What happened to Tandy computers? Tandy was a pioneer in the personal computer industry, one of three companies that introduced pre-built, ready to run computers in 1977. And for about 12 years, they were a force to be reckoned with. But depending on how you count it, it came to an end in 1993 or 1995. Here’s what happened to Tandy computers and why they fell so quickly.
In 1989, the Tandy 1000 was still the best selling computer in the world but it was no longer profitable and sales were fading fast. Turnaround efforts failed and in 1993, Tandy sold its manufacturing operations to AST, another maker of PC clones.
How and when Tandy computers met their end
Let’s start this story with the ending. In May 1993, after 4 years of losing money, Tandy sold its computer operations to AST for $175 million. Today it looks like two sinking ships tying themselves together and hoping to stay afloat, but at the time, it looked like the lowest resistance way for AST to gain market share, eliminate a competitor, and perhaps gain some economies of scale.
As part of the agreement, Radio Shack stores would sell AST computers under the brand name Tandy by AST.
The deal finalized July 1, 1993. It didn’t work out the way either company hoped, and in the summer of 1995, Radio Shack reached a deal with IBM to sell IBM computers in Radio Shack stores. If you know the story behind the Tandy 1000, you’ll find the idea of Radio Shack selling IBM Aptiva computers interesting, and probably ironic.
For all intents and purposes, that was the end of the line for Tandy computers. Radio Shack put the Tandy name on a line of cheap computer accessories like mice and keyboards in the 2017 timeframe, but the last computers bearing the Tandy brand name sold in 1995.
It was an inglorious end for what had been a proud brand.
The rise of Tandy computers
The first Tandy computers didn’t have the Tandy brand name. Tandy was a leather craft company, and in the early 1960s, they bought a bankrupt Radio Shack corporation, thinking they could apply the principles behind their successful leather craft stores to the electronics hobby.
Using the 80/20 rule to turn around bankrupt Radio Shack
And they were right. Charles Tandy applied the 80/20 rule to Radio Shack, telling Radio Shack management to slash its inventory. He theorized that 20% of the items in their catalog accounted for 80% of their sales, and told management to find that 20%, cut the remaining 80%, and reap the benefit.
His theory was correct, and the stores quickly became profitable. It seems hard to believe now, but in the late 1970s and early 1980s, Radio Shack and McDonald’s had approximately the same number of stores, at around 6,500.
Entering the computer market with the TRS 80
Tandy entered the computer market in 1977. Inexpensive computers were becoming practical, and some Tandy employees argued there was a market for computers that didn’t have to be assembled from kits. Tandy management saw it as a low risk move. They could build about 6,000 units, and if they sold, they’d make money. If they didn’t sell, the stores could use them for record keeping in the back room.
The computer wasn’t branded Tandy. Tandy was the “T” in TRS 80.
The initial run of 6,000 units sold out immediately, and Tandy had a waiting list. Apple’s revisionist history aside, Tandy outsold everyone until 1981, when Commodore released the VIC 20 and overtook the TRS 80 line in sales. The follow-on, the Commodore 64, was the best selling computer in the world between 1983 and 1986.
The TRS 80 branding led to the unfortunate nickname of trash 80. So beginning in 1984, they phased out the TRS 80 branding and started calling the computers Tandy.
Tandy computers’ big comeback
In 1984, Tandy made a pivotal decision. They started selling IBM compatible computers. At the time, the decision had mixed reactions, with some people thinking IBM needed the competition to keep them honest, and others sad to lose Tandy as an innovator.
Tandy had a clone of the IBM PC, but the machine everyone remembers is the Tandy 1000. By fixing what was wrong with the IBM PC Jr, the Tandy 1000 was the right machine for its time, and when Commodore 64 sales started to taper off in the late 1980s, the Tandy 1000 overtook the C64 as the best selling computer on the market.
The problem with the Tandy 1000
The problem was, Tandy didn’t really have a succession plan. The appeal of Tandy computers was that they had better sound than other IBM compatible computers, and graphics capabilities that were almost as good as EGA while only costing as much as CGA.
Then, in 1987, IBM introduced a pair of new standards, MCGA and VGA, that were better than both of them. And in 1988, Ad Lib introduced its PC sound card. That quickly led to the more enduring Sound Blaster.
New competition from big box consumer electronics stores
In 1989, signs started appearing that this was going to be a problem. Tandy 1000 sales started declining. But more worrisome to management, the line wasn’t profitable anymore even though the line was still selling fairly well.
Between 1989 and 1992, Tandy’s manufacturing wing lost money, requiring $186 million in loans from its parent company. At the end of 1992, Tandy was #7 in market share with $1.5 billion in sales. That sounds pretty good, but that only amounted to 3.7 percent of the market, and they were losing between 4 and 16 million dollars per quarter.
That corresponds with the rise of big box consumer electronics stores like Best Buy, Circuit City, and Silo opening new locations nationwide. They sold inexpensive PC compatible computers from companies like AST, Compaq, Packard Bell, Acer, and a revolving door of other brands, some forgotten, some less so.
The quality of these computers varied widely, but the prices were aggressive, and they were more aggressive at releasing newer models with faster processors.
The stores weren’t the behemoths that they are today. In the 1980s, consumer electronics stores were closer in size to a grocery store. But that still meant the stores were three or four times the size of a Radio Shack. So they could dedicate more space to computers than Radio Shack could.
They didn’t always beat Tandy on price, but they didn’t necessarily have to. They offered multiple options with better expandability and a better selection of upgrades and peripherals, at the very least.
The Tandy 1000 line didn’t age gracefully
And Tandy was slow to react. In 1993, I had a classmate asked me what it would take to upgrade his computer to run Windows. I asked how old it was, and he said it was about a year old. I told him I would take a look at it. It was a Tandy 1000RL, which had an 8086 processor in it and only 512K of RAM. I was flabbergasted Radio Shack was still selling that level of machine in 1992. Windows might install on the machine but would have provided a miserable experience.
The problem with being that far behind the curve in the early 1990s, when the industry was changing very quickly, was that it led nowhere good. It was hard to make a sale. And when you did make a sale, you wouldn’t have a happy customer. Someone who bought an outmoded machine in 1991 or 1992 certainly wasn’t going to buy its replacement at Radio Shack. They might boycott the store entirely, for that matter. When you make a major purchase, you want to feel like you didn’t waste your money.
Tandy tried to reverse its fortunes by entering into joint partnerships with Matsushita, the parent company of Panasonic, and Digital Equipment Corporation, starting in 1989. Both of them had tried to enter the PC business and had uneven results, so pooling the resources made some sense. This explains some of the odd mashup computers from the early ’90s that are clearly Tandy inspired, but have DEC or Panasonic branding. The Panasonic Business Partner 1650 is an example of such a machine, which even says on the label that Tandy manufactured it in the USA for Panasonic. But the alliances didn’t have the desired effect, so by 1992, they had all gone their separate ways.
So in 1993, Tandy had a manufacturing operation that had been losing money since 1989, an excess of manufacturing capacity, and a product line that was looking increasingly outmoded.
Selling its factories to AST and having AST slap the Tandy name on some more up-to-date computers seemed like a good idea.
Tandy computers fumbling toward their last hurrah
Tandy was a bit slow to retire the Tandy 1000 line. By 1990, the name was outmoded, associated with obsolete PC standards for graphics and sound. Tandy continued to use the name on the Tandy 1000RSX, a 386 SX based machine with VGA graphics and obsolescent Tandy sound.
What was worse was that they continued to sell less capable machines next to it, as entry level computers. The problem was, without the ability to run Windows, if you bought one, it was easy to feel like you wasted your money.
And as Youtuber VWestlife observed, they showed off a substandard VGA monitor with a .52mm dot pitch in the stores. The price was great but the monitor was fuzzy and offputting. The big box stores had those cheap monitors too, but they didn’t put them front and center.
The Tandy Sensation
The last hurrah for Tandy was a computer called the Tandy Sensation. The Tandy Sensation met the emerging standard for a multimedia PC, with a 486SX CPU, Super VGA graphics and Sound Blaster compatible sound, as well as a CD-ROM drive.
But while it was a sensation compared to what it replaced, everyone else was making something comparable. The larger consumer electronics stores could beat Radio Shack’s price, selection, or both.
Tandy had an answer for that: custom orders. You could go into the store, specify what CPU, what size hard drive, and how much memory you wanted, then they would build it at the factory and ship it to you, much like Dell or Gateway 2000.
It was a good idea, but it didn’t provide the immediate turnaround Tandy wanted.
How Tandy could have turned its computer line around
You can’t fault Tandy for not releasing the Sensation earlier, since it was based on an industry standard that finalized in late 1992. But they needed to do something closer to what had become a mainstream PC much earlier than they did. The Tandy 1000RSX wasn’t quite mainstream enough and it wasn’t soon enough.
At the very least, Tandy needed to release something that met the original Multimedia PC standard (16 MHz 386SX, 2 MB RAM, 1X CD ROM, VGA graphics, Sound Blaster, Windows 3.0) in the fall of 1991 when that standard finalized. Having a budget machine that skipped the sound card and CD ROM drive would have been fine, as long as they had the upgrades available in the store.
If they’d updated their line earlier and offered custom orders earlier, this story probably would have ended differently.
Tandy computers legacy
Tandy computers came to a rather inglorious end, like many companies in the hyper competitive computer marketplace of the early 1990s. For years, it was easy to dismiss them as just another company that failed to keep up with the times.
But that’s an oversimplification. In the 1970s, they helped launch the industry. When you talk to an IT professional over the age of 40, their first computer probably wasn’t an Apple. It’s more likely their first computer was either a Tandy or a Commodore.
And I will argue the reason there’s about a 90% chance you are reading this on a PC with an Intel or Intel compatible processor in it has a lot to do with Tandy. In 1985, it looked like the future belonged to computers based on the Motorola 68000 CPU. But Tandy was right there at the right place and the right time with a cheap enough, good enough PC compatible with a big enough line of interesting software and somewhere between 6,500 and 7,000 retail locations to sell all of it in. The Atari ST struggled to compete with it. So did the Amiga.
The PC ecosystem really came into its own sometime around 1988, but Tandy and Radio Shack extended it the lifeline it needed to make it to 1988.
In 2019, retro computing Youtubers and bloggers started the tradition of Septandy, using the month of September to recognize Tandy’s contributions to computing history.