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Many of the most popular personal computers and video game consoles of the 1970s and 1980s, including those made by Commodore, Apple, and Atari, used the 6502 CPU (or some close relative, such as the 6507 or 6510). These processors were manufactured by MOS Technology, a company that was owned and operated by Commodore from 1976 to 1994.

I am curious as to why Commodore deigned to sell CPUs to its very fiercest competitors. For example, in the midst of the intense sales rivalry between the Commodore 64, the Apple II, and the Atari XL, would it not have made better business sense for Commodore to take its microprocessors off the market, pulling the rug out from under its competitors and driving consumers to its own computers?

I can think of a number of possible explanations. For example, perhaps Commodore was making more money off its 65xx sales to Apple and Atari than it was losing to them in the home computer wars. Or maybe Apple and Atari had sales agreements with MOS Technology that predated its acquisition by Commodore and that couldn't be renegotiated. Or maybe Commodore was convinced that its competitors could quickly replace their MOS chips with clones. I'm not sure which of these explanations, if any, may be correct. Is there any documented evidence one way or another?

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    Intel is the world's largest CPU manufacturer today. They are a mid-to-low range mainboard and even barebone system vendor as well. Still they consider selling their CPUs to other vendors. – tofro Nov 10 '17 at 14:42
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    How confident are we that Commodore considered Apple (PET introductory price: $595 including tape drive and monitor, Apple II introductory price: $1,298 no tape drive or monitor) or Atari (the Atari 400 was $599.99 at introduction without tape drive or monitor, but Atari's main business was always the 2600) to be competitors? It might just have been a matter of being able additionally to obtain revenue from markets where Commodore didn't want to make the whole machine and then, later, if he didn't sell the 6502 to Tangerine, Acorn et al, they'd just spend the money on a Z80. – Tommy Nov 10 '17 at 15:00
  • @Tommy: We can be very confident of it. The three companies took out an awful lot of advertisements comparing their computers to each other, as well as to those of IBM (especially the lower-end PCjr). Leaf through practically any home computing magazine from the early 1980s, or try some Web searches for keywords like "commodore apple ad". Also, after leaving Commodore for Atari, Jack Tramiel also gave plenty of interviews telling people why they should buy Atari over Commodore. – Psychonaut Nov 10 '17 at 15:42
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    @Psychonaut in that case, I think this is really the same thing as e.g. Samsung's treatment of Apple. Samsung talks up Apple as a competitor because it helps with branding — it's a shorthand way to explain the type of device Samsung sells in that segment, and a way to pump up its base — but a more rational description of the relationship between the two would be that Apple is a customer, and that Samsung does not seriously predicate its business plans on taking customers from Apple. – Tommy Nov 10 '17 at 19:37
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    If you're interested in Commodore, it's worth reading about MOS and other companies as well. Let me recommend you a book "On the Edge: The Spectacular Rise and Fall of Commodore", free chapters are available online, and I found it really interesting to hear how the things were back then when it all started (well, not exactly, but anyways, I don't regret wasting few hours on reading that) – quetzalcoatl Nov 10 '17 at 20:46
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The 6502 was designed and manufactured before Commodore bought MOS Technology, the creator of the 6502. MOS Technology didn't originally plan to build computers. They wanted to sell the 6502 to companies who wanted to build computers.

Back then, anyone planning to bring an electronic device to the market wouldn't choose any chip that didn't have multiple manufacturers, in order to ensure that if one manufacturer went under or decided not to sell to them, they could easily go to another manufacturer, so MOS Technology licensed the 6502 design to Synertek and Rockwell. This is simply how business was done in the chip industry back then.

Atari bought their 6502 from MOS Technology. Steve Wozniak bought his first 6502 directly from MOS Technology but I believe they used other manufacturers later on.

MOS Technology would certainly make more money licensing the design to other manufacturers to increase the confidence of system designers to choose the 6502.

I do not know whether canceling the Synertek and Rockwell licenses later on would have been legally possible, or what the repercussions might have been if they did so.

Later, after Commodore bought MOS Technology, Chuck Peddle, one of the designers of the 6502, convinced Jack Tramiel that computers were the future. So they built the Commodore PET.

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    If anyone's interested in a bit of history of Commodore, it's worth reading about MOS and other companies as well. Let me recommend you a book "On the Edge: The Spectacular Rise and Fall of Commodore", free chapters are available online, and I found it really interesting to hear how the things were back then when it all started (well, not exactly, but anyways, I don't regret wasting few hours on reading that) – quetzalcoatl Nov 10 '17 at 20:47
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    @Tim Maybe two remarks: For one, MOS didn't realy envision the 6500 as CPU for computers, but as part of controll equipment. With its features the 6500 was perfect for Rockwell. And second, as first licencee, Rockwell did, as usual for their business, demanded that there are at least two other manufacturers as available. For a strict chip manufacturer such a request may seam strange, but chip business was at Rockwell primary ment to support their main business with a reliabble source of parts. And second source is needed for uninterrupted supply in case of production problems. – Raffzahn Nov 11 '17 at 8:26
  • @Tim, as you said, MOS never intended to build a general purpose computer. All tehy did was the KIM as a demonstrator. That it became one of the most sold kits ever is a different story. And yes, Commodore bought MOS not for the 6502, but for its calculator chips. The idea was to bring down production cost of Commodores main business of desktop and pocket calculators in competition with National. Reading the stories, it seams as if Tramiel gabe Peddle a hard time until he agreed to the PET. – Raffzahn Nov 11 '17 at 8:30
  • All three answers posted so far are very good (and agree with each other to a large extent), and if I could accept them all I would. But since I can't, I will just accept this one, which was the first to be posted and the most detailed. – Psychonaut Apr 3 '18 at 10:18
  • Atari also used Synertek versions. There's some details on their dealings in one of the Antic podcasts, the one with Al Alcorn. – Maury Markowitz Jan 22 at 15:46
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The 6502 has been used in huge volumes in markets that commodore never cared about competing in much - terminals for large-scale professional computing, printers and plotters (which they mostly bought in from OEMs if sold with their own computers), embedded solutions, test and industrial and scientific equipment, arcade machines ... - just as other 8 bit CPUs of and in that era. Whatever was too complex for an 8051 or TMS1000 to do, was usually done with a Z80, 8085, 6800, or 6502. Computer controlled equipment was likely a bigger market than end-user computers. Not selling your chips via generic distribution channels would have lost some of that market to other silicon vendors that did so...

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    Also, taking design wins away from the 6800 platform might have been a substantial motivator, given there was IIRC very bad blood between Mostek and Motorola at the time because of a 6502 predecessor which Motorola found too close to the 6800 and got off the market with lawyers... – rackandboneman Nov 12 '17 at 14:49
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    You refer to the 6501, the whole issue of which is a bit of a joke. The 6501 was completely incompatible with the 6800, but it used the same pinouts so you could use existing 6800 test equipment with it. Moto sued, and should have lost, but the fight wasn't worth while. The 6502 is exactly the same inside, they simply moved some of the pins around. – Maury Markowitz May 14 '18 at 15:38
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Commodore thought they would have such high volumes that they needed a second source because MOS Technology might not be able to reliably fab enough. Semiconductor process technology was not as reliable in those days, and manufacturing yields from any particular fab line could vary drastically, cutting chip supplies. So Commodore licensed the 6502 instruction set and logic design to Synertek. Apple and Atari used Synertek (and possibly Rockwell) chips, which was now outside Commodore's control.

  • Acorn used Synertek too. It'd be interesting to know whether any other machines used MOS 6502s; if not then it's possible that Commodore didn't sell CPUs to its competitors. Though MOS was still intended to be a separate business per the versions of events that the Vic-20 was assembled around the VIC only when nobody else wanted it. – Tommy Nov 10 '17 at 17:55
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    As I mentioned in my answer above, Atari got the 6502 for the early Atari 400/800 computers from MOS Technology. It was customized and called the 6502B. Later 400/800, PAL, and XL and XE systems used 'Sally' or the 6502C. It was also used in the Atari 5200 and 7800. – Tim Locke Apr 3 '18 at 14:14
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Aside from legal and contractual obligations that Commodore had acquired with MOS Technology and very probably had to continue:

Compare the Commodore Computers with their 6502 to another Computer that used a CPU that never really took off in the Home Computer Market like the TI 99/4A and its TMS9900: One of the reasons the TI99 wasn't so successful was it didn't have a well-known CPU.

In times when nobody expected (or could expect) compatibility between various vendor's machines, an at least common and well-known CPU with a certain market positioning was a much stronger selling point for a computer than we might assume today. Computers that didn't feature a relatively well-known or exotic CPU commonly only reached pretty marginal sales, so creating a high market penetration for the 6502 CPU actually was a strong argument for Commodores own computers. Examples that did not so well are the TI99, the Thomson range mainly based on the 6809, or the Dragon.

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Aside from the licensing, computer manufacturers have always had a "nuclear option" of asking another CPU maker to make an enhanced 6502 clone.

Because of the Z-80

A different manufacturer (Zilog) took an established design (the 8080) from a different company (Intel) and made a new processor that runs all its same instructions the same ways, but also had a greatly expanded architecture.

Think about what that means for MOS.

Nothing would prevent another manufacturer with no aspirations to the home PC business (for instance, Motorola) from producing a new CPU which honored the 6502 command set, yet extended it in a substantial and constructive way. If you know the 6502 address map, you know it has lots of holes, including places where the map would make you expect an instruction to be.

The new chip could also do housekeeping functions, such as refreshing dynamic RAM (as the Z80 does) or build in functions favorable to gaming like "wait for horizontal blank" or minimal bit-blitting. Lots of opportunity to optimize a 6502 for PC use.

However, the Z-80 chip had a dramatically different pinout than the 8080. For instance Digital Group's systems had a changeable CPU board, and their Z80 CPU board looks nothing like the 8080 board. Could a competitor possibly make their 6502 clone the same physical pinout as the 6502 without getting in trouble? Yes it could...

Because of the 6800

When MOS laid out the 6502 pinout, they were not random. They chose the same basic pinout as Motorola's 6800. As a result, they didn't need to sell 6502 prototyping boards, you could easily adapt 6800 boards. It was also an enticement for PC and embedded system makers to switch CPUs. Digital Group's 6502 CPU board was one and the same as their 6800 board, the differences were trivial enough the board could be jumpered for one or the other.

So MOS was in no position whatsoever to complain if a competitor made their clone electrically compatible with the 6502. Especially if it was Motorola.

So with the market threat out there of someone usurping the 6502's market share, they didn't really have any option to make it proprietary. I am surprised they didn't do the converse, make a proprietary, enhanced version specifically for Commodore use.

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    The second section of this answer is substantially inaccurate. The 6501 was somewhat pinout-compatible with the 6800, making it the subject of a lawsuit by Motorola. The 6502 used a completely different pinout. – duskwuff Jan 19 at 5:22
  • @duskwuff i don't mean to be rude, but that is not true. 6800 per wikipedia. 6502 jibes with my recollection – Harper Jan 19 at 6:05
  • The pinout isn't radically different. It's just different enough to not be a drop-in replacement. The 6800 and 6501 used a two-phase external clock, whereas the 6502 could generate both phases itself, or could even generate its own clock with an external crystal. – duskwuff Jan 19 at 6:33

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