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Home , BASIC interpreter, Home computer, IBM Personal Computer, Mainframe computer, Microcomputer, Minicomputer

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Center for Information Systems Research

Massachusetts Institute of Technology Sloan School of Management 77 Massachusetts Avenue Cambridge, Massachusetts, 02139

PERSONAL

Hoo-min D. Toong Amar Gupta

December 1982

CISR WP #99

Sloan WP //1409-83

Reprinted by permission Scientific American

Center for Information Systems Research

Sloan School of Management Massachusetts Institute of Technology

3129

Personal Computers

by Hoo-min D. Toong and Amar Gupta

SCIENTIFIC AMERICAN DECEMBER 1982

VOL. 247, NO. 6 PR 86- 107

PUBLISHED BY W. H. FREEMAN AND COMPANY 660 MARKET STREET, SAN FRANCISCO, 94104

Copyright 1982 by Scientific American. Inc All rights reserved Printed in the USA No part of this offprint may be reproduced by any mechanical, photo graphic or electronic process, or in the form of a phonographic recording, nor may it be stored in a retrieval system, transmitted or otherwise copied for public or private use without written permission of the publisher. The trademark and tradename "SCIENTIFIC AMERICAN" and the distinctive logo- type pertaining thereto are the sole of and are registered under the name of. and are used herein under license from. Scientific American, Inc . '

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1 III I—M^3.i. Personal Computers

An account of their hardware, , applications and current

proliferation. By making computers accessible to untrained people

they promise to bring about the long-heralded revolution

by Hoo-min D. Toong and Amar Gupta

the aircraft industry had evolved as years. In the same period the cost, the for a department or a working group If spectacularly as the computer in- energy consumption and the size of within such an organization. Today the dustry over the past 25 years, a Boe- computers of comparable power have can serve as a work ing 767 would cost $500 today, and it decreased by a factor of 10,000. station for the individual. Moreover, would circle the globe in 20 minutes on The result is the advent of the person- just as it has become financially feasible five gallons of fuel. Such performance al computer, which for less than $500 to provide a computer for the individual would represent a rough analogue of the can put at the disposal of an individual worker, so also technical developments reduction in cost, the increase in speed about the same power have made the interface between man of operation and the decrease in energy as a did in the ear- and machine increasingly "friendly," so consumption of computers. The cost of ly 1960's and as a did in that a wide array of computer functions computer logic devices is falling at the the early 1970"s. Twenty years ago the are now accessible to people with no rate of 25 percent per year and the cost cost of a computer could be justified technical background. of at the rate of 40 only if the machine met the needs of a The first personal computer was put percent per year. Computational speed large organization. The on the market in 1975. By the end of has increased by a factor of 200 in 25 introduced in the 1970"s are appropriate this year more than a million personal computers will be in service in the U.S. CASSETTE INPUT/OUTPUT KEYBOARD INPUT OUTPUT alone. In 1981 total sales of personal computers and their accessories in the U.S. amounted to $2.2 billion; sales are expected to surpass $6 billion in 1985. There has been talk of a "computer rev- ' olution" ever since the electronics in- dustry learned in the late 1950's to in- SLOTS FOR AUXILIARY- EXPANSION PROCESSOR SLOT miniature electronic circuits on a MODULES chip of . What has been witnessed CLOCK CAPACITOR so far has been a steady, albeit remark- , CLOCK OSCILLATOR ably speedy, evolution. With the pro- D SYSTEM-CONFIGURATION liferation of personal computers, how- SWITCHES ever, the way may indeed be open for a READ-ONLY true revolution in how business is con- MEMORY (ROM) TIMER INPUT/OUTPUT ducted, in how people organize their PORT personal affairs and perhaps even in how EXPANSION people think. DIRECT MEMORY SOCKET ACCESS Anatomy of a Computer

D D ODD DDDDD D D A computer is essentially a machine that receives, stores, manipulates and RANDOM- TIME DELAYS. D DDDD D communicates information. It does so ACCESS DDDDDDD DEVICE DECODERS MEMORY (RAM) AND OTHER SUPPORT by breaking a task down into logical op- CIRCUITRY D DDDDDDDD DDDDDDD erations that can be carried out on bina- ry numbers—strings of 0"s and Ts—and SPEAKER doing hundreds of thousands or mil- OUTPUT- D°DDDDD lions of such operations per second. At the heart of the computer is the central MAIN CIRCUIT BOARD of the IBM Personal Computer is shown in the photograph on the processing unit, which performs the ba- opposite and its major elements are identified in the drawing above. The size of the board sic arithmetic and logic functions and is 8 /2 by 12 inches. To it are attached a large number of silicon chips carrying integrated cir- supervises the operation of the entire cuits; each chip is about a quarter of an inch square and is encased in a rectangular plastic pack- system. In a personal computer the cen- age fitted with electrodes. The chips and elements such as resistors and capacitors are intercon- tral processing is nected by conductors printed on the board. The microprocessor, the 16-bit 8088 made by the unit a microprocessor: Intel Corporation, has 20,000 and operates at a frequency of almost five million cy- a single on a chip of cles per second. "System programs" are stored permanently in the read-only memory (ROM); silicon that is typically about a quar- random-access memory (RAM) stores programs and data that change from time to time. ter of an inch on a side. Other silicon chips constitute the computer's primary The core of the software is an "operat- define a personal computer as a system memory, whe _ both instructions and ing system" that controls the computer's that has all the following characteristics: data can be stored. Still other chips gov- operations and manages the How of in- 1. The price of a complete system is ern the input and oiUput of data and car- formation. The medi- less than $5,()()(). ry out control operations. The chios ates between the machine and the hu- 2. The system either includes or can are mounted on a heavy plastic circuit man operator and between the machine be linked to secondary memory in the board; a printed pattern of conductors and an "application" program that en- form of cassette tapes or disks. interconnects the chips and supplies ables the computer to perform a specif- ?•. The microprocessor can support a them with power. The board is enclosed ic task: solving a differential equation, primary-memory capacity of 64 kilo- in a cabinet; in some instances there are calculating a payroll or editing a let- or more. (A kilobyte is equal to several boards. ter. Programs are ordinarily stored in 2'0, or 1,024, bytes. A is a string of Information is entered into the com- secondary-memory and are read eight bits, or binary digits. One byte can puter by means of a keyboard or is into the primary memory as they are represent one alphabetic or transferred into it from secondary stor- needed for a particular application. one or two decimal digits. A 64-kilobyte age on magnetic tapes or disks. The memory can store 65,536 characters, or computer's output is displayed on a The Personal Computer some l(),0()() words of English text.) screen, either the computer's own cath- 4. The computer can handle at least ode-ray tube, called a monitor, or an A personal computer is a small com- one high-level language, such as Basic, ordinary screen. The output puter based on a microprocessor; it is a or Cobol. In a language of this can also be printed on paper by a sep . Not all microcomput- kind instructions can be formulated at a arate unit. The device called ers, however, are personal computers. A fairly high level of abstraction and with- a (for modulator-demodulator) microcomputer can be dedicated to out taking into account the detailed op- can be attached to convert the comput- a single task such as controlling a ma- erations of the hardware. er's digital signals into signals for trans- chine tool or metering the injection of 5. The operating system facilitates an mission over telephone lines. fuel into an automobile engine; it can interactive dialogue; the computer re- The chips and other electronic ele- be a , a game or sponds immediately (or at least quick- ments and the various devic- a "" that is not quite ly) to the user's actions and requests. es constitute the computer's hardware. a computer. A personal computer is 6. Distribution is largely through

The hardware can do nothing by itself; it something different: u stand-alone com- mass-marketing channels, with empha- requires the array of programs, or in- puter that puts a wide array of capabili- sis on sales to people who have not structions, collectively called software. ties at the disposal of an individual. We worked with a computer before.

TELEPHONE

DISPLAY

MICROPROCESSOR

ARITHMETIC DISPLAY I AND LOGIC MEMORY ' PRIMARY MEMORY DISK SERIAL PARALLEL UNIT CONTROLLER INTERFACE INTERFACE BUS REGISTERS CONTROL

INTERNAL CONTROL

/v

CLOCK KEYBOARD INTERFACE

DISK DRIVE KEYBOARD PRINTER

HARDWARE OF A PERSONAL COMPUTER includes devices which consists of memory chips, holds programs and for proccssiii); and storing information and for coniniuiiicating with data currently in use: it is a random-access memory, meaning that the user and >vith other electronic devices. \ set of parallel conduc- the content of any can he examined or changed independently of tors called a bus Uiilor) connects the main components. The process- all the other cells. generally has a larger capacity than ing unit, which generally includes not only the microprocessor chip it- the primary memory, but it is slower and Us information is recovered self but also \arious auxiliary chips, carries out essentially all calcula- in larger lilocks. The interfaces the computer to other de- tions and controls the entire system. Information can be entered into vices, such as a printer or a modem (which gives access to other com- the system through a keyboard. Pressing a Itey generates a coded sig- puters through the telephone system). In a serial interface informa- nal unique to that key; the code is stored in the display memory and tion is transferred one bit at a time: in a parallel interface multiple so appears on the cathode-ray-tube display. The primary memory. conductors carry several bits (in most instances eight) at a time. kilobits bits); now sever- 7. The system is flexible enough to ac- read/write memory: new information 16 (16,384 cept a wide range of programs serving can be written in and read out as often as al personal computers have 64-kilobit informa- chips, by 1984 the 256-kilobit chip varied appHcations; it is not designed for it is needed. RAM chips store and a single purpose or a single category of tion that is changed from time to time, is expected to be widely available. purchasers. including both programs and data. For Even though the individual memory The definition will surely change as example, a program for a particular ap- chip is an array of bits, information is improved technology makes possible— plication is read into RAM from a sec- generally transferred into and out of pri- and as the marketplace demands—the ondary-storage disk; once the program mary memory in the form of bytes, and inclusion of more memory and of more is in RAM its instructions are avail- the memory capacity of the computer is special hardware and software features able to the microprocessor. A RAM measured in bytes. A typical personal in the basic system. Having defined a chip holds information in a repetitive computer comes with a RAM capacity personal computer, of necessity some- array of microelectronic "cells," each of between 16 and 64 kilobytes, which what arbitrarily, we shall now describe cell storing one bit. The density of com- can be expanded by the addition of extra modules. In general its essential components in some detail. mercially available memory chips, that memory boards, or

is, the number of bits per chip, has in- it is a good rule to buy a system that has at least enough memory to accommo- Microprocessor and Memory creased by a factor of 64 over the past decade, with a resulting 50-fold reduc- date the largest application program Two major determinants of the com- tion in the cost per bit. Five years ago a one expects to execute. Most off-the- putational power of a microprocessor single RAM chip stored no more than shelf program packages carry an indica- are its word size, which governs the "width" of the computer's data path, and the frequency of its electronic clock, UTILITY PROGRAMS COMPILERS. INTERPRETERS APPLICATION PROGRAMS the computer's op- ASSEMBLERS which synchronizes BOOTSTRAP AND WORD PROCESSING in erations. The trend ASSEMBLY Lj^NGUAGES size and a higher is toward a larger word EDITOR BASIC INCOME TAX word size increases, frequency. As the DEBUGGER FORTRAN GAMES can be completed in fewer an operation TRACE PASCAL INVENTORY SYSTEM machine cycles; as the frequency in- ETC, C MAILING LIST creases, there are more cycles per sec- ADA also ond. In general a larger word size ETC ETC. brings the ability to access a larger vol- ume of memory. The first generation of true personal computers, which came on the market between 1977 and 1981, had eight-bit microprocessors; the most re- FILE MANAGER AND JOB SCHEDULER cently introduced systems have 16-bit ones. Now .^2-bit microprocessor chips are available, and soon they will be in- cluded in complete computer systems. Today an eight-bit chip costs $5, a 16-bit chip costs $50 and a 32-bit chip costs INPUT-OUTPUT MANAGER MEMORY $250. As improved technology lowers MANAGER costs more personal computers will come to have 32-bit processors. Until perhaps 1985. however, a 16-bit word size will probably be standard. As for clock frequency, the trend has been from one megahertz (one million cycles DEVICE DEVICE DEVICE DEVICE DEVICE DRIVER DRIVER DRIVER DRIVER DRIVER per second) a few years ago to 10 mega- hertz or more today. There are two kinds of primary mem- ory: read-only memory (ROM) and random-access memory (RAM). Read- only memory is for information that is "written in" at the factory and is to be stored permanently. It cannot be altered. computer such For a single-application Ik as a word processor the information % MAIN KEYBOARD DISPLAY PRINTER MODEM DISK STORAGE MEMORY in ROM might include the application program. In the case of a versatile per- SOFTWARE OF THE COMPUTER is centered on the operating system (color), a set of pro- sonal computer it would include at least grams that manage the computer's resources, supervise the storage of programs and other in- the most fundamental of the "system formation and coordinate the various tasks. Application programs are those that carry out programs," those that get a computer some function at the user's direction. In principle an application program could be designed to

system, but it would have to include detailed instructions for the allo- going when it is turned on or interpret run without an operating in and on disks and for operating all the pe- a keystroke on the keyboard or cau.se cation of storage space both the primary memory ripheral devices associated with the computer. These tasks are taken over by the operating a file stored in the computer to be print- system. Programs must be in "machine language" (a string of binary digits) in order to be exe- ed. As the cost of ROM drops there has cuted. The necessary translation is done by programs called assemblers, compilers and inter- been a tendency among manufacturers preters. Assemblers and compilers translate an entire program before it is run; interpreters to include system pro- more and more translate each instruction in turn as the program is being run. Various utility programs, which grams in ROM rather than on second- are sometimes considered part of the operating system, can assist the user in writing or running ary-storage media. other programs. A "bootstrap" program, for example, supplies the initial instructions when the Random-access memory is also called computer is first turned on, and a trace program allows the state of the system to be examined. tion of the minimum memory required. moved radially across the spinning disk

The standard medium for secondary to a particular track. The track in turn is storage is the Hoppy disk: a flexible disk divided into a number of sectors, and as of Mylar plastic, now either 5'/, or eight a rule information is written or read one inches in diameter, coated on one side or sector at a time. Depending on the par- both sides with a magnetic material. In- ticular format there are between eight

formation is stored in concentric tracks and 26 sectors per track and each sector of minute magnetized regions; changes holds from 128 to 512 bytes of data. The in the direction of magnetization repre- total storage capacity of a sent binary O's and Ts. The information varies according to the density of the

is written onto the disk and retrieved data stored along a track (as high as

from it by a recording head that is 7,000 bits per inch), the density of the

USERS SYSTEM INSTRUCTION FUNCTION

1 BOOTSTRAP LOADER, RESIDENT IN ROM, LOADS OPERATING SYSTEM

OPERATING SYSTEM LOADS FILE DIRECTORY

OPERATING SYSTEM INDICATES ON MONITOR THAT COMPUTER IS IN SYSTEM MODE

OPERATING SYSTEM READS FILE DIRECTORY TO CHECK AVAILABILITY AND SIZE OF BASIC

OPERATING SYSTEM CHECKS TO SEE IF SPACE IS AVAILABLE IN PRIMARY MEMORY (YES)

OPERATING SYSTEM CAUSES BASIC INTERPRETER TO BE LOADED

COMPUTER IS IN BASIC MODE AND THAT FACT IS DISPLAYED ON MONITOR

BASIC INTERPRETER DECODES INSTRUCTION

INSTRUCTION REQUIRES ACCESS TO DISK, BASIC INTERPRETER REQUESTS ASSISTANCE

OPERATING SYSTEM CHECKS AVAILABILITY OF FILE AND OF SPACE IN PRIMARY MEMORY

FILE IS LOADED INTO PRIMARY MEMORY

CONTROL IS RESTORED TO BASIC INTERPRETER AND FACT IS DISPLAYED ON MONITOR

FUNCTIONS OF THE OPERATING SYSTEM arc illustrated by the successive events re- quired to load an application program. Switching the computer on (/) actuates a bootstrap pro- gram that loads the operating system into the primary memory. The operating system trans- fen) a file directory from the disk memory to the primary memory; in the file directory is list- ed the address, or position, of every program and data file recorded on the disk. In response to the next instruction (J) the operating system finds the Basic interpreter on the disk and,

after making certain there is enough space for it, loads it into the primarv memorj; the user is notified that the interpreter is ready. (Some personal computers perform step -' automatically

as part of the s>vitching-on sequence.) The operating system is called on to load the application program itself (.?). Now. with the interpreter again in control, the application program can be run. Output will be new data file in primary memory, which can be transferred to disk storage. CO o—1 Q Ou. U3

CO UJ < CO BUSINESS O

1982 1984 1985

PERSONAL-COMPUTER MARKET is expected to continue its personal computers, as estimated and as projected by the authors, for exponential growth. The bars give the value of each year's sales of the market's four segments: business, home, science and education.

in color, can be displayed clearly only puter spin the wheel and actuate a ham- If all these tasks had to be done under on a monitor. mer that drives the proper arm against the direct supervision of the user, the For many purposes a printed copy the inking ribbon. storage of information in a computer of the computer's output is desirable. would not be worth the trouble. Actual- There are a number of different kinds Software ly the entire procedure can be handled of printer, which vary widely in price, by the operating system; the user merely speed and the quality of the text they Although the hardware of a computer issues a single command, such as "Save turn out. Thermal printers, which cost ultimately determines its capacity for file." When the information in the file is less than $500, burn an image into a spe- storing and processing information, the needed again, an analogous command cial paper at a rate of some 50 charac- user seldom has occasion to deal with (perhaps "Load file") begins a sequence ters per second. Dot- printers cost the hardware directly. A hierarchy of of events in which the operating system between $400 and $1,500 and can be programs, which together constitute the recovers the file from the disk and re- very fast: as many as 200 characters software of the computer, intervenes be- stores it to the primary memory. per second. An array of from five to 18 tween the user and the hardware. In most instances an application pro- tiny wires is swept across the paper. Sig- The part of the software that is most gram is written to be executed in con- nals from the computer drive the wires closely associated with the hardware is junction with a particular operating - against an inked ribbon, leaving a pat- the operating system. To understand the tem. On the other hand, there may be tern of dots on the paper. The quality kind of tasks done by the operating sys- versions of an operating system for sev- of the characters thus formed depends tem, consider the sequence of steps that eral different computers. Ideally, then, largely on the size of the dot matrix must be taken to transfer a file of data the same application program could available for each character; the array from the primary memory to disk stor- be run on various computers, provided of dots is commonly either five by seven age. It is first necessary to make cer- they all had the same operating system; or seven by nine. With suitable control tain there is enough space available on in practice some modification is often programs and enough memory capac- the disk to hold the entire file. Other necessary. ity the dot-matrix printer can gener- files rfiight have to be deleted in order The microprocessor recognizes only a ate graphic images in black and white to assemble enough contiguous blank limited repertory of instructions, each or in color. sectors. For the transfer itself sequen- of which must be presented as a pattern Most thermal and dot-matrix printers tial portions of the file must be called of binary digits. For example, one pat- generate text that is readable but hardl> up from the primary memory and com- tern might tell the processor to load a elegant. "Letter quality" printing calls bined with "housekeeping" information value from the primary memory into for more expensive devices more closely to form a block of data that will exactly the internal register called an accumula- related to a . One such device fill a sector. Each block must be as- tor and another pattern might tell the is the daisy-wheel printer, which costs at signed a sector address and transmitted machine to add two numbers already least $750 and can print up to 55 char- to the disk. Numbers called checksums present in the . It is possible acters per second. The printing head is that allow errors in storage or transmis- to write a program in this "machine lan- a rotating hub with 96 radial arms or sion to be detected and sometimes cor- guage," but the process is tedious and more, each arm carrying a letter or other rected must be calculated. Finally, some likely to result in many errors. character. As the daisy wheel moves record must be kept of where the file of The next-higher level of abstraction is across the paper, signals from the com- information has been stored. an "assembly" language, in which sym- 051.5 on the nature of the problem being ad- Z 3 dressed; the language called Lisp, for example, is favored by many investiga- tors of artificial intelligence. Consider-

05 recent years because it is said to encour- HI . age the writing of programs whose un- < -^ 1976 1978 03 1980 1981 1982 (EST) derlying structure is clear and can be readily understood. OTHERS RADIO SHACK 50 CO Application Programs

3 Application programs are the ones O40 that ultimately determine how elTcctive H a computer is Z in meeting human needs. OUJ For this reason it is likely that the ov. ner oc of a personal computer will eventually invest more in software than in hard- MITS ware. The investment can be made ei- ther by buying programs or by spending <20 IMSAI the substantial amount of time needed to write them. Unless one wants to do intensive LU PROCESS programming the breadth of <5 10 TECHNOLOGY a system's software base (the number I APPLE NIPPON ELECTRIC 05 of applications supported) and its depth OSBORNE (the number of different programs avail- IBM able for each application) should be sig- 1976 1978 1980 1981 1982 in (EST I nificant considerations the selection of hardware. ANNUAL SALES of personal computers have increased 100-fold in six years, more than dou- thriving cottage industry supply- bling in the past year (top). The companies that pioneered in the industry failed to survive its A first years. They were supplanted by companies whose products appeal to wider market (hvllum). ing application programs has evolved. Many programs are highly specialized. There are programs, for example, for bols and words that are more easily re- grams, called interpreters and compil- generating a Federal income-tax return membered replace the patterns of bina- ers, that translate into a or (in conjunction with the necessary in- ry digits. The instruction to load the ac- program written in a higher language. A strumentation) for analyzing thousands cumulator might be represented load.^ program written in an interpreted lan- of blood samples per hour or for de- and the instruction to add the contents guage is stored as a sequence of high- signing a bridge. Other programs have of the accumulator might be simply level commands. When the program is more general applications. Word-proc-

ADD. A program called an assembler run, a second program (the interpreter essing software is a prime example: it recognizes each such mnemonic instruc- itself) translates each command in turn facilitates the writing and editing of

tion and translates it into the corre- into the appropriate sequence of ma- documents of any kind, from letters sponding binary pattern. In some assem- chine-language instructions, which are and memorandums to magazine arti- bly languages an entire sequence of in- executed immediately. With a compiler cles such as this one. structions can be defined and called up the entire translation is completed be- The most popular single program for by name. A program written in assem- fore execution begins. An interpreter personal computers is called

bly language, however, must still specify has the advantage that the result of each and is distributed by VisiCorp. It is an individually each operation to be car- operation can be seen individually. A "electronic worksheet." The program ried out by the processor; furthermore, compiled program, on the other hand, lays out in the computer's memor> and the may also have to keep generally runs much faster since the displays on its screen a table 6.'5 col- track of where in the machine each in- translation into machine language has umns wide and 254 rows deep. The struction and each item of data is stored. already been done. user "scrolls" the worksheet right and A high-level language relieves the Fortran was one of the earliest high- left or up and down to bring dilfercnt

programmer of having to adapt a proce- level languages and is now available in parts of it into view. Each position (that dure to the instruction set of the proces- several versions (or dialects). Fortran is, each intersection of a column and a sor and to take into account the detailed programs are compiled; their main ap- row) on the screen corresponds to a rec- configuration of the hardware. Two plications are in the sciences and math- ord in memory. The user sets up his quantities to be added can simply be giv- ematics. The most widely employed own matrix by assigning to each record en names, such as X and Y. Instead of high-level language for personal com- either a , an item of data or a for- telling the processor where in primary puters is Basic, which was developed mula; the corresponding position on memory to find the values to be added, in the 1960's by workers at Dartmouth the screen displays the assigned label, the programmer specifics the operation College. Basic was originally intended the entered datum or the result of ap- itself, perhaps in the form X + Y. The as an introductory language for students plying the formula.

program, having kept a record of the of , but it is now Consider a simple example. A com- location of the two named variables, employed for applications of all kinds. pany comptroller might enter the label generates a sequence of instructions in Most versions of Basic arc interpreted. Cas/i in the record corresponding to Col-

machine language that causes the val- There are dozens of other high-le\ el lan- umn B. Row 1 (position 51). Reserves ai

ues to be loaded into the accumulator guages that can be executed by a mi- C\ and Tom I at D\. He might then enter and added. crocomputer. The choice of a language $.n)(),()()() at B2, $5()(),()()() at C2 and the There are two broad classes of pro- for a particular program is often based formula -t-B2 + C2 at position 02. The

8 screen will show $8(){),000 at D2. If and for $621 assembled. At the time Equipment Corporation and the Hew- the comptroller changes the 52 entry to the least expensive minicomputer cost lett-Packard Company to the fact that $20i),()(H), the program will reduce the about $6,()()0. their traditional markets might be erod- total displayed at Dl to $7()(),0()(). More- The Altair is no longer made. As a ed by the personal computer; the estab- over, what is entered in records Bl and matter of fact one irony of the personal- lished companies then came into the

CI need not be primary data; it can be a computer industry, whose annual sales field. New companies continue to be at- function of data held in other records. have increased by a factor of 100 in just tracted to the industry. six years, is that pioneering firms such as The personal-computer market can The Industry MITS. the IMSAI Manufacturing Cor- be divided into four segments: business, poration and the home, science and education. The busi- The evolution of the small personal Corporation failed to survive the initial ness segment has already become by far computer followed, perhaps inevitably, phase. Their products were bought pri- the largest one. In 1981 it accounted for from the advent of the microprocessor. marily by hobbyists: people with deep 385,000 unit sales (55 percent of total

It was in 1971 that the Intel Corporation curiosity about computers and in most sales) with a retail value of $1.4 billion succeeded in inscribing all the elements cases with some previous knowledge of (64 percent of the total value). There are of a on a single electronics, who were willing —indeed 14 million businesses in the U.S., even integrated-circuit chip. That first micro- eager—to grapple with the hardware. the smallest of which is a potential processor had only a four-bit word size, The companies that supplanted the pio- buyer of a personal computer. Perhaps but within a year Intel produced an neers and captured a major of the more important, there are some 36 mil- eight-bit processor and in 1974 there market by 1978 were Radio Shack, lion white-collar workers in the U.S., was an improved version, the . Commodore Business Machines and and a large fraction of them may even- Small companies soon combined the Apple Computer Inc. They saw the po- tually be working with a small comput- 8080 with memory chips and other com- tential of a wider market in business er of some kind. ponents to produce the first programma- and in the home; they offered "plug in" The personal computer is currently ble for industrial con- systems that were more accessible to best suited to the needs of small compa- trol and similar specialized applications. people without computer training. The nies and of independent professionals In 1975 a device flexible enough to be success of the second-generation com- such as lawyers and physicians. Larger considered the first commercially avail- panies alerted established mainframe organizations, however, are slowly com- able personal computer was developed manufacturers such as the International ing to the concept of individual com- by MITS, Inc. It was called the Altair Business Machines Corporation and the puter-centered work stations, which 8800, and the basic system sold, pri- and makers can be linked to one another and to cen- marily to hobbyists, for $395 in kit form of minicomputers such as the Digital tral facilities (large memory units and

CIRCUIT BOARD ] 25 10

MICROPROCESSOR I 15 3

RAM I 45 2

2 ROM 1 10

POWER SUPPLY H 50 20

KEYBOARD H 60 J20

RESISTORS. ETC 40 35 I (NOT (NOT FLOPPY-DISK DRIVE INCLUDED) INCLUDED) (NOT DISK-DRIVE (NOT IJ70 INCLUDED) INCLUDED)

LABOR I 50 I 30 TOTAL HARDWARE COSTS 575 235 MARKETING ^3° 120 i J RESEARCH AND DEVELOPMENT ho iso

OVERHEAD. ETC 560 360

TOTAL 560 NONHARDWARE COSTS 780 FULL COST TO MANUFACTURER 1 355 MANUFACTURERS 260 ::nn PROFIT

COST TO DISTRIBUTOR 1,615 995

DISTRIBUTION MARKUPS 785 505

RETAIL PRICE 2.400 1,500 300

RETAIL PRICE of a personal computer reflects the cost to the man- Here these incremental costs have been estimated for three catego-

ufacturer of the hardware components, labor and other nonhard- ries: a relatively high-cost, high-performance personal computer (,-1), a ware costs, the manufacturer's profit and the distributors' markups. middle-level model W) and an inexpensive, low-performance one (C). printers, for example) by local-area net- ceed at his own pace. The ability to work that are currently on sale are based on works [see "The Mechanization of Of- with a computer is coming to be con- the same eight-bit microprocessor. fice Work," by Vincent E. Giuliano; sidered a necessary basic skill and even Radio Shack, which since 1963 has Scientific American, September], Per- some programming ability may soon be been owned by the , sonal computers are already powerful required in many occupations; clearly was a retailer and manufacturer of elec-

enough to handle most work-station the place to acquire such skills is in ele- tronic products long before it went into tasks, and networks are under develop- mentary and secondary school. Reason- computers, which today account for ment. By 1985 personal-computer net- ing that a student trained with the com- about a fifth of its . Although its works will be in operation in many busi- puter of a particular manufacturer is sales have risen steadily, its share of the ness organizations. likely someday to be a purchaser of that market has decreased from 50 percent in The home-computer segment, which . Commodore has offered schools 1978 to an estimated 22 percent this is the most visible and well-publicized and colleges three machines for the year. Radio Shack has a broad line of

one, in 1981 accounted for 1 75, OOO sales price of two; Apple has proposed donat- computer products, including many that with a value of S.^5() million. Most of ing personal computers to U.S. primar> are manufactured internally, and excep- the units were bought for recreation and secondary schools. tionally good distribution: in addition (primarily for playing video games), but to its 8,000 full-line electronics stores they also serve as powerful educational Major Manufacturers there is a network of domestic and for- aids for children, as word processors, eign computer centers that handle sales, electronic message centers and person- The industry leaders (in terms of esti- leasing, service and training. The com- al-finance tools. A broad range of new mated sales in 1982) are Apple, Radio pany's software is developed both inter- applications will be made possible by Shack, Commodore and IBM. Although nally and by other venders. software now under development. The all of them are making a major effort to Commodore is a Canadian company average cost of a complete home system capture the largest share of the business that began in 1958 as a dealer in type- is expected to fall from about $2,000 market possible, they are trying to ac- writers and in 1976 acquired MOS

now to perhaps $ 1 ,000 in 1 985 and $750 commodate other segments as well. Technology, the original manufacturer in 1990. The company with the largest sales, of the microprocessor that is still used in The science segment accounted for not only in the U.S. but also worldwide. ,'\pple and computers. Commo- 105,000 unit sales in 1981 with a value is Apple, whose first prototype was built dore has more sales outside the U.S.

of $336 million. Computers intended in a garage in 1976. The company's first than any other company, and it has 65

for scientific and other technical appli- four years were financed by private in- percent of the European market. It has a

cations tend to be more powerful than vestment and venture capital; it went broad line of inexpensive products (with other personal computers and to have public in 1980, but 64 percent of its one minimal model at $150) and has components that facilitate their being stock is still held by insiders. .Apple's done well in the education segment. linked to analytical and sensing instru- sales in 1981 amounted to $335 million, IBM, the world's largest supplier of ments. The market is therefore charac- 2.9 times as much as the year before, data-processing equipment, has long terized by products with specialized and its earnings were $39.4 million, 3.4 dominated the market for mainframe

hardware and an array of specialized times as much as in 1980; it claimed 23 computers but had not done as well w ith programs. percent of the U.S. market, and U.S. smaller computers before entering the

The education segment is potentially sales accounted for only 76 percent of personal-computer field in mid-1981. It

very large, but it is critically dependent its total sales. Much of Apple's success captured a substantial share of the mar- on the availability of funds; currently is attributed to the company's policy of ket (an estimated 14 percent this year)

money is scarce for public-school sys- encouraging venders of software and with remarkable speed. The strategy tems. Nevertheless, in 1981 education- peripheral equipment to develop and was to rely heavily on outside sources al institutions bought 35,000 personal sell products that are compatible with not only for software, distribution and computers with a value of $98 million. Apple computers. For example, more service but also for hardware; the IBM Computer-assisted instruction involves than 11,000 application programs are personal computer's disk drive is sup- the student in a lively interaction with available for Apple computers, 95 per- plied by the Tandon Corporation, the subject matter in almost any field of cent of them developed by independent monitor is from Taiwan and the printer study and allows the individual to pro- venders. All three models of the .'\pple is from Japan. The keyboard is supplied by IBM—and so is the brand name. IBM has established a publishing house that PIN COLLAR SPRING solicits new software programs from PAPER outside authors. IBM's success has interesting implica- tions for the future of the personal-com-

puter business. The industry is volatile. RIBBON American companies such as the Corporation and Atari, Inc., and a num- ber of Japanese manufacturers (notably the Nippon Electric Co., Ltd.) are in a PAPER position to overtake the leaders. New entrants are in the wings. In evaluating MAGNETIC POLE PRINTING PIN their prospects one must consider what PRINTING HEAD MAGNET ACTUATOR the requirements are for commercial success. What is clearly not mandatory, is relatively inexpensive, fast (up to 200 characters per second) DOT-MATRIX PRINTER to judge from IBM's strategy, is estab- and flexible: it can generate compressed, expanded or bold characters or even graphic images, lished manufacturing capability. Rath- depending on the commands it receives from the computer. The printing head is a vertical ar- er, the fundamental requirements would ray of pins that are fired selectively, as the head is swept across the paper, to press an inked rib- seem to be the financial resources to buy bon against the paper and thereby form a pattern of dots Ueft). Here each capital letter is a sub- the the abili- set of a matrix seven dots high and five dots wide; two more pins are available to form the necessary components and descenders of lowercase letters such as p. The pins are fired by individual solenoids (rij;hl). ty to market a product successfully and

The mechanism illustrated here is that of a dot-matrix printer made by America, Inc. distribute it rapidly over a wide area.

10 STEPPER MOTOR DRIVES RIBBON

STEPPER MOTOR, ROTATES PLATEN

SERVO MOTOR. DRIVES CARRIAGE

DAISY-WHEEL PRINTER produces "letter quality" copy at a rate of clockwise or counterclockwise to bring the proper symbol into posi- from 20 to 55 characters per second. This is a schematic representa- tion and is stopped; the hammer strikes (with an energy proportionate tion of a Qume Corporation printer. The printing wheel has a plastic to the area of the symbol: much harder, say, for a H than for a com- hub around which are arrayed 96 (in some models 130) radial spokes; ma), driving the sliding wedge against the end of the radial arm to a letter, number or other symbol is molded into the end of each spoke. press the inked ribbon against the paper; the carriage and ribbon ad- In response to signals from the computer the wheel is rotated either vance as the wheel is spun to bring the next symbol into position.

ELECTROMAGNETIC HEAD

STEPPER MOTOR

DRIVE MOTOR

FLOPPY-DISK SYSTEM records large quantities of information trieve information or impose magnetization to store information. An on a flexible plastic disk coated with a ferromagnetic material. The index mark, whose passage is sensed by a photoelectric device, syn- disk rotates at 300 revolutions per minute in a lubricated plastic jack- chronizes the recording or reading with the rotation of the disk. This et An electromagnetic head is moved radially across the of is a schematic drawing of a double-sided disk drive made by Qume. the disk by a stepper motor to a position over one of the concentric There are two gimballed heads, which read and write information tracks where data are stored as a series of reversals in the direction of on both sides of the S'A-inch disk. On each side of the disk some magnetization. The bead can read or write: sense the reversals to re- 160 kilobytes of information can be stored in 40 concentric tracks.

11 Many organizations, including some they tend to be too thinly capitalized to average of four visits to a store, lasting whose present business has nothing to compete vigorously. They have been for a total of seven hours; department do with electronics, have such capabili- supplanted by franchised retail chains stores are not accustomed to that kind of ties and will be able to acquire technical such as Computerland, which sold $200 selling effort. Oflice-equipment stores, expertise as it is needed. Organizations million worth of computers and acces- on the other hand, have contacts in their as disparate as CBS and Coca Cola, as sories in 1981. Such chains of stores of- local business market and can provide Time-Life and the Prudential Insurance fer the products of a number of manu- the needed sales and service expertise. Co., have the resources and the access facturers. They can atford a technical Sears has recently opened specialized to marketing and distribution facilities statT to advise the buyer and can provide stores in large cities to handle only per- that could enable them to enter the per- long-term maintenance and servicing. sonal computers, word processors and sonal-computer market soon. Less specialized retail chains that deal in auxiliary equiprnent. such electronic products as stereo com- Manufacturers themselves sponsor a Distribution ponents have added personal comput- variety of outlets for their products. Ra- ers to their inventories. The lack of com- dio Shack depends largely on its own Large computers are sold by the man- puter expertise in electronics stores chain of retail stores. IBM, Xerox and ufacturer's own sales stall, which deals has been a handicap. As the reliability Digital Equipment arc opening their directly with the individual or the or- of hardware improves and software be- own stores to supplement other chan- ganization planning to use the system. comes more standardized, however, and nels of distribution. The profit margin on a personal com- as Japanese companies (which have maintains catalogue showrooms, where puter is not large enough to warrant a strong ties to the electronics chains) a customer can inspect the company's direct-sales force of this kind. A num- come into the market, such stores are products, make a choice and leave an ber of other channels of distribution likely to become a major channel of dis- order that is filled from a central ware- have therefore been developed, some tribution. house. Manufacturers may also fmd that by the manufacturers and some by re- Department stores have generally not a direct-sales staff is justified for bulk tailing entrepreneurs. had much success in selling personal sales to government agencies, large cor- Independent retailers who operate a computers. For one thing, they cannot porations and academic institutions. single store have had a hard time with provide sustained maintenance. More- Radio Shack and IBM have established personal computers. They can order over, one study found that someone who such staffs. They run the risk of antago- only limited quantities of a product and buys a personal computer has made an nizing retail dealers who might other- wise compete for these large sales. Mail-order companies have been a significant presence in the personal- UTILITV ASSEMBLERS APPLICATION field. handle large quan- PROGRAMS COMPILERS PROGRAMS computer They I NTERPRETERS tities and are able to offer large dis- counts but no on-site maintenance and servicing support. Moreover, full-serv- BOOTSTRAP ASSEMBLY WORD PROCESSING ice dealers are less likely to handle a L I HKER BASIC SPREADSHEET EDITOR FORTRAN INCi^ME TAX product that is widely available at a dis- DEBUGGER PASCAL GAMES coimted price. TRACE C INUENTORY SYSTEM A new kind of outlet that is peculiar to etc. ADA NAILING LIST etc. GRAPHICS the personal-computer field is the "val- etc. ue-added house." It buys hardware from the manufacturer, buys or develops pe- ripheral equipment and software for a specific application or a specific kind of user and offers a complete package. The FILE MANAGER AND JOB SCHEDULER services of a value-added house can be particularly attractive to an organiza- tion with little computer expertise. I 1 MEMORV INPUT-OUTPUT MANAGER MANAGER Who Needs It? In spite of the implications of the word "personal" and the popular image DEU I CE PRIVER of family members gathered around the to do schoolwork, bal- DEU I CE EU I CE DEU I CE DRIUER RIUER Idriuer ance the checkbook and shoot down ~~1 spacecraft, it is clear that most personal computers are being bought b> busi- DEU I CE nesses and other organizations. That [PRIMER g does not necessarily make the computer di spl a».n i^oAet^ any less personal: it may still be dedicat- 5 ed to the needs of one individual. More aanaauaa aaaaaaaaa than a fifth of the U.S. labor force is engaged in otiice work; office costs con- kew >o AK*cI ipr'inteif dlisk stoir»a.sre stitute more than half of the total costs incurred by many companies, and those "BUSINESS GRAPHICS" SOFTWARE greatly increases the utility of personal computers costs are increasing at a rate exceed- and is responsible for much of their growing acceptance. This chart, a version of the illustra- ing 7 percent per year. Personal com- tion on page 91, was generated on a personal computer with Execu-Vision, a program distribut- increase the productivity of ed by Digital Systems Associates, and was printed out by a dot-matrix printer. The task took puters can about iS minutes. Rapid preparation of such charts, as well as graphs, tables and even draw- the office and of white-collar workers.

ings, with low-cost equipment is of major value in the preparation of reports and presentations. In an organization that already has a

12 mainframe computer personal comput- nipulation programs such as VisiCalc profit from or enjoy his own personal ers can lighten the load on the central fa- enable the manager to evaluate alterna- computer is harder to say. For some cility, which can spend more time on tive courses of action, to ask the kind of professionals, to be sure, the advantage "batch" data-processing tasks such as question that begins ""What if" and to of having a computer always ready to payroll or inventory control. Personal get an answer almost instantaneously. hand is quite clear. Other people may computers make possible the mechani- Such tasks can in principle be accom- buy one essentially because it is avail- zation of a w ide range of ollicc tasks that plished with a centralized mainframe able and affordable, with the applica- ha\e been handled \s ith t\ pewriters, cal- computer, but they are done more effi- tions to be defined later. Specific ap- culators and photocopying devices. ciently with a personal computer, with plications will flow from the capabili- Managers in business are said to de- far less expenditure of capital and by ties of the computer. A computer keeps vote more than 80 percent of their time individuals who have had no technical track of things and sorts things. It calcu- to preparing for and attending meetings training. lates. It can marshal a large body of and "presentations," to collecting infor- All of this having been said, the fact data, change one variable or more and mation or to making decisions based on remains that the exact role to be filled by see what happens. It can indeed balance analysis of alternatives. Personal com- personal computers in an organization a checkbook (rather, the owner can bal- puters have impact on all three activi- often cannot be foreseen. Many orga- ance his checkbook with the help of ties. New ""business graphics" programs nizations have found that rather than the computer), list appointments or be make it possible to quickly generate meeting a know n need, the presence of a linked to a home-security system. None slides and printed material for meetings. personal computer identifies a previous- of these applications by itself would jus- Winchester disks and programs for the ly imidentitied need (much as the avail- tify the purchase of a computer. With storing and management of large data ability of a physician may bring to light curiosity and ingenuity, however, the bases help the individual to examine a previously unrecognized health prob- owner of a personal computer will de- a large body of information, discern lem) and then meets that need. fine-his own applications, shaping the trends and detect problems. Data-ma- Whether an individual needs or will system to his own personality and taste.

The Authors

HOO-MIN D. TOONG and AMAR he has worked for the central govern- GUPTA are electrical engineers whose ment of India evaluating and purchasing work centers on how computer systems computer systems. For the past four and human organizations affect each years he has divided his time between other. Toong is assistant professor of India and the U.S., doing work on com- management at the Sloan School of puter systems. Management at the Massachusetts Insti- tute of Technology and head of the digi- tal-systems laboratory at the Center for Information Systems Research of M.I.T. His degrees in electrical engi- neering and from M.I.T. include a B.S. (1967), an M.S. Bibliography (1969) and a Ph.D. (1974). Gupta is a postdoctoral associate at M.I.T. His Microprocessors. Hoo-min D. Toong B.Tech. (1974) in in Scieiiiific American, Vol. I'M. No. 3, and his Ph.D. in computer technology 146-161; September, 1977. (1980) are from the Indian Institute of Personal Computer Report. Hoo-min Technology in Kanpur. He has also re- D. Toong and Amar Gupta. Digital ceived an S.M. from M.I.T. Since 1974 Systems Associates, 1982.

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