Bowmar Instruments Corp. Files for Bankruptcy
Radio Electronics, May, 1975
Bowmar Instruments Corp., formerly Bowmar/ALI, Inc., became famous for its
blowing away the electronic calculator marketplace in the fall of 1971 by
manufacturing and selling high-quality, efficiently mass-produced,
and market-breaking priced rechargeable battery-powered handheld
electronic calculators.
Initially, Bowmar/ALI, Inc. formed as a part of Bowmar Instruments when
it acquired Acton Laboratories, Inc. (the "ALI" in Bowmar/ALI) in 1965.
ALI manufactured LED display modules for calculators with the intention
of selling them to Japanese calculator companies. As it turned out,
that plan backfired when there were issues with Japanese government
protectionist import policies that made selling the display in Japan
impractically expensive, and Bowmar acquired them with the thought of
making a handheld electronic calculator using the reasonably
inexpensive display modules that Acton Labs manufactured.
In the fall of 1971, Bowmar introduced a nicely made hand-held, eight-digit
LED display (using Bowmar's own "Optostic" LED display module), rechargeable
battery-powered electronic calculator. This calculator marked the
beginning of the LED display in handheld calculators. LED displays had
distinct advantages over other types of displays because they worked on
low voltage (very suitable to battery power), and did not draw a lot of
current. The calculator, called the Bowmar 901B, was a basic
four-function calculator using a Texas Instruments(TI) TMS-0103
calculator-on-a-chip, as well as a high-quality TI-made Klixon™
keyboard. The 901B initially sold at a very attractive retail price of
$239.99, making it the least-expensive hand-held eight-digit
battery-powered electronic calculator on the market at the time by a fair
margin. Along with selling the calculator through mail order and retail
outlets under the Bowmar brand, the company also served as an OEM manufacturer
for Radio Shack, Commodore, Craig, Sears, and many
more retail outlets, branding the calculators with the retailers'
trade-name, as well as providing customizations such as cabinet coloring,
keyboard key colors and layout, and trim and keyboard bezel material
and color. The 901B and its OEM customer calculators sold like hotcakes,
arriving on the market just in time for the beginning of a new school year,
with mostly college students buying them up in a near frenzy.
In just under two years, Bowmar Instruments became the largest(volume)
manufacturer of electronic calculators in the world, as well as becoming a
rather cash-rich company on the profits.
As the mid-70's came about, the rest of the electronic
calculator manufacturers began to catch up. The ubiquitous availability of
Large-Scale Integration calculator chips, including the introduction of
inexpensive chip sets manufactured by Hitachi and NEC in Japan, made it
possible for just about anyone to start up an electronic calculator
manufacturing business with a modest startup investment. These factors
led to a slew of small US-based companies coming into the market making
inexpensive (and sometimes very shoddily-built) calculators that undercut
the price of Bowmar's calculators. These competitors would use inexpensive
US-made calculator chip sets or single-chip devices, and later, Japanese-made
calculator ICs, cheap circuit board material, crews of minimum-wage laborers
placing parts on circuit boards and assembling the calculators,
poorly-made clones (but of different enough design to avoid patent issues)
of the Texas Instruments Klixon(™) keyboards,
as well as low-quality thin-wall plastic cast cabinets for the calculators.
These machines might have looked good enough in a small ad in the back
of a magazine for mail-order, or perhaps even on the store shelf, but in
practice, they certainly didn't hold up nearly as well as Bowmar's
quality-made calculators. Sadly for Bowmar, price is king in the consumer
market, and the characteristics of these cheap calculators generally weren't
realized by the average consumer until well after the sale, and the
"limited warranty" had expired.
To add to the situation, the Japanese had very quickly
tooled up their own extremely efficient and semi-automated manufacturing
lines to create high-quality yet inexpensive handheld calculators in vast
quantities, and proceeded to flood the world market with competition
for Bowmar's US-made calculators at a Bowmar-beating price-points.
An interesting side note is that many of these Japanese-made competitors to
Bowmar's LED-display calculators used vacuum-fluorescent(VF) display tubes
or in some cases, small gas-discharge display modules instead of LED displays.
Primarily this was because the Japanese semiconductor companies took some
time before they were allowed to license LED technology, and then more time
to perfect the ability to mass produce reliable LEDs. Initially, there were
also the import restrictions mentioned above that made it difficult for
the Japanese calculator companies to buy LEDs from US semiconductor companies
(at least legitimately). The VF and gas-discharge displays required
more complex circuitry to drive and required higher operating voltages,
which meant that much of the Japanese competition's calculators were a bit
larger(to accommodate the extra circuitry and generally larger batteries
to get the most run-time possible within the limits of the packaging), and
did not have the on-battery run-time than Bowmar's LED display calculators
The rapid drop in the price of a basic handheld battery-powered calculator
during the latter part of 1974 and into 1975 was devastating. In mid-1974,
a typical price for such a calculator was around $179.
By the end of the year, prices had dropped to the point where some of the
really cheaply-made calculators with limited features (perhaps fewer digits
in the display, lack of a battery charge-saving automatic display shutoff
feature, smaller-capacity batteries, or non-rechargeable batteries)
were marketed for as low as $15.
This break-neck
rate of changed proved to be too much for Bowmar to adapt to in such a short
time, and by the late part of 1974, the company was deep in financial
trouble, with losses and debt accumulating at a horrific rate.
The company had an after-tax loss of $20-million for fiscal year '74 (ended
Sept. 31st), and had been unable to obtain waivers from lenders on defaulted
payments on existing loans totalling some $35-million.
Hastening the situation, on Friday, February 7, 1975, New York Life
Insurance Co. filed a $16-Million suit against Bowmar for defaulting
on a loan they had with the organization. With this action on top of the
severe losses, on Monday, February 10, 1975, Bowmar Instruments Corp.
formally filed for Chapter XI bankruptcy protection to allow the company
to continue to operate while it worked with creditors to try to renegotiate
the terms of existing debt. At the same time, the company announced the
resignation of its founder, CEO, and president, Edward White, and its CFO,
William Meazell, with both gentlemen continuing to server as consultants to the company.
The news clip above, while a bit out of date due to magazine publication
leadtimes, outlines the situation.
