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Atari and its retailers (June 1983)


jhd

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Computronics magazine was mostly about TRS-80 computers, but it included a brief section about industry news more generally. The June 1983 issue includes some interesting news about Atari's relationship with its retailers:

 

 

*** ATARI HAS PROBLEMS CONTROLLING ITS DISTRIBUTORS ***

 

ATARI recently introduced a new computer, the 1200XL, intended to have an image that is less that of a game-playing computer and more of a workhorse computer. Apparently they have realized that the continuing slump of interest in video games could hurt them badly -- their Models 400 and 800 are very well designed for sound effects and extremely sophisticated game graphics, but very difficult to program and use for serious applications such as personal budgeting, word processing, and business applications.

 

So they introduced the 1200XL, which at least LOOKS like a much more serious computer. But some who have seen it say that it's mostly looks land looks don't count for much in this business. Consumers apparently find little added value in the new ATARI model. The problem is that the 1200XL is not cost-competitive with other similar computers on the market, and most of ATARI's own distributors agree -- the machine is overpriced.

 

ATARI's original suggested retail price for the 1200XL was $899. This is far above competitive computers like the COMMODORE 64 or the TI ARMADILLO (which has 80K of RAM). When the 1200XL first arrived on the dealers' shelves, discounting began immediately, to ATARI's dismay. It may be that they want to keep the price Jacked up so that the 1200XL will not compete with sales of remaining stocks of 400 and 800 computers.

 

ATARI has apparently requested that retailers not advertise the 1200XL for less than $749, because they "feel that $749 is a viable price for that computer."

But at that price, dealers are not very enthusiastic about selling the new computer. One dealer who sold almost $500,000 worth of ATARI computers last year ordered only 60 of the new 1200XL's, because of fears that it "wouldn't sell very well."

 

And now price wars have begun, with only a few dealers holding to prices above $700, and most are selling the 1200XL for between $600 and $700. There is at least one retailer selling the new machine for only $589.88.

 

The price of the 1200XL is not the only problem ATARI is having with its dealers. A new policy has been adopted regarding distribution of all ATARI computers, and distributors may no longer sell to dealers located outside of a specific geographic region -- the distributors can only sell within their own exclusive territory.

This is causing big problems for retailers who operate large chains of computer stores.

 

In many cases, the chains are widespread across many regional areas, and some are nationwide chains. These chain operators can no longer purchase ATARI computers from a single distributor, and they are not happy about it. One retailer said that to abide by the new regulations, he would have to buy from 15 different distributors, often at different prices. The result of all this is that many large computer store chains are seriously considering dropping the ATARI line altogether. There are so many other computer companies fighting for shelf space that many dealers will be content to stock their shelves with computers from ATARI's competitors.

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I think retailers were already seeing "the writing on the wall" as it relates to Atari's feeble marketing/distribution practices, even at that early moment in Atari-History. Vaporware, late deliveries, promises not kept. I too, as a store owner, would be skeptical of Atari and hold back. Commodore and Apple were pretty reliable about delivering what they promised.

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Maplin had left the Atari bandwagon here in the UK before the 1200XL was ever due to be shipped here (which never happened anyway), things in general were already not good with the computer mess Maplin had made and the market that they wanted to indulge in..

 

Maplin returned to Electronics only...Mind you, that article seems to relate to America in general and I don't think Atari UK had formulated any real idea's themselves.....Bit of a pooh fest all around to be honest...

 

Glad it was off my back...Maplin with the old Atari's was amazing, brilliant to sell, brilliant to use and it seemed there was a decent relationship with the UK dealers and Atari UK but as it went forward those of us responsible for shifting the machines to the public (me etc) found it all becomings a chore..

Edited by Mclaneinc
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The 1200XL was a high quality computer, had the best keyboard ever, and had a very sleek and sexy look. But it needed the PBI and an 80 column card to plug into that in order to be truly competitive with the Apple in a business sense. Sad really when you think how little extra cost would have been required to include the PBI, which was nothing more than an edge connection on the PCB (no connector required) and an opening in the case. We're talking pennies. And the PBI 80 column card was already in development prior to the 1200XL release.

 

Dam shame :dunce:

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Yep, the 1200XL and the announced 1450XLD were on my list the second I saw the advance literature from Atari to Maplin (for other suppliers as well I guess), the fancy brochure we got made me dribble for the XLD but I was going to settle for the 1200 until the 1450XLD was ready (the brochure said it was shipping later).

 

Both looked great and I've never seen a 1200XL in the wild but they look very nice..(no demo machines for us :( )

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