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Chapter 5 - Data Communications: Market Competition 1969-1972

5.11 ADS Falls on Hard Times: 1971-1972

Unfortunately, the same could not be said for ADS as the company struggled unsuccessfully to perfect its automatically equalizing 4800 bps modem. Hit simultaneously with plummeting multiplexer sales due to a weakening time-sharing market, ADS reeled under a succession of bad results turning worse. By the September 1971 Board of Directors meeting, everyone expected management changes. Rockwell, asserting its ownership rights, replaced the President named the prior year with another Rockwell executive and fired co-founder Schaaf. The discouraging results from ADS did not deter Rockwell in September 1971 from acquiring controlling interest of Collins Radio, an organization that, in theory, competed with ADS and had estimated sales of modems and multiplexers of $2 million in 1972.

As 1971 gave way to 1972 and one month ground into the next with no pick-up in activity, ADS sank ever more deeply into the ranks of the also rans. After the habitual ax-wielding September Board meeting, Rockwell executives had had it. They fired Wilkes, cut the company back to a bare minimum, and tasked Norred with selling the shell of a company to whomever for whatever. ADS, the first true star of data communications, had overreached by trying to do too many things without sufficient capital and management and engineering.