The 8-bit era (1980-1984)
Time Magazine: January 1983
The star of the personal computer was rising. For 1982, Time Magazine featured a generic version as "Machine of the Year," the one and only occasion a nonhuman has won that award. By this time, many new firms had joined the fight, releasing the third generation of machines. Most of these used the 6502 CPU, because of its excellent bang-for-the-buck ratio.
Commodore, realizing that the PET was running out of gas, started a number of new 8-bit computer projects based around their 6502 and custom chips developed in-house by MOS Technologies. One of them, the VIC-20, named after the Video Interface Chip that ran its graphics, was enormously successful. Despite limitations in the VIC chip that could only display 22 columns of text, the colorful and inexpensive computer sold 600,000 units in 1982.
But the big winner for Commodore was yet to come. Rushed into production by shoehorning components into the VIC-20 case, the Commodore 64 made its debut in late 1982 for US$595 with a full 64KB of RAM, the maximum directly addressable by 8-bit CPUs. At the time, computers with that much RAM cost at least three times as much. By integrating the full 64KB of RAM as part of the standard model, the C-64 enabled software developers to write and port stunning high-resolution games to the platform. An improved VIC chip allowed not only 40 column text but supported sprites, making it easier to create fast-moving, flicker-free game graphics. In addition, a multifrequency synthesized sound chip (the legendary SID) gave the small machine a sweeter voice than any other machine of its time. Sales of this new computer took off, reaching a staggering 2 million units in 1983.
Commodore VIC-20, top. Commodore 64, bottom
This incredible volume, unheard of in the personal computer industry before (and it would still be a respectable figure for a new computer model today!) allowed Commodore to get its final revenge on Texas Instruments. A price war which left the C-64 selling for as little as US$199 caused TI to panic and remove its own computer, the TI-99/4A, from the market.
The Atari 400 and 800
Atari, flushed with the success of PONG and its 2600 games console, released the 400 and 800 series of computers in 1979. The 400 was essentially a cheaper version of the 800 with less memory and an awkward "membrane" keyboard. Designer Jay Miner had fitted these machines with impressive technology, including a custom blitter chip that could blast large sections of graphics on the screen without involving the CPU. The 400/800 could play games, like Frogger, that were indistinguishable from the arcade versions. However, Atari kept most of the details about its hardware secret in order to try and give an advantage to its in-house software developers. This limited the long-term success of the platform, which peaked at 600,000 units in 1982 and went steadily downhill.
The Atari 800 could have been much more, were it not for an accident of fate. Mighty IBM, the 800-pound gorilla of the computer industry, was starting to worry about being left behind in this new market, which had emerged at dizzying speeds.
"The worry was that we were losing the hearts and minds," IBM executive Jack Sams reminisced. "So the order came down from on high: 'Give me a machine to win back the hearts and minds.'"
At first, IBM thought about rebranding an existing computer, and had selected the Atari 800. However, after a visit to Atari headquarters, where IBM businessmen were literally put in a box and run through the assembly line by unorthodox and sometimes stoned Atari employees, the computing giant decided they would rather build their own computer.
To gain an advantage over existing personal computer models, IBM decided to use the new Intel 8088 CPU, which had a 16-bit memory model making it capable of directly addressing 1MB of memory (although unlike the fully 16-bit 8086, the 8088 chip saved money by being 8-bit externally). Bill Gates, in negotiations at the time for delivering BASIC for this new machine, was tremendously excited about the potential for a 16-bit CPU, and to this day claims that his input "tipped the balance" in favor of this chip.
Because the personal computer market was growing so rapidly, a rogue IBM design group in Boca Raton, Florida was given the go-ahead to design and build the new computer in less than a year. This necessitated a few shortcuts in the design, which unlike most IBM computers used primarily off-the-shelf chips. Even the operating system was contracted out to another company. Originally it was meant to be Digital Research, maker of the popular CP/M operating system for 8-bit computers. However, when DR took its time signing IBM's non-disclosure agreements, Microsoft seized its chance and won a deal to provide the operating system instead. A combination of off-the-shelf hardware and an operating system available from a third party made the rise of 100% compatible IBM PC clones possible, once the ROM BIOS of the PC had been successfully reverse-engineered. Compaq was the first company to do so, in 1982, but many others followed.
The original IBM PC, Model 5150. 5150 is also a police code for a severely disturbed person.
The IBM PC was released in late 1981 and retailed for US$2880, with 64k of RAM and a monitor. Despite the popularity of the IBM brand name, sales were initially sluggish, but picked up dramatically in the following year. The PC's own version of the killer app, the multi-function spreadsheet Lotus 1-2-3, drove many sales. By 1984 the PC and its innumerable clones were selling 2 million units a year, nearly as many as the Commodore 64 and eclipsing older machines like the Apple ][. Many personal computer companies saw the PC as a threat. Their answer was to try and beat the giant with superior technology. It almost worked.
Personal computer marketshare
during the 8-bit era