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%% CES Report                                              By Kris Kuntz %%
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1/6-9/1994 - CES Consumer Electronics Show, Las Vegas, Nevada.


This is a report of a conversation held at CES between John DiLullo, head of
Marketing for Commodore U.S. and an Amiga dealer.

-Kris Kuntz & Jeff Cupp, Digital Arts, Bloomington, IN

     Allow us to introduce ourselves to you. We are a full-service Amiga
dealer in Bloomington, Indiana. It's not a huge town, not a small town either
and home to Indiana University. We have been a dealer for the last 3 1/2 years
and are very active in promoting all aspects of the Amiga. Yes, we sell Video
Toasters but they account for only about 1/2 of the number of actual computers
we sell. We advertise in local media, we go out and do many shows and
demonstrations, and we have worked hard to make our store well-stocked, clean
and professional looking. We are, as I was told once by a Commodore rep, the
kind of store Commodore likes to have promoting their product.


     We have made a commitment to Commodore and work hard on their behalf.
(Many of you at this point will undoubtedly label us as stupid.)

     We have heard everyone's complaints about Commodore's management or
mismanagement of the Amiga line and tend to agree at least a little with both
sides. (If you think Commodore treats its dealers badly, check out what Apple
has done to theirs over the past several years!). Commodore's biggest problem
seems to be in marketing and we realize that they don't have much of a budget
here in the United States. That problem could be helped by Commodore
International but they seem to feel the U.S. is not worth it. Since we are not
a large chain store, we have become rather creative in getting the most from
our marketing dollar. We thought we might have some low cost ideas that
Commodore U.S. could make use of.
     So here's the meat of this letter. We decided to take a break from work
and go to the Consumer Electronics Show in Las Vegas this last week to see
Commodore's main announcement of the CD32 here in the United States. Their
booth was upstairs away from the main floor and about as far away from the
"game machine" area as they could possibly be. As far as we could tell, there
were no big announcements of this great new game machine and our feeling was
that the "launch" was more of a sputter.


     While we were in the both, we spoke with John DiLullo, head of marketing
for Commodore U.S.. The following are comments he made to us:
        1) Commodore doesn't want Amiga dealers selling the CD32s. He told us
that "the Amiga market is the wrong place to sell the CD32s" and that "Amiga
people will find the CD32s". At the show they were looking for chain stores to
pick up the CD32. This is why none of your local dealers have CD32s yet -
unless they have worked out a deal with a Canadian dealer to bring them in
through Canada. Commodore is really up set by dealers who have managed to do
this, they claim it will mess up their U.S. marketing plan. No one seems to be
able to tell us about the U.S. marketing plan. A really super 30-second TV
commercial was done for Europe and we were able to see it in the booth at CES.
Of course, we were also told that it would be too expensive to really run
here in the U.S..  It was actually a question to Mr. DiLullo about allowing
dealers to have copies to do local TV insertions  which brought up the initial
comment of them not wanting dealers to sell CD32s. Obviously they don't really
want our help promoting them either. We are also Commodore developers and
happen to have had a CD32 for demo since early December. We informed Mr.
DiLullo that we had been showing it to both Amiga and non-Amiga owners and that
we actually had several pre-sold. He said that that was too bad, they'd just
have to get them somewhere else and gave us the strong impression that it was a
real waste of our time even showing the CD32 to people (unless we were planning
it simple to help promote any products we might develop.)
   2) He told us that the CD32 would be a much better product for Commodore to
sell since support would be really unnecessary. He suggested that the computers
required service technicians, training for purchasers and worst of all parts
supplies for repairs. "If a CD32 breaks they just bring it back and get another
one." He seemed to like the idea of Commodore simply being a manufacturing firm
for a single, simple product.
   3) Mr. DiLullo specifically told us that the Amiga 1200 cannot compete with
386 systems and because of this, Commodore plans to stop manufacturing 1200s.
They will not officially discontinue them, just stop making them. He did say
that after they started selling CD32s in Europe that 1200 sales doubled but he
feels that would never happen in the U.S.. When we suggested that we sell 1200s
against PCs all the time because they have features lacking in PCs, he informed
us that that was a purely emotional reaction to the Amiga and not a legitimate
business reaction. He told us that the Amiga was only realistically going to
sell in the tiniest of niche markets and that was how it was always going to
be. (He used the pyramid example saying that the PCs were at the broad base of
sales and that the Amiga was at the smallest top point of the sales.) Intel
happened to be doing a presentation at the show which mentioned that by the
year 2000 it is expected that the average home will have 2.5 computers. We told
him that we saw no reason why the second computer in the home could not be an
Amiga (a PC being the first to fit with his views). He told us that basically
we were full of it and that it would absolutely never happen. "Amiga will never
be a household name."
  4) Last but most certainly not least, when we suggested that perhaps
Commodore should use its loyal customers on a local level to help promote the
Amiga, he informed us that "the fanatical Amiga owners are an embarrassment to
Commodore."

     So, after this amazing little talk with Mr. DiLullo, we went back to our
hotel and considered chucking it all and moving to the wilderness (no computers
for miles and miles). After we calmed down a bit we went back the next day and
spoke to some other people who know what's happening in the real world of
Commodore (distributors). Yes, Canada is starting to have product to sell and
we could be selling them too if Commodore would allow the normal distributors
to have them. One of the large distributors has told us that they expect
Commodore will change their minds about dealers when no chain stores start
ordering units to sell. They expect it will take until the end of the quarter
(late March) before they make them available to dealers though.

     As for 1200s, we actually found out this week that since the demand rose
so sharply in Europe, Commodore went back into production of 1200s and that
NTSC versions should begin to be more readily available.

     In regards to marketing or lack of marketing in the U.S., talking to Mr.
DiLullo cleared up many questions as to its poor quality here in the U.S.. When
the head of marketing obviously doesn't believe in the product he is to
promote, doesn't believe that anyone in the general market would ever want to
have his product, feels his product is a pain to support  and is "embarrassed"
by the current owners of his product, it's not surprising that his efforts to
promote the product are limp or non-existent. After talking to him we were
thoroughly embarrassed by Commodore. We can only hope that he is a very unusual
case at Commodore and that perhaps they are not aware of his attitudes and
comments. Since we were not able to talk to Geoff Stilley (General Manager
Commodore U.S.) or Mehdi Ali (President-Commodore International) we cannot
guarantee that Mr. DiLullo's comments really represent all of Commodore. As a
dealer, developer user, and stockholder we are appalled that anyone with those
kinds of attitudes would be put in charge of marketing or anything having to
do with sales of the Amiga product!

     We've written this letter because we want to let people know what
Commodore's plans really are. Below are the names and addresses of 3 people at
Commodore we would like you to write to as well as the address for the
Commodore Shareholder's Movement (they will take anything you send them to the
Commodore Board of Directors meeting coming up in March). We feel that
marketing needs to be strongly looked at, that dealers should be allowed to
carry CD32s along with all those chain stores and be allowed to start selling
them NOW, and that perhaps if Commodore was a bit more committed to us then we
might be able to help them regain some of the market here in the U.S..

     Please write a letter to them and send copies to all three gentlemen and
to the CSM (try to be polite and reasonable) telling them what you think about
the current situation and please offer suggestions (again, be polite-after all,
we're "fanatical Amiga owners" and will be dismissed if we don't appear
reasonable).
                    Mr. Geoff Stilley  & Mr. John DiLullo
                    Commodore Business Machines
                    1200 Wilson Drive
                    West Chester, PA  19380

                    Mr. Mehdi Ali
                    Commodore International Limited
                    375 Park Ave..
                    New York, NY  10152

                    Commodore Shareholder's Movement
                    P.O. Box 8296
                    Philadelphia, PA  19101

Author: Kris Kuntz
Retyped: Jeremiah S. Junken

For further correspondence, questions or other information, please mail:

 Jeff Cupp: jcupp@bix.com
Mike Sears: msears@bix.com