Editing Acorn Computers (section)

====Financial problems====
Having become a publicly traded company in 1983 during the home computer boom, Acorn's commercial performance in 1984 proved to be consequential. Many home computer manufacturers struggled to maintain customer enthusiasm, some offering unconvincing follow-up products that failed to appeal to buyers. The more successful manufacturers, like Amstrad, emphasised the bundling of computers with essential peripherals such as monitors and cassette recorders along with value for money. The collapse of the market from the manufacturers' perspective, it was argued, was due to the "neglect of the market by the manufacturers".<ref name="pcw198503" /> Market adversity had led to [[Atari]] being sold,<ref>{{Cite news |last = Sanger |first = David E. |title = Warner Sells Atari To Tramiel |newspaper = [[The New York Times]] |pages = Late City Final Edition, Section D, Page 1, Column 6, 1115 words |date = 3 July 1984 |url = http://select.nytimes.com/gst/abstract.html?res=F30B10FF395D0C708CDDAE0894DC484D81&scp=2&sq=atari+tramiel+240&st=nyt |url-status = live |archive-url = https://web.archive.org/web/20081206024423/http://select.nytimes.com/gst/abstract.html?res=F30B10FF395D0C708CDDAE0894DC484D81&scp=2&sq=atari+tramiel+240&st=nyt |archive-date = 6 December 2008}}</ref> and [[Apple Inc.|Apple]] nearly went bankrupt.

The Electron had been launched in 1983, but problems with the supply of its [[uncommitted logic array|ULA]] meant that Acorn was not able to capitalise on the 1983 Christmas selling period.<ref>[http://acorn.chriswhy.co.uk/Computers/ElectronComputers.html Chris's Acorns] {{webarchive |url=https://web.archive.org/web/20091011011402/http://acorn.chriswhy.co.uk/Computers/ElectronComputers.html |date=11 October 2009}} Acorn Electron - Release and ULA supply issues.</ref> A successful advertising campaign, including TV advertisements, had led to 300,000 orders, but the Malaysian suppliers were only able to supply 30,000 machines.{{citation needed|date=August 2020}} The apparently strong demand for Electrons proved to be ephemeral: rather than wait, parents bought [[Commodore 64]] or [[ZX Spectrum]] for their children's presents. [[Ferranti]] solved the production problem and in 1984, production reached its anticipated volumes, but the contracts Acorn had negotiated with its suppliers were not flexible enough to allow volumes to be reduced quickly in this unanticipated situation, and supplies of the Electron built up. At the time of the eventual financial rescue of Acorn in early 1985, it still had 100,000 unsold Electrons plus an inventory of components which had all been paid for and needed to be stored at additional expense.<ref name="acornuser198504">{{ cite news | url=https://archive.org/details/AcornUser033-Apr85/page/n8/mode/1up | title=Beeb safe, but ABCs under review | work=Acorn User | date=April 1985 | access-date=31 August 2020 | pages=7 }}</ref> 40,000 BBC Micros also remained unsold.<ref name="fleck19880301" />

After a disappointing summer season in 1984, Acorn had evidently focused on making up for lost sales over the Christmas season, with the Electron being a particular focus. However, a refusal to discount the BBC Micro also appeared to inhibit sales of that machine, with some dealers expressing dissatisfaction to the point of considering abandoning the range altogether. With rumours of another, potentially cheaper, machine coming from Acorn,<ref name="pcw198503">{{ cite news | url=https://archive.org/details/PersonalComputerWorld1985-03/page/94/mode/1up | title=Unfinished business | work=Personal Computer World | date=March 1985 | access-date=21 November 2020 | last1=Kewney | first1=Guy | pages=94, 99 }}</ref> dealers eventually started to discount heavily after Christmas.<ref name="pcw198504">{{ cite news | url=https://archive.org/details/PersonalComputerWorld1985-04/page/106/mode/1up | title=Acorn reprise | work=Personal Computer World | date=April 1985 | access-date=19 November 2020 | last1=Kewney | first1=Guy | pages=106–107 }}</ref> For instance, high street retailer [[Rumbelows]] sought to clear unsold Christmas stocks of around 1500 machines priced at £299, offering a discount of around £100, also bundling them with a cassette recorder and software.<ref name="popcompweekly19850228b">{{ cite news | url=https://archive.org/details/popular-computing-weekly-1985-02-28/page/n9/mode/1up | title=Cut price BBC B's | work=Popular Computing Weekly | date=28 February 1985 | access-date=20 November 2020 | pages=10 }}</ref> The rumoured machine turned out to be the BBC Model B+ which was a relatively conservative upgrade and more, not less, expensive than the machine it replaced.<ref name="pcw198506_acorn">{{ cite news | url=https://archive.org/details/PersonalComputerWorld1985-06/page/124/mode/1up | title=Acorn anti-climax | work=Personal Computer World | date=June 1985 | access-date=28 April 2021 | last1=Kewney | first1=Guy | pages=124 }}</ref> It was speculated that the perception of a more competitive machine soon to be launched might well have kept potential purchasers away from the products that Acorn needed to sell.<ref name="pcw198507_acorn">{{ cite news | url=https://archive.org/details/PersonalComputerWorld1985-07/page/111/mode/1up | title=Newsprint | work=Personal Computer World | date=July 1985 | access-date=28 April 2021 | last1=Kewney | first1=Guy | pages=111 }}</ref>

Acorn was also spending a large portion of its reserves on development: the BBC Master was being developed; the ARM project was underway; the Acorn Business Computer entailed a lot of development work but delivered few products, with only the 32016-based model ever being sold (as the Cambridge Workstation). The company's research and development staff had grown from around 100 in 1983 to around 150 in 1984, the latter out of a total of 450 employees. Meanwhile, Acorn's chosen method of expansion into West Germany and the United States through the establishment of subsidiaries involved a "major commitment of resources", in contrast with a less costly strategy that might have emphasised collaboration with local distributors. Localisation of the BBC Micro for the US market also involved more expenditure than it otherwise might have due to a failure to consider local market conditions and preferences, with "complex technical efforts" having been made to make the machine compatible with US television standards when local market information would have indicated that "US home computer users expect to use a dedicated personal computer monitor".<ref name="fleck19880301" /> Consequently, obtaining Federal approval for the BBC Micro in order to expand into the United States proved to be a drawn-out and expensive process that proved futile: all of the expansion devices that were intended to be sold with the BBC Micro had to be tested and radiation emissions had to be reduced. It was claimed that Acorn spent £10 million on its US operation without this localised variant of the BBC Micro establishing a significant market share.<ref name="amstradcomputeruser198505">{{ cite magazine | url=https://archive.org/details/AmstradComputerUser06-0585/page/n97/mode/2up | title=Amstrad Education Campaign | magazine=Amstrad Computer User | last1=Littler | first1=Gareth | date=May 1985 | access-date=13 February 2023 | pages=98–99 }}</ref> The machine, however, did make an appearance in the school of ''[[Supergirl (1984 film)|Supergirl]]'' in the 1984 film ''Supergirl: The Movie''.<ref>{{cite web|url=http://www.starringthecomputer.com/feature.php?f=396|title=Starring the Computer - Supergirl|website=starringthecomputer.com|url-status=dead|archive-url=https://web.archive.org/web/20110716132439/http://www.starringthecomputer.com/feature.php?f=396|archive-date=16 July 2011|access-date=2 August 2010}}</ref>

Acorn also made or attempted various acquisitions. The Computer Education in Schools division of [[International Computers Limited|ICL]] was acquired by Acorn in late 1983 "reportedly for less than £100,000", transferring a staff of six to Acorn's Maidenhead office to form Acorn's Educational Services division and to provide "the core of education support development within Acorn".<ref name="popcompweekly19831117">{{ cite news | url=https://archive.org/details/popular-computing-weekly-1983-11-17/mode/1up | title=Acorn shot in the arm | work=Popular Computing Weekly | date=17 November 1983 | access-date=30 December 2020 | pages=1 }}</ref> Having had a close relationship with [[Torch Computers]] in the early 1980s, Acorn sought to acquire Torch in 1984 with the intention of making Torch "effectively the business arm" of Acorn, despite a lack of clarity about competing product lines and uncertainty about the future of Acorn's still-unreleased business machine within any rationalised product range,<ref name="acornuser198406a">{{ cite news | url=https://archive.org/details/AcornUser023-Jun84/page/n8/mode/1up | title=Acorn acquires Torch | work=Acorn User | date=June 1984 | access-date=4 November 2020 | pages=7 }}</ref> although this acquisition was never completed,<ref name="popcompweekly19850214">{{ cite news | url=https://archive.org/details/popular-computing-weekly-1985-02-14 | title=Black week for Acorn | work=Popular Computing Weekly | date=14 February 1985 | access-date=20 November 2020 | pages=1 }}</ref> with Torch having pulled out as Acorn's situation deteriorated.<ref name="pcn19850216">{{ cite news | url=https://archive.org/details/personal-computer-news-099/page/n1/mode/1up | title=Acorn searches for way out of crisis | work=Personal Computer News | date=16 February 1985 | access-date=11 November 2020 | pages=1 }}</ref>

At around the same time, Acorn also bought into Torus Systems - a company developing a "graphics-controlled local network called Icon" for the IBM PC platform - to broaden Acorn's networking expertise.<ref name="acornuser198406b">{{ cite news | url=https://archive.org/details/AcornUser023-Jun84/page/n8/mode/1up | title=Acorn's Icon | work=Acorn User | date=June 1984 | access-date=4 November 2020 | pages=7 }}</ref> Icon was a solution based on Ethernet, as opposed to the Acorn-related Econet and [[Cambridge Ring (computer network)|Cambridge Ring]] technologies,<ref name="pcw198408_torus">{{ cite news | url=https://archive.org/details/PersonalComputerWorld1984-08/page/94/mode/1up | title=Newsprint | work=Personal Computer World | date=August 1988 | access-date=26 April 2021 | last1=Kewney | first1=Guy | pages=94 }}</ref><ref name="minimicrosystems198411_torus">{{ cite magazine | url=https://archive.org/details/bitsavers_MiniMicroS_172417378/page/83/mode/1up | title=Britain's Torus Systems employs icons to help IBM PC users on local networks | magazine=Mini-Micro Systems | last1=Jones | first1=Keith | date=November 1984 | access-date=4 March 2023 | pages=83–84, 86 }}</ref> equipping appropriately specified IBM-compatible computers to participate on a network using a relatively low-cost Ethernet interface card utilising Intel's 82586 network controller chip.<ref name="mmw19841112_torus">{{ cite magazine | url=https://archive.org/details/sim_micro-marketworld_1984-11-12_7_22/page/107/mode/1up | title=British Information Services Advertising Supplement | magazine=Micro Marketworld | date=12 November 1984 | access-date=12 November 2023 | pages=104–109 }}</ref>{{rp|pages=108}} Torus later released a network management solution called Tapestry,<ref name="pcw198505_torus">{{ cite news | url=https://archive.org/details/PersonalComputerWorld1985-05/page/117/mode/1up | title=Newsprint | work=Personal Computer World | date=May 1985 | access-date=28 April 2021 | last1=Kewney | first1=Guy | pages=117 }}</ref> based on Icon and marketed by IBM for its own networking technologies.<ref name="dataprocessing198605_torus">{{ cite magazine | url=https://archive.org/details/sim_data-processing_1986-05_28_4/page/n32/mode/1up | title=Networking made simpler | magazine=Data Processing | last1=Jones | first1=Russell | date=May 1986 | access-date=5 March 2023 | pages=199–203 }}</ref> Torus also released support for the use of Novell's Advanced Netware product on its own networking hardware.<ref name="dataprocessing198610_torus">{{ cite magazine | url=https://archive.org/details/sim_data-processing_1986-10_28_8/page/n57/mode/1up | title=Third party networking | magazine=Data Processing | date=October 1986 | access-date=5 March 2023 | pages=444 }}</ref> The company eventually entered receivership in 1990 with Acorn reporting a £242,000 loss associated with the investment.<ref name="acornuser199012_torus">{{ cite news | url=https://archive.org/details/AcornUser101-Dec90/page/n8/mode/1up | title=Hard Times | work=Acorn User | date=December 1990 | access-date=7 April 2021 | pages=7 }}</ref> Such were the ambitions of Acorn's management that a joint venture company was established in Hong Kong under the name ''Optical Information Systems'', apparently engaging in the development of "digital, optical technology for computer data storage".<ref name="computerworld19840521_acorn">{{ cite magazine | url=https://archive.org/details/computerworld1821unse/page/118/mode/1up | title=Supershorts | magazine=Computerworld | date=21 May 1984 | access-date=3 September 2022 | pages=118 }}</ref> Involving a Hong Kong turntable manufacturer, Better Sound Reproduction Ltd., Acorn were to set up a research and development facility in Palo Alto, California, US to bring "compact laser disk drives designed as floppy disk drive replacements" to market within 18 months.<ref name="minimicrosystems198407_acorn">{{ cite magazine | url=https://archive.org/details/bitsavers_MiniMicroS_183091910/page/24/mode/1up | title=Breakpoints | magazine=Mini-Micro Systems | date=July 1984 | access-date=4 March 2023 | pages=15–16, 19–20, 23–24 }}</ref>{{rp|pages=24}}

In February 1985, speculation about the state of Acorn's finances intensified with the appointment of a temporary chief executive, Alexander Reid, to run the company, together with the announcement that Acorn had replaced its financial advisors, Lazards, and that the company's stockbrokers, Cazenove, had resigned, ultimately leading to the suspension of Acorn shares, these having fallen to a low of 23 pence per share. With these events reportedly being the result of disagreement between Acorn and Lazards over the measures needed to rescue the company, with Lazards favouring a sale or refinancing whereby the founders would lose control, Acorn and their replacement advisors, Close Brothers, were reported to be pursuing a "radical reorganisation of the company".<ref name="popcompweekly19850214" /> Lazards had sought to attract financing from [[General Electric Company|GEC]] but had failed to do so. Close Brothers also found themselves in the position of seeking a financing partner for Acorn, but in a significantly more urgent timeframe, making "financial institutions or a large computer company" the most likely candidates, these having the necessary resources and decision-making agility for a timely intervention.<ref name="fleck19880301">{{ cite journal | url=https://journals.sagepub.com/doi/10.1177/030630708801300301 | title=Managing Growth at Acorn Computers | journal=Journal of General Management | date=1 March 1988 | access-date=19 June 2021 | volume=13 | issue=3 | pages=4–23 | doi=10.1177/030630708801300301 | last1=Fleck | first1=Vivien | last2=Garnsey | first2=Elizabeth | s2cid=168090550 }}</ref>