From hero to zero: meteoric rise and fall of Tandy computers

Home computers should have been a short-term play, plugging a hole in Tandy Corps’ sales left by a passing tech craze. Instead, the company inadvertently kick-started a global revolution that affected every living person’s daily life.

It’s hard to imagine, but there were no personal computers in the mid ’70s. Most of the contemporaries were sold in an ‘assemble yourself’ state. The closest thing to a PC was the MITS Altair 8800: a machine with no video display, no keyboard, and virtually no practical use.

Computer hobbyists, however, took note, flooding dedicated magazines with articles on the device.

Meanwhile, John Roach, the vice president of manufacturing at Tandy Corporation, was looking for a new start. Tandy, the owner of numerous retail chains, including the infamous RadioShack, just went through a CB radio phase. Citizen band radios made a lot of money for RadioShack in the early ’70s, but the fad ran out of steam, and sales numbers turned red.

Altairs’ success with several thousand units shipped at $439 a pop caught Roach’s attention. However, RadioShack’s merchandising division was not fond of the idea. Even though customers were prone to the DIY modus operandi, assembling a working computer was not something everyone could do.

The MITS Altair 8800, often credited as the first PC. Image source.

Just as Roach was looking for a way out, one of Tandy’s soon-to-be engineers, Steve Leininger, noticed a similar trend. According to Boisy Pitre’s and Bill Loguidice’s book CoCo: The Colorful History of Tandy’s Underdog Computer, Leininger was moonlighting at a computer store. There he met numerous computer hobbyists having trouble assembling complex machines.

In a stroke of luck, Tandy’s west coast buyer who was pushing Roach to develop a fully assembled computer, Don French, invited Leininger to join Tandy. Only six months in the job, Leininger was working on a ready-to-go computer with a keyboard and a monitor.

A star is born

At the beginning of 1977, Roach’s team created a fully operational prototype of a home computer. The device was equipped with the Zilog 80 processor, 4 KB DRAM, 64-character per line video monitor, a full-stroke keyboard, and Level I BASIC language interpreter.

The computer was named TRS-80. TRS stands for Tandy RadioShack, and ‘80’ signifies the Zilog 80 CPU. Management agreed that the device’s starting price would be around $600 (around $2600 in 2021).

TRS-80 introduced in Tandy Computers catalog. Image source.

According to a 1987 article by tech journalist Ron White, Roach committed to making 3,000 TRS-80’s. The number roughly corresponded with the number of stores RadioShack operated in the US at the time. Leininger was scoffed at for suggesting making at least 50,000 units.

Tandy revealed the computer to the public on August 3 of 1977. A few months earlier of the same year, Commodore released its PET home computer, and Apple released the Apple II. The three machines came to be known as the ‘1977 trinity’.

TRS-80 sold at least twice as cheap as the Apple II machine and $200 less than the PET. With thousands of RadioShack stores around the country, TRS-80 became the most affordable and easiest to get. Just as Leininger predicted, Tandy sold 50,000 units in the first month after unveiling their computer. By the end of the year, Tandy held 60% of the PC market.

The good times

Though successful, the TRS-80 was not perfect, earning a crude nickname, ‘Trash-80’. Frequent software glitches, radio interference disrupting nearby electronics, lack of lowercase symbols, and other tight budget-induced problems did not allow Tandy to market their products for business clients.

To cut a larger slice of the PC market, Tandy released the TRS-80 Model II in 1979. The original TRS-80 was dubbed the TRS-80 Model I. By the end of the year, Tandy had sold over 200,000 computers, pushing revenues from the devices to $500 million. A way to compensate for losses over dwindling CB radios turned into 9% of the company’s income.

An ad promoting the CoCo line of Tandy's computer.

A few years that followed were a golden age for Tandy’s computer line. With six factories dedicated to TRS-80’s, which became synonymous with a microcomputer, the company sold hundreds of units every day. In 1980, Tandy released the TRS-80 Model III, an updated version of the original Model I.

“A newer version of the TRS–80 (popular models now cost $999) has become the largest-selling computer of all time, and Tandy now commands 40% of the small-computer market,” TIME magazine wrote at the time.

The same year Tandy released the TRS-80 Color Computer line dubbed CoCo. At this point, the TRS-80 name was used as a brand since the CoCo line was not compatible with software made for earlier TRS-80’s.

Overall, the TRS-80 Colour Computers were utterly different machines, ditching the Zilog 80 CPU for the Motorola 6809. The CoCo line was Tandy’s answer to growing competition by other market behemoths like Commodore and Atari.

CoCo’s ‘colorfulness’ was appealing to the massively successful Commodore VIC-20, whereas dedicated ports for joysticks and cartridge slots were meant to compete with Atari 400. CoCo 2 was released in 1983, followed by CoCo 3 in 1986.

An ad promoting the 'Pocket Computer' line of Tandy's computer, a 1982 RadioShack advertisement.

By mid ’80s, Tandy had released a fourth iteration of the original TRS-80, Model 100 and Model 100 laptops, and a series of ‘Pocket Computers’ marketed by non-other than the master of sci-fi Isaac Asimov himself. By 1984, computers accounted for 35% of Tandy sales, and the company had 500 Tandy RadioShack Computer Centers.

Lost lead

The end of Tandy computers began at the same time as it did for Commodore, Atari, and almost any other early PC manufacturer. It was when IBM joined the race for dominance. Whereas Commodore, Atari, Tandy, and others kept the supply chain of manufacturing firmly under their control, IBM relied on other vendors to complete parts of their computers.

In terms of hardware development, this move allowed for a faster catching-up to established players. From a software perspective, this allowed for an open architecture approach which meant that more and more software was built for IBM PC’s and, eventually, its clones. Naturally, users bought devices that could offer the most.

Managers at Tandy were not blind to the new market trends. In 1984, Tandy released the Tandy 1000, the first fully IBM PC compatible home computer system. The 1000 was born out of a previous failure when Tandy 2000, a semi-IBM PC compatible machine, was released to little interest from the public and tech enthusiasts.

A '80s Radio Shack ad for the newly released Tandy 1000.

Even though the Tandy 1000 was met positively and even allowed the company to keep almost 10% of the US home computer market share, the winds of change were too strong for a company whose main line of business was operating retail chains.

Slow demise

From 1984 till 1986, the global PC market stalled, in no small part due to the video game crash of 1983 and economic woes in the US. By 1987, Tandy’s share in the PC market dropped to 5%. Even though RadioShack was still selling the TRS-80 Model IV and CoCo line, it became clear that the 8-bit computers are a thing of the past.

In 1987, Tandy released the Tandy 4000. The device was meant to compete with IBM PCjr’s successor for billions of dollars in the education sector, and businesses were willing to spend on PCs, a concept born only a decade earlier. By 1991, Tandy’s share in the US home computer market shrank to 3.5%. Days when over half of all PC’s were churned by Tandy’s production lines were long gone.

Unlike virtually every other competitor, Tandy sold their computers almost exclusively via RadioShack stores. Meanwhile, Apple, IBM, Compaq, and other market leaders accepted orders via mail and sold their computers in superstores, something RadioShack got a hold of only in 1991.

A 1988 Radio Shack ad for Tandy 1000 line of computers.

However, it was clear that Tandy had lost. In May 1993, Tandy quite unexpectedly announced that the company was selling its factories related to PC manufacturing to AST Research, a high-end PC maker, later bought by Samsung, for $175 million.

“Tandy’s problems have been heightened in recent months by a price war that has delighted PC buyers but pushed many manufacturers toward insolvency,” wrote the Washington Post on the day of Tandy’s announcement.

The announcement surprised market researchers since Tandy Corp was open about plans to create a separate electronics business to supplement its PC wing. However, the deal made clear that PCs were a drag on Tandys’s key business – RadioShack stores. Almost immediately after the sale, RadioShack started selling PCs made by former competition.

By 2000, Tandy dropped its computer bearing and switched to RadioShack Corporation. A retail chain that was not unlike its computer line was eventually killed by an advance in technology. By 2015, RadioShack could not hold against pressures of ecommerce and went bust. Only franchises and hobbyist-supported locations remain.

The TRS-80, however, will forever remain among the essential machines that made people fall in love with computers. A romance that has been lasting for over four decades with no end in sight. To signify its mark on the PC history, one Model I is held in Smithsonian’s National Museum of American History.

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