16-bit personal computers; Two-way stretch

Business, finance and science

Science and Technology

The Economist

December 18, 1982

LAS VEGAS -- New 16-bit personal computers are falling into two families, based on the microprocessor chips and the operating-system software they use. One family may come to dominate the market for desktop tools for white-collar workers; the other the market for computers for small businesses. The market is fluid, however, and there is still time for this emerging distinction to become blurred.

The first family is based on chips made by America's Intel, of which the best known is the 8088, used in the IBM personal computer and its fast-growing school of imitators. At present, these 16-bit machines dominate the desktop, productivity-tool part of the market. The other family is based on Motorola microprocessors, especially the 68000 chip. Most computers using the 68000 are too recent to have established a clear market position, but many are aimed at the small-business field.

Computer firms using Intel and Motorola products have clear development paths ahead of them. As successors for the 8088, Intel is offering two new chips: the 80186 and the 80286 (usually referred to by just the last three digits of their model numbers). These replace a whole printed-circuit board full of chips and can carry out tasks which previously required both an 8088 chip and half a dozen subsidiary bits of silicon. A firm using the 186 can put together a 16-bit computer's central processing unit for around $35, half the cost of 16-bit versions based on 8088-type chips.

The first computers using the 186 were announced earlier this month at the Comdex show in Las Vegas. A key feature of these machines is that they use two important operating systems originally developed for 8088-based machines, MS-DOS and CP/M-86. This gives the computers access to an existing library of software, especially the programmes -- mostly using MS-DOS -- which are being written for the IBM personal computer.

Availability of good software is the key to selling personal computers, so it is unwise for computer-makers to jettison the software written for earlier models by plumping for incompatible operating systems on their new models. Realising this, IBM is likely to stick to MS-DOS. And that, in turn, means that IBM and its imitators have a strong incentive to stay loyal to the Intel family of chip designs.

Similar factors apply to Motorola's more ambitious 68000 chip (and the bigger, compatible sister of it that is coming). One of the first operating systems available for the 68000 was Unix. Originally written for minicomputers by researchers at Bell Laboratories, Unix appeals to those who want their computers to cope easily with telecommunications. It also copes well with tasks, like the simultaneous handling of several programmes, expected of minicomputer-based systems.

The 68000-based machines that run Unix are mostly intended to be the central computers for small businesses, supporting a number of different terminals and tasks. And they mostly cost more than 8088-based machines. Too much for the desktop market: big companies seem willing to pay up to $5,000 for a personal workstation, the cost of a typical 8088-based system, but no more.

The markets are likely to become blurred. Unix is now available for the 8088, while MS-DOS and CP/M-86 will soon become available for the 68000. In short, computers based on either the Intel or the Motorola family of chips will be able to use software originally written for the other. Rival 16-bit microprocessors, from Zilog, Texas Instruments and National Semiconductor, may still manage to muscle into the market. More important, Apple Computer's Lisa (due to be introduced on January 19th) will cut right across the distinctions (and price rules) described above.

Lisa, based on the 68000, is intended above all as a personal workstation for corporate middle-managers, one that will require no computer knowledge to use. It will cost considerably more than $5,000 -- perhaps closer to $10,000 -- and will require a whole new library of software to fit its elaborate standards of user friendliness. Apple is convinced it will sell.