In 1962 Sir Clive Sinclair started his first electronics business, Sinclair Radionics, in Islington. Soon afterwards, in 1965 and less than 5 miles away, Lord Alan Sugar started in business by selling repaired TVs from his parents’ flat in Hackney. This activity led to the formation of Amstrad’s precursor, the AMS Trading Company, in 1968. Eighteen years later, in 1986, the destinies of these two entrepreneurs came together with Amstrad’s takeover of Sinclair’s brand name and product range.
After 1986, both companies continued to trade in their own way. Amstrad was eventually purchased by Sky Digital in 2007 for £125 million, while Sinclair continues to the present day as essentially a one-man research operation. So why did the two companies’ growth and prosperity vary so widely?
The difference in their focus, and resulting difference in their growth, has been interesting. From the outset, Sinclair has been driven by technology and innovation, whereas Sugar has gone for business opportunities and profitability. Sinclair’s first venture was the Sinclair Microamplifier, while AMS Trading’s first manufacturing venture involved producing plastic hi-fi turntable covers using injection moulding to undercut competitors using the traditional vacuum forming process. Sinclair then earned credit for introducing the concept of home computers, based on his 1980 launch of the ZX80, which weighed 12 ounces and was the first computer in the world available for below £100. Its successor, the ZX81, launched in 1981, sold over a million units worldwide.
Meanwhile, Amstrad was continuing with their policy of turning electronics products into affordable goods for homes and businesses throughout Europe, North America and Australasia. They didn’t seek technology for technology’s sake, and were not particularly high-tech. But they did build their business throughout the region by producing the right goods, at the right price and at the right time. They met a need and they were reliable, and they did this consistently rather than relying on the technology to intersect the needs of the customers, as happened on a hit and miss basis with Sinclair.
By developing this policy and applying it to their computer products throughout the Eighties, they had grown into an international £130 million pound computer business by 1986. This was based on their PCW 8256 Word Processor and then on their PC 1512 Personal Computer.
The Eighties were not so favourable to Sinclair, however. In 1984 they introduced the QL computer, which had several design flaws, and fully working QLs did not appear in shops until several months after the launch. The QL was nowhere near as successful as Sinclair’s earlier products, and the Spectrum+ which appeared in late 1984 fared no better. These problems were exacerbated by the very public failure of the C5 Electric Vehicle, which cost Sinclair £7 million. Further damage was inflicted by the commercial failure of the TV80 pocket television in 1983, with these factors adding up to investors’ loss of confidence in Sir Clive.
Faced with such an uncertain future, it was fortunate for Sinclair Research that Amstrad saw it as an investment opportunity and purchased the entire computer product range and brand name in 1986 for £5 million.
The ‘right prices’ part of Amstrad’s marketing equation is based on using the best manufacturing and assembly processes, as Sugar discovered with his turntable covers back in the Sixties. But it also depends on the availability of the right components, in the right place, at the right time, in the right quantities, at the right price, to the right specification, and with the right reliability. Getting all these parameters right, for any shipment to anywhere in the world can be a significant challenge, but a very important one as it can be key to the manufacturer’s success. Oracle Components understands this critical importance, which is why it doesn’t just source components: it profiles deliveries to keep its customers’ production lines moving, and their products competitive, anywhere in the world. Like Amstrad, Oracle recognizes how OEMs rely critically on maintaining a competitive and reliable manufacturing process, irrespective of their technology level.