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32-bit registers and a 32-bit data bus, and incorporated 275 000 transistors (1.5 microns). The
initial price was $299. It could access up to 4 GB of physical memory, or up to 64 TB of vir-
tual memory. A worrying development for Intel came from the new start up company, Chips
& Technologies, which developed a set of five chips that were equivalent to 63 smaller chips
that were found on the IBM PC AT motherboard. This development meant that many of the
support devices produced by Intel could be replaced by many less devices, thus cutting pro-
duction costs. At Motorola, the success of the 68000 brought the 68008 processor.
After Apple had released their 68000-based Macintosh in the previous year, Commodore
released their new flagship computer: the Amiga 1000. Unlike the IBM PC, it was fully mul-
titasking and used a WIMPs (windows, icons, menus and pointers) system. In its basic form
it cost $1300 and had 256 KB RAM, and 880 KB 3.5-inch disk drive. They also released the
Commodore 128 computer, which was an upgrade of the Commodore 64. Along with the
Amiga, Commodore were trying to get into the PC market with the PC10 and PC20 com-
puters, and tried to stop production of the Commodore 64 (but public demand restarted pro-
duction several times).
At Apple Computer the success of the Macintosh continued. The battle was now on for
the PC market, and they had the IBM PC in their sights. During the SuperBowl, Apple ran a
TV advert for Macintosh Office, which showed blindfolded business executives walking off
a cliff, like lemmings. Things were becoming turbulent in Apple, after years of growth had
produced a grown-up company with formal business methods. This type of environment did
not suit Steve Jobs (the co-founder of Apple Computer), and he left, along with five senior
managers, to form NeXT Incorporated. In fact, John Sculley, the former Pepsi-Cola president
who, in 1984, had been brought in to train Steve to become the CEO, forced Steve Jobs out.
From then on, John Sculley was the man in charge of Apple.
The future for Apple looked difficult, but the key to future growth would be the Macin-
tosh, and not Lisa or the Apple II. The software for the Macintosh was being produced as
quickly as the market was buying it. Microsoft released Microsoft Word 1.0 and the Micro-
soft Excel spreadsheet ($95). Apple were not really impressed with the first version of Excel,
and reckoned that Lotus Development's equivalent was better (named Jazz). Another key
package for the Macintosh was Aldus PageMaker from Aldus, which created a new industry,
which for the first time, integrated text and graphics with a design package: desktop publish-
ing. For years, PageMaker was the de facto standard package for graphics design and desk-
top publishing. Microsoft obviously had a foot in both the IBM PC and the Macintosh mar-
ket, as they released Microsoft Word 2.0 for DOS, and QuickBASIC 1.0.
The year produced many good deals for Microsoft, including:
Microsoft signed a deal with IBM for a joint-development agreement to work together
on future operating systems and environments.
Microsoft signed a deal with Apple to cover Apple's copyrights on the visual display of
the Macintosh.
Microsoft purchased all rights to DOS from Seattle Computer Products for $925000.
The deal of the century!
Atari struggled on, in face of the competition from Apple, Compaq, Commodore and the
IBM PC. With the might of Microsoft added to the equation, they had little chance in the
profitable business market. They continued their previous success in the home market with
the 65XE, the 130XE, and the 520ST, for $120, $400, and $600, respectively. Radio Shack
also continued to swim against the tide with the release of the Tandy 6000 multi-user system
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