Colt has had a bad business plan for years. They lost out on 1911 sales and AR while other companies built on them. They continue to do same things. The AR they were building to look like a m16, with hopes of cashing in on Vietnam Vets was a failure. Might have been $2300 price tag or guys finding out they were farming them out. Colt was under UAWA I don't know if that has anything to do with it but their prices were high once the 1911 & AR market kicked off.
The $2300 price tag had a lot to do with it.
I was issued an M16A1 and I liked it. I liked it later as a patrol rifle (except for being too long for a vehicle weapon rack it was a near perfect choice).
When the police department surplussed its M16A1 and SP1 upper halves in favor of M4 upper halves, I bought one of each and made M16 and M16A1 clones using NDS retro lowers - at the time you didn't have to wait 8-9 months to get one and total costs for the builds using the surplussed uppers was around $700 each.
I also built a XM177E1 clone while I was at it, although I used a 12" heavy profile barrel for better accuracy and better stability in longer strings of fire.
On the other hand, now you can buy A1, E1, 601 and XM177E1 clones from brownells for $1000, less than half the price of a Colt clone, and a pony on the side just isn't worth the extra $1300.
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1911 wise, Colt has had problems since WWII. After WWII, the market was flooded with 1911s that found their way back home with GIs as well as from former allies, so the civilian market was pretty limited and the US military just didn't need anymore.
By the time the surplus 1911 market dried up enough to support a decent civilian market for new commercial 1911s (about 1970), Colt had competition that increased over time as the competition was far more agile and adaptable than Colt and they've been losing market share ever since. Commercially, they have neither the high or low end markets and they are not very competitive in the middle.
Similarly, by the time the US military had worn out the frames on their 1911s (late 1970s) Colt had ample competition for it's replacement. Their Model 1971 didn't do well against the S&W 39 and 59 in the commercial market and lost to the Beretta 92 in the M9 trials. Commercially, they never had enough interest to take the Model 1971 past the prototype and demonstrator stage.
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Colt currently sells a large number of 1911 variants, but they've still never managed to field a decent double action pistol. The Model 1971 was just their first failure and by no means their largest failure.
Their "Series 90" Double Eagle were manufactured from 1989 to 1997, but they never really hit the mark. They were still 1911 based and in particular used the single stack 1911 magazines, which was a non starter in a full or commander sized DA semi-auto in 9mm or .38 Super.
The Colt 2000 was even worse. It came in both aluminum alloy and polymer frame versions and offered a 15 round double stack magazine. But it was homely, unreliable and inaccurate. It also wasn't actually made by Colt. The parts were outsourced and only assembled by Colt in their West Hartford plant. A 1993 safety recall pretty well killed its already flagging reputation and it died a quick death, being produced from 1992-1994. It was a massive failure for Colt - and embarrassing to boot.
