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I've always wondered how Timex ended up as the US partner on this project. Was it a reasonable shift to go from digital watches to small computers?

Timex had the contact to assemble the ZX81 in Dundee (Scotland). I imagine that that made them the obvious choice for a US expansion.

Some background here [1] - this whole website has lots of nuggets of info if you’re interested in the early Timex / Sinclair machines.

Additional info, because Timex had a factory in Portugal, the 2048 and 2068 models were everywhere, and extension cartidges as well.

A 2068 ended up being my first "speccy".

Do you happen to remember where in Portugal? Because north of Coimbra in Cantanhede is a Spectrum Museum.

Don't recall, I think it was somewhere on the Lisbon metrolitan area.

Not only that, Timex wasn't making anything electronic at the time. Their first digital watch didn't come out until the mid-80s:

Even the sibling comment's link explains:

...Timex, a company which had little experience in the assembly of electronic equipment.