They say fate's a fickle mistress, but destiny's got nothing on the free market. For every Microsoft-esque success story, there's the burnt out husk of Sun Microsystems (R.I.P.). The really interesting tales have nothing to do with overwhelming successes or overwhelming failures, though; any budding novelist can tell you that a good story needs some tension.
Join us as we take a look back at ten companies that found themselves broken, beaten, and battered, leaning on the ropes and looking woozy. Seven of them were able to summon the strength of Soda Popinksi and roar back to life stronger than ever. Two Glass Joe wannabes tried to put up a fight but found themselves on the mat in short order. The last one's still covering its face and playing rope-a-dope. Can it survive after staring down the face of extinction? Call them good or call them lucky – just don't call it a comeback.
"Intel?" we can hear you asking. "How do you start with Intel? They're friggin' Intel!" Well, they weren't always – at least not as the chip-slinging microprocessor giant that you know and love. Once upon a time, Intel was known more for its memory-making prowess. And aside from a momentary downward dip in the 1974 thanks to a nationwide recession, things went pretty well for the company.
Flash forward to the early 80s: the majority of Intel's focus remained in DRAM – and things weren't looking so good for DRAM manufacturers. Competitive Japanese suppliers had sucked the profit margins out of the business for companies like Intel. Things got ugly; Intel imposed extra hours on salaried employees and pay cuts on, well, pretty much everybody. Something had to change, and it had to change quickly.
That something ended up being a massive shift in Intel's focus. After striking gold with the 80286 – better known to geeks as the 286 – in 1982, CEO Andrew Grove chose to pull back from the cut-throat DRAM market and focus instead on microprocessors, which didn't have as many up-and-down cycles as other semiconductor components. Intel decided to keep the design of its megapopular 32-bit 386 chip to itself, making it the first single-sourced microprocessor in history – which meant PC makers could only get the chip from Intel. The cash flowed like wine and Intel as we know it was born.
Like Intel, AMD maintained a heavy presence in the RAM market throughout the early 1980s, and like Intel, the rise of Japanese competition devastated AMD's bottom line. Then, in 1986, Intel canceled a contract that allowed AMD to build the Am286 as a second-source 80286 supplier, kicking off a legal battle that lasted until 1994. To top it off, the country was in the midst of a recession. Broke and barred from building the popular 286 chipset, AMD was forced to lay off a portion of its workforce.
AMD came to the same conclusion as Intel; the future lied in microprocessors. And if Intel wouldn't hand over the design for the 386, AMD would figure it out itself, dammit! The company's engineers hunkered down and in 1991, AMD achieved its goal: the debut of the speedy, reverse-engineered Am386. Seven months and 1 million Am386s later, AMD was once again on the path to success – a path that would eventually lead to the internally developed K5 processor.
In the early 90s, Iomega's Bernoulli Box was nearly 10 years old and starting to show its age (and, um, it was still incredibly expensive) while standard disk drives were plummeting in price and becoming more common in PCs. Unsurprisingly, Iomega was hemorrhaging cash and stock value. By 1993, the company was flat broke and its stock was worth less than $2. CEO Fred Wenninger said enough was enough and jumped ship.
His replacement, Kim Edwards, decided that if the company wanted to pull itself out of the quagmire, it needed a cheaper product with more consumer appeal. The Zip Drive launched towards the end of 1994 with a $200 price tag and reasonably priced 25MB and 100MB disks. Buoyed by a massive pre-launch ad campaign, the Zip Drives sold out immediately, then kept on selling. Six months after the Zip Drive's launch, Iomega's stock rose ten-fold. By 1996, the company was rolling in cash, bringing in over $1.2 billion in revenue. Disaster had been averted, and then some.
Footnote: The Zip Drive saved Iomega, but the company didn't stay on top. By 1998, the Zip Drive's "Click of Death" was a well-known and much-hated sound. The rise of cheap CD burners sealed the Zip Drive's fate. Iomega's still around, but in reduced form.
Razer got off to a fast start with its highly accurate Boomslang mouse. Before you could say "Boom! Headshot!", Razer was everywhere serious FPS fans gathered, launching the Cyber Athlete Professional League and sponsoring Jonathan "Fatal1ty" Wendel.
Then literal disaster struck: while the company was still reeling from the dot-com bubble burst, a major earthquake completely destroyed Razer's manufacturing facilities in Taiwan. In the blink of an eye, Razer's inventory was wiped out, along with its ability to replenish it.
The launch of the optical Viper 1000 and redesigned Boomslang variants in 2003 couldn't rescue Razer's devastated business, and by 2004, most of the senior management fled the company, leaving co-founders Min-Liang Tan and Robert "Razerguy" Krakoff in charge. They rolled out the 1600 dpi Diamondback towards the end of the year to the delight of reviewers and consumers alike. Scads of Diamondbacks sold – in fact, the initial run of the limited edition Diamondback Plasma sold out in just over half an hour – and Razer follows it up with the widely acclaimed 2000 dpi Copperhead in 2005. Before you know it, Razer bigwigs were lighting their cigars with $100 bills once again.
Flash back to 1995: 3D cards were the hot new high-end thing in PCs, and tons of companies were trying to establish a foothold in the market. Nobody had even settled on a standard way of displaying 3D graphics. Two year old Nvidia threw its young weight behind quadratic texture maps when it released its NV1 graphics card.
Shortly after Nvidia launched the NV1, Microsoft released Direct3D, which relied on polygons for its 3D effects. Developers ran screaming from the quadratic-rific NV1 and OEMs treated the card like the kiss of death. A Sega-funded NV2 chip never actually materialized. Cue the pink slips.
Nvidia went to work on the RIVA 128 in 1997. After the disastrous NV1 and the vapor-ware NV2, big things weren't expected from the GPU, but big-enough things were delivered. Critic's weren't exactly blown away – both boot, Maximum PC's forefather, as well as Tom's Hardware declared 3dfx's Voodoo Graphics superior to the RIVA 128. But unlike 3dfx's offering, the RIVA 128 offered both 2D and 3D support – a feature OEMs loved. PC manufacturers snapped the RIVA 128 up in droves and Nvidia's been sitting pretty ever since.
By the turn of the century, Nvidia had not only come back from the brink of extinction, it was dominating the graphics card market with its GeForce 256 card. 3dfx, once king of the graphics arena with its Voodoo line, was dying a slow death en route to being acquired by Nvidia. ATI's Rage, a traditional contender, was beginning to look weak; the Rage 128 GL, Rage 128 Pro and Rage Fury Maxx all fizzled in one way or another. Graphics hardware was degenerating into a distinctly one-horse race.
Then came Radeon.
The Radeon GPU did it all when the line launched in 2000, and it did it all well. Radeon offered a bevy of graphical options that were powerful enough to stand toe-to-toe with Nvidia's benchmark-leading GeForce2 GTS. Radeon restored ATI to a competitive, if not quite dominant, position in the graphics market. When the Radeon 9700 Pro hit the streets in 2002, it blew other graphics cards out of the water – even Nvidia's. Even though AMD long ago bought the reinvigorated ATI for a whopping $5.4b, the Radeon line still lives on.
Creative Technology started out as a small computer repair shop in Singapore. How many other major companies can say that? In any case, the co-founders quickly moved into the computer manufacturing business themselves. In 1986, the company rolled out the Cubic CT, a computer developed specifically for the Singapore market. It flopped, and flopped hard. Creative Technology stood on the brink of extinction and decided to focus their energy – and dwindling cash reserves – on the innovative sound card it created for the Cubic CT.
Creative's first major sound card, dubbed the Creative Music System, launched in 1987. It didn't quite flop, but the rival AdLib sound card quickly mopped the floor with the newcomer.
Creative Labs, Creative Technology's US subsidiary, paid careful attention while Adlib was busy kicking its butt. The result? The legendary Sound Blaster. When the Sound Blaster debuted in 1989, it featured all the tech behind the Creative Music System, plus the Yamaha YM3812 chip that powered AdLib. That meant that the Sound Blaster was fully compatible with every game that included AdLib support. Plus, the Sound Blaster packed in a joystick port – a relative rarity in those days. Creative combined that technological superiority with a hyper-aggressive ad campaign and by the end of 1990 the Sound Blaster was the best selling computer add-on around and a must-have accessory for PC gamers.
Sure, SmartSuite's still around. So's Lotus, kinda – but not in any way that matters to most consumers. Lotus focused on the IBM OS/2 in the early 1990s and found itself blindsided by the success of Windows 95 and its 32-bit architecture. After buying a bunch of other apps to try and compete with the various Windows programs, Lotus bundled them together under the SmartSuite name. Even though SmartSuite came gratis on many PCs, Microsoft Office wiped the floor with Lotus' product (partly because of Microsoft's Office bundling shenanigans) and took Lotus' throne as the king of all office applications. IBM acquired Lotus in a hostile takeover and the once-giant is now part of IBM's software group, a shadow of its former self.
When the hardware-focused palmOne and the OS-focused PalmSource merged to reform Palm, Inc. in 2005, the glory days of the PalmPilot (and heck, even the Treo) were behind them. RIM's BlackBerry stole a lot of PalmPilot fans and Apple's iPhone would soon steal even more. Palm had a plan to get back on track, though. The wrong one, i.e. the Pre.
Unfortunately for Palm, consumers didn't like the Pre as much as the people at Palm did. The company signed an exclusivity deal with Sprint, who was only the third largest US carrier. The keyboard kinda sucked, and webOS's apps couldn't hold a candle to Apples. Perhaps worst of all there simply wasn't any reason to buy a Pre (or its follow-up, the Pixi) over a BlackBerry, iPhone or Android phone. In fact, in 2010, Palm's CEO admitted that he'd never even touched an iPhone.
HP purchased Palm for $1.2 billion, less than a year after the Pre hit the streets. HP quickly killed off the Palm brand and is focusing its efforts on webOS. Edit: The day this article was published, HP killed webOS as well.
RIM's in the same place Palm was five years ago; fading away. Android's climb to the top of the smartphone heap has come largely at RIM's expense. Since June, RIM's shares have hit a five year low and the company's been forced to axe over 2,000 workers, which amounts to about 11 percent of its workforce. Clearly RIM's on the ropes – and it needs to land a hit.
But does the old fighter have any gusto left? RIM pinned high hopes on its PlayBook tablet, but then they rushed it to market prematurely – without native email, calendar or contact apps – and struggled with a small recall early. Sales have been so underwhelming that Sprint recently decided that they didn't really want to carry a 4G PlayBook after all.
Before the PlayBook, RIM had high hopes for the BlackBerry Torch – hopes that failed to turn into reality. "If you don't already own a BlackBerry, you will not want this phone," Matt Buchanan said in his Gizmodo review of the Torch. "And if you do, you still might not want it, even if it may very well be the best BlackBerry ever." Ouch.
So what's left? RIM plans on rolling out its first smartphone with the QNX operating system in the first quarter of 2012. Will "Colt" be the magic pill RIM needs? The initial signs are shaky, and the digerati are already skeptical. QNX is the OS behind the underwhelming PlayBook. That's not a tremendous heritage (especially if it's still lacking email support when Colt launches), but if the phone manages to appeal to consumers rather than just the traditional RIM business client, the company still has time to right the ship.
So what did we get wrong? What did we get right? We're sure at least one of you thinks we're idiots – why? Did we forget about a company? Let us know in the comments!