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It evolved from the need to have an intermediate level guitar between their popular student model guitars, the Musicmaster and Duo Sonic and the more "professional" models of the Telecaster, Jaguar, et al.
The body design was reminiscent of the Musicmaster and Duo Sonic but had the addition of an offset body similar to a Jaguar.
The Mustang of this period was a slab body with no contours made of either poplar or mahogany.
The neck was maple with a rosewood fretboard and the fingerdots on the fretboard were clay.
No longer would Fender/CBS continue to use the Kluson tuner and would replace it with the F-tuner (aka "F-keys"), larger headstocks would now crown the Mustang and the "L" series of serial number plates would now begin with an "F." In May 1969, Fender introduced the Competition Series Mustang.
Sometime in 1970, Fender discontinued the regular Mustang and continued to produce the Competition Mustang.
In this same year, the neck dating was discontinued and a completely, and more confusing, method of dating was adopted. In 1972, month unknown, the Competition Mustang ceased to be produced.
One-piece maple necks are also now available as an option.
1977 saw the introduction of the antigua mustang and serial numbers were moved to the headstock.