Commodore is the commonly used name for Commodore International, an electronics company who was a major player in the 1980s and 1990s home computer field. The company formally went bankrupt in 1994, but there have since been several attempts to revive their Amiga systems.
The company that would become Commodore International was started in Toronto by Jack Tramiel in 1954. He had a small business fixing typewriters for a few years while living in New York, but managed to sign a deal with a Czechoslovakian company to manufacture their designs in Canada. By the late 1950s a wave of Japanese machines forced most companies out of business, but Tramiel instead turned to adding machines.
In 1962 the company was formally incorporated as Commodore Business Machines, and in the late 1960s history repeated itself again when the Japanese firms started producing adding machines. The company's main investor and chairman, Irving Gould, suggested that Tramiel travel to Japan to understand how they could compete. Instead he returned with a new idea, to produce electronic calculators, which were just coming on the market.
Commodore soon had a profitable calculator line, and were one of the more common brands in the early 1970s. However in 1975 Texas Instruments, Commodore's main supplier of parts, decided to enter the market directly and put out a line of machines that cost less than the parts. Commodore had to be rescued once again by and infusion of cash from Gould, which Tramiel used to purchase several second-source chip suppliers, including MOS Technologies, in order to guarantee supply. He agreed to buy MOS, who were having troubles of their own, only on the condition that Chuck Peddle join Commodore directly as head of engineering.
Once at Commodore, Peddle convinced Tramiel that calculators were already a dead-end, and that they should turn their attention to home computers. Peddle packaged his existing KIM-1 design in a new case, along with a keyboard and monitor (driven by a new display chip) to produce the PET line. From that date forward, Commodore would be a computer company.
The PET line was used primarily in schools, due to its tough all-metal construction, and didn't compete well in the home setting where graphics and sound were important. They addressed this with the introduction of the VIC-20[?], which was at a perfect price point and sold millions. Looking to take over the higher-end portion of the market as well, they introduced the Commodore 64 (C64) in 1982, which at first was quite expensive.
Once again Texas Instruments decided to take over a market, and introduced their TI-99/4[?] that year. But this time Tramiel decided to fight rather than switch, and cut the price of the C64 dramatically. TI responded, and soon there was an all-out price war involving Commodore, TI, Atari and practically everyone other than Apple Computer. By the end of the process Commodore had shipped somewhere around 22 million C64's, and in the process killed the TI-99, destroyed Atari, bankrupted most smaller companies, and wiped out their own savings.
The board was as trapped as anyone else by the price spiral, but eventually decided they wanted out. A power stuggle started inside the company, and in January 1984, Tramiel quit. A few months later he bought Atari from Warner Communications for almost nothing.
Now it was up to the remaining Commodore management to salvage something of their company. They did so by buying a promising new computer design known as the Amiga from a group of ex-Atari designers. The new machine, dubbed the Amiga 1000, was brought to market in late 1985 (really early '86) for US$1500.
But Tramiel had beaten them to the punch. Throwing together a number of off-the-shelf parts, he had already released the Atari ST earlier in 1985, for about $800. Tramiel also claimed that Jay Miner did the chip design for the Amiga computer while still under contract with Atari. This led to the ferocious Atari/Amiga war, and was ended only when 1987 saw the release of the Amiga 500 which took over the market from the ST.
The computer market was however rapidly latching onto the IBM PC and Apple Macintosh worlds, with everyone else pushed off to the side. Commodore suddenly found themselves actually having to market the machine, and discovered they were largely unable to figure out how to do that. (One common joke was "If CBM got the contract to advertise KFC, they'd call it 'Warm Dead Bird'".) They also failed to expand the technological edge they had, instead trying to bring technologies to market that would not see demand for another couple of years—like digital TV (CDTV) and a 32-bit CD-ROM based game console (CD32).
A massive divide existed between the engineers and the management, with the techinal staff resorting to get their work done behind the backs of management. For example, CPU samples from Motorola were delivered to the home addresses of the engineers and, for interest, Motorola gave them priority over Apple, who also used the same CPUs.
The engineers gave up trying to get their technology into production, and Commodore seemed content with selling the same old machine. Eventually, even the superior Amiga architecture was excelled by the relentless drive and sheer brute force of the IBM ecosystem.
Remarkably, Commodore was still selling Amigas based on the 68000 CPU well into the 1990s. The high-sales of these systems with very low-end CPUs may have discouraged software producers from selling more hardware-demanding titles, thus devaluing the Amiga platform as a whole.
When it became clear that the home computer market no longer existed, management appeared to change tactics completely, trying to remove as much value from the company before it finally disappeared. After a few years of selling the remaining inventory, Commodore declared bankrupcy in 1994.