible with the CGA standard, which allowed up to 16 colours to be displayed. The base model came with a single 5.25in floppy drive, although it was possible to install either a 10MB or 20MB hard drive; these versions, despite espite costing up to £919, accounted for 45% of sales, leaving Amstrad struggling to keep up with hard drive supplies.
“IBM software was provided on 5.25in [floppy] disks, which is why we opted for those rather than the 3in disks of the CPC and PCW,” said Perry. The PC1512 also had 512KB of RAM expandable to 640KB for an extra £52, and customers had a choice of operating system too. They could use DR-DOS or MS-DOS – a situation ituation that, in keeping with the rest est of the machine, was due to the desire to keep costs low.
Lord Sugar, it emerged, had baulked aulked at the high royalties being demanded emanded by Microsoft for the use of its s operating system, prompting Amstrad mstrad to turn instead to Digital Research esearch – which was more than willing illing to ship DR-DOS at a far lower cost ost in a deal that also included a customised ustomised version of the desktop environment, nvironment, GEM.
“We had an existing relationship with ith Digital Research because it had provided rovided CP/M on the CPC and PCW series,” Perry said. “Whatever the opinion of the market at the time, DR-DOS was technically superior because it had a certain amount of multitasking and, at a lower level, I think it preserved more registers when doing system calls.”
“It was just like everyone else was doing, mainly making sure the engineers involved had never seen the IBM object code”
Concerned, Microsoft sent a delegate to Amstrad’s offices in Brentwood and, after insisting on $4 per unit, eventually backed down and agreed to provide a million licences for much less. Although DR-DOS and MS-DOS were essentially the same, customers generally opted for Microsoft’s OS. This worked as much in Amstrad’s favour as it did Microsoft’s since since, again, it gave customers what they wanted and made them fee feel they weren’t getting less bang fo for their buck. And yet things didn’ didn’t always run smoothly.
Squeaky bum time
Vitus Luk, who worked in Amstrad’s Hong Kong office, was commissioned to create a mouse that was cheaper than the $25 Microsoft Mouse made by Alps Electric. He succeeded, but it was incompatible with serial mice and caused problems with MS-DOS.
Perry says it wasn’t a major issue. “If people wanted to ignore or discard the Amstrad mouse with its proprietary connector, they could plug a serial one in instead,” he told
PC Pro. Lord Sugar, however, says the mouse should have at least used an industry-standard connector. More painful, though, was the fuss made over a lack of a fan inside the base unit, made worse by the fact that it didn’t actually need one.
Amstrad had placed the power supply inside the monitor so there was no question of the computer overheating (it wasn’t possible to swap the monitor for another either, but that’s another issue – at least it had a rare volume control knob). “The PC1512 didn’t need forced cooling of the base unit because it didn’t have the PSU inside, nor were there any power-hungry electronics,” explained Perry.
“We didn’t need forced cooling of the monitor either because it was adequately cooled by convection like every CRT anyone has ever bought.” Even so, rumours of overheating were rife, started by sales staff at IBM. In response, Lord Sugar – fed up of defending the decision – included a fan. (“If they want a fan, I’ll give them a bloody fan,” he told the Financial Times at the time.)
Although the problem meant fewer PC1512s ended up in offices than Amstrad had hoped, it didn’t affect home sales. Neither did it prevent Amstrad from becoming a major force in the IBM PC clone market.
Perry believes the PC market would have flourished regardless – “a bit later, and without people wasting lots of money buying machines that turned out to be a dead end,” he said.
But Lord Sugar believes there’s no way of knowing whether the PC market would have become as big as it is today without Amstrad’s input.
“As well as taking more than a quarter of the European market, we showed you could produce computers at much lower prices in mass production than the traditional IBMs and Compaqs at the time,” he told
PC Pro. “Those were really technical companies that didn’t really know about mass production and consumer products, so we managed to cash in by applying consumer product manufacturing techniques to so-called high-end technical products.”
“We managed to cash in by applying consumer product manufacturing techniques to so-called high-end technical products”
The PC1512 was followed by the PC1640, which had 640KB of memory and the EGA graphics standard. There were also affordable portable Amstrad PCs, as well as the PC 2000 series created to compete against IBM’s new PS/2 architecture.
The latter range ran into problems with faulty hard drives provided by Seagate and Western Digital (“Seagate paid us $130 million but it was too late because we lost the market with the 2000 series,” Lord Sugar said). Indeed, former Amstrad PR front man Nick Hewer reckons Amstrad would be competing with Apple today had that not happened. Still, the series still ran from 3000 to 9000 and 1993’s Mega PC even had a cartridge slot so users could play Sega Mega Drive games.
Without the success of the original Amstrad PC, however, the company would unlikely have become so dominant. “We weren’t expecting to sell most of the PC1512s to people who already knew what an IBM PC was supposed to do,” said Perry. “So we introduced many people to PCs and told them via a comprehensive manual ‘this is what this computer thing you have should do for you’. That was invaluable too, in many ways.”