In Atari's early days, one of the video game designers and his rather odd friend worked many late nights on a new arcade game called "Breakout".   While working on this new video game and playing other arcade games all through the night these two friends were busy on the side designing and building (from "borrowed" Atari parts) a personal computer system.   They approached Nolan Bushnell with their new creation to see if it would be a product that Atari would sell and support.

At the time Atari was concentrating on getting its new home version of Pong out the door and all resources were tied up, with no spare capital to devout to such a costly and risky product, Nolan Bushnell referred the two budding entrepreneurs to some venture capitalists to finance their new product.   Who was this former Atari employee?   None other then the current iCEO of Apple, Steve Jobs.  Who was his rather odd friend?  Steve "The Woz" Wozniak and their creation was the Apple Computer.

In 1978 the team that had finished the Atari VCS was at work on a new high-end video game console chipset.    Atari was now owned by Warner Communications since its sale in 1976 by its original owner/creator Nolan Bushnell for $28 million.    Atari was now run by Raymond Kassar.    Making computer systems was the next logical step for the company.   Engineering was already working on designs and management moved forward with the risky and expensive new division.      Atari's Home Computer Division (HCD) was born.

Atari's new Home Computer Division was so hastily started that office trailers were brought in and set-up behind Atari's offices while work progressed on the new computer designs.   Working in these rather cramped quarters Atari's new HCD engineers & designers went to work on designing the worlds first personal computers to use custom IC's to handle graphics, sound and communication.    Atari's first two computers were called the Atari 400 and Atari 800 Personal Computer Systems.    These computers had a large assortment of "Intelligent" peripherals which communicated through a custom bus called the "SIO" (Serial I/O) which compared to today standards is a rather simplistic version of the USB (Universal Serial Bus).   In fact the USB and the Atari SIO have a lot more in common then many would think.   One of Atari's original computer engineers, Joe Decuir who created the Atari SIO bus is also one of the team of engineers at Microsoft to help design and holds patents on the USB.

The Atari 400/800 line was cancelled in 1982 to be replaced by a new sleek high-tech looking computer called the Atari 1200XL.   The computer had an incompatible OS, no external expansion bus and little enhancements over the original 400/800 line and due to these shortcomings, the sales of the Atari 800 computer increased while people rushed to buy them before supplies ran out.   The 1200XL was quickly replaced by the Atari 600/800XL line of computers.    These computers fixed many of the 1200XL's shortcomings, had a Parallel Bus Interface for external expansion options.   Several other computers were planned with voice synthesizers, built-in modems and built in disk drives but were never officially sold.

In the works in 1983, Atari had several new high-end computers including one called the 1600XL which would be a dual processor system with 6502 and 80186 for IBM compatibility.   Another System called "Sierra" with a high-end audio/video chipset based on the MC68000 processor.   Yet another project in the works was another system called "Gaza" which also used a high-end chipset and MC68000 processor.    These systems would never make it past prototyping as Atari would be sold in 1984.

On July 2, 1984 Atari's Consumer Electronics Division and its Home Computer Division were sold to Tramel Technologies Limited and the company was renamed Atari Corporation.   Leonard Tramiel adds: "Our name Tramiel was constantly being mispronounced as "Tra-meal" and my dad hoped that the other spelling would get people to say "Tra-mell" (it rhymes with "done well"). It didn't work." 

The Atari XL line of computers was cancelled and in 1985 a new line of computers to replace the XL line called the Atari 65XE and 130XE computers were introduced.

Atari also introduced an all new line of computers called the Atari ST line.     These new computers would use the Motorola 68000 processor, come with 512K of memory, use 3.5" disk drives, RGB monitors and a graphics user environment based on CP/M 68K and Digital Research GEM.    Originally the processor for this new line of computers was to be the National 32016, however its spped and its availability was in doubt, so the MC68000 was chosen.

Atari would, over the course of 8 years improve upon its ST line of computers with such lines as the Mega ST, STe, Mega STe, TT030 and Falcon030 line of computers.   Atari also introduced a laptop called the STacy and had in the works an under 5 lb. laptop called the STBook as its replacement.    A pen based touch tablet version of the ST called the STpad or "STylus" had been shown in prototype form but was never sold.    Atari introduced an assortment of peripherals from disk drives to very low cost and feature rich laser printers for its line of ST computers.

In 1987 Atari introduced a line of IBM compatible computer systems starting with its Atari PC-1 which was an all-in-one IBM XT compatible computer with built in disk drive, built in serial, parallel, keyboard, mouse and video ports (video could be configured for CGA, Hercules, EGA and other settings).   An internal bus port on the motherboard allowed for an expansion card to use the Atari Mega ST "Megafile" hard disk system.    Atari also introduced other PC compatible systems as well as a 386sx laptop and also an IBM XT palmtop computer the size of a VHS video tape.

The Atari Falcon030 was Atari last computer system to be produced.   All company resources were directed towards the creation and completion of Atari's 64-bit Interactive Multimedia System called the Atari Jaguar 64 which was sold in 1993.

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