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Jack Tramiel vs. IBM - The Atari PC Story


The story of Atari’s CES 1987 PC launch and Jack Tramiel’s personal beef with IBM and Apple. I also restore a rare Atari PC3 computer and see if it works!

Big thanks to Atari Legend for additional footage of the PC1!

Also big thanks to the wonderful LGR for your amazing voice acting talents!


“What a turnaround Jack Tramiel has wrought at Atari”

“Videogame pioneer Atari rebounds finally into the black”

“A big name in high-tech is back in the news and for a change the news is good”

In 1987, the Atari Corporation was finally back on a high. 3 years of ruthless cost cutting and a renewed focus on home computing at the hands of ex-Commodore founder Jack Tramiel had led to the business posting its first positive financial results in years. Quite the turnaround from the dark days of 1983 - when Atari posted a record loss of over $536million - that’s 1.6 billion in today’s money.

Tramiel - a notorious cutthroat businessman - had achieved this monumental feat with huge company-wide cuts and restructuring, alongside a canny repackaging of their 8-bit computer line in the form of the XE range - which of course was older technology that could now be produced very cheaply and sold on the strength of its sizeable back catalogue. In 1985 Tramiel’s Atari also quickly developed and brought to market their own very capable GUI-based Mac and PC competitor in the form of the ST, which turned out to be a strong seller, particularly in Europe, again due to its very aggressive pricing and low cost business-oriented peripherals including a laser printer, high resolution monochrome monitor and modem.

To say that the advertising at the time was “on the nose” is something of an understatement.

“The chairman of Atari has a motto he’d like us to follow, so Atari is going to show you that - despite its image - IBM charges too much for the memory it gives you.”

“That Apple Macintosh Plus costs far too much for the memory it gives you.”

”Atari won’t do that to be malicious, but to demonstrate that the Atari ST is nothing less than the best value in personal computers!”

“Who’s going to win the computer war?”

“Stay tuned.”

But Tramiel wasn’t done yet. You see, despite Atari pushing the ST as the next big thing, it was hard to ignore the growing market for IBM compatible PCs - a direct competitor - and Jack wanted a piece of that pie as well. In fact, you could say he wanted to own the whole pie shop.

So, in true Tramiel style, the Mega ST - itself a business-oriented professional spin on the ST - had its heart transplanted and its case repurposed for an IBM compatible turbo XT-class PC which was revealed at 1987’s Consumer Electronics Show.

It was a very sleek looking machine compared to the competition’s boxier offerings and with a custom motherboard and chipset designed in-house by Atari - surprisingly capable while keeping production costs to a minimum. It featured an 8MHz turbo mode, EGA graphics with a dedicated 256k of video RAM, and a generous 512k of system RAM, which could be upgraded to 640 - more than enough for anyone. Oh, and much like IBM’s offerings, also featured a slot for an 8087 co-processor for professional 3D work. The keyboard was pretty excellent by all accounts, using IBM’s own XT standard and being manufactured by Cherry. Atari also added integrated support via a dedicated port for the low cost ST mouse - at that time an expensive option on competitor’s machines.

In Tramiel’s own words:

“Today, we declare war on the computer industry!”

Unfortunately the PC1 - as it would later come to be known - was somewhat flawed. The compact Mega ST case meant that internal expansion was pretty much a non-starter - and this was a strong selling point for IBM’s architecture. Yes, ISA slots - as they were then becoming known - could be added externally with third party solutions as Atari had thoughtfully provided the bus on an internal header, but it was an expensive and fiddly add-on.

Also, hard drives were starting to become common, and while Atari offered its own external unit that plugged into that same header, internal solutions similar to IBM’s offerings were pretty much off the cards - again, due to the compact case.

So, while a good start, it was obvious that Atari’s PC strategy needed a rethink - and later that same year, we got the Atari PC2, with a redesigned case and motherboard that addressed these shortcomings.

Other than that the specs were the same and it seems the PC2 was very short lived. So in Atari’s second complete redesign for 1988 - they certainly were busy - came the PC3, which is the case design that would go on to be used for the rest of Atari’s PC range until their PC division was finally shut down 5 years later in 1993.

So… I think without further ado, let’s have a look at what’s inside this thing, and get it all cleaned up and tested ready to fire it up.

Getting inside is just a case of removing these 4 screws on the sides - and before we go much further I just wanted to say a really big thanks to my very good friend and patron of the channel Gary, who very kindly donated this PC having known that I’d wanted one for ages. So thankyou very much Gary, being able to finally get my hands on one of these genuinely does mean a lot to me.

So with those screws out of the way the lid lifts off, being careful to manoeuvre it around the floppy drive.

I must admit I was a bit confused by this black plastic thing - at first glance it looked like it might be some kind of heatsink or something. Have you worked it out yet? Yup, it’s the slots to support the far end of the full length expansion cards. It must have fallen out in transit and I’ll leave it out for now while I clean things up.

I also found this Duracell battery rattling around inside - it has a date on it of January 1995, so I guess that’s probably in need of replacement. Thankfully no sign of leakage so that’s all good. I guess it was originally stuck to this velcro here.

So now we get our first clear look at the motherboard - this side at least - and it’s so lovely and clean. There’s a factory bodge wire going from the CPU to one of those custom Atari chips labeled C101683 - I believe this is the equivalent of the ST’s GLUE chip that ties various bits of the system together - managing interrupts and generating timing signals and whatnot.

Based on the information I found on - which has been incredibly useful in researching this video and I’ll link it down below - this is the third revision of the PC3 motherboard. There was one more after this without the bodge wire.

Very typical of Atari’s move fast and break things philosophy. They really were well ahead of their time.

Other things of note in this area are the AMD 8088-2 CPU, which is an 8MHz capable 8088 as expected, and the 8087 co-processor socket which is unpopulated. Apparently this PC boots up in turbo mode by default if this socket is empty, with the faster CPU speed having to be enabled manually if there is a co-processor in there, which I suppose makes sense.

There’s a disk controller card in one of those proto-ISA 8-bit expansion slots so let’s get that out and take a closer look at it.

I tried Googling some of the part numbers on this and didn’t really get very far. It’s not got an Atari C part code on it so I don’t think it was manufactured by them - and literally every part of this machine has one of those including the speaker bracket and even the slot covers, which I thought was very cool. claims that these were made by Adaptec, and their information has been very reliable so far, so who am I to argue?

What I can tell you is that this card should be hooked up to the Seagate ST-238 30MB RLL hard drive - if the original one is still in here somewhere - so I suppose we’ll see if we can find it.

Oh, and now it’s out we can get a good look at the expansion slots and the power connector, which appears to be standard AT or at least something close to it, so I’ll check that out later.

The motherboard might be nice and clean but there are certainly a few dust bunnies in some of the nooks and crannies that need evicting, so lets get this fully stripped down so I can give it a good blast out with the air compressor.

So next up, lets get the 5.25” floppy drive out. I must say I really appreciate these FDD and HDD markings stamped next to the screw holes, it’s a really nice touch and makes sure that the drives end up in the right places.

So, with the floppy drive out we can see that this is a 360k Chinon drive, and apparently the PC3 was also offered with a 720k Epson 3.5” drive as well.

Here’s that Seagate ST-238R hard drive I mentioned. This is an RLL drive, which is an evolution of the original MFM technology used by earlier hard drives. MFM or Modified Frequency Modulation encoding was the same technology used by floppy disks, but by the time this second generation of PC drives came around, RLL or Run Length Limited encoding had managed to squeeze an extra 50% capacity onto the same drives.

Yup, you could actually hook up an MFM drive to an RLL controller and it would work as they were mechanically identical, but this was unreliable with some earlier units. Thankfully this later 238 is RLL certified so would have been a much more reliable setup.

I like how Atari have modified this to move the activity LED over to the other side of the case. The original LED is still present - this was visible through a small window on IBM machines - but they’ve soldered another one in in parallel with it. Hey? Why not.

Oh, and speaking of IBM, I should point out that these are half height drives rather than the full height drives I’ve seen in earlier XT machines that I’ve worked on.

So with those drives out of the way I can finally - carefully - remove this decorative plastic skirt or foot or whatever you want to call it. I’m guessing the plastic will be pretty brittle with age so I’ll have to proceed very carefully, and unfortunately it seems it was designed to be bent slightly to help manoeuvre it in and out of position, which is pretty nerve wracking…

But I got there in the end. This has yellowed unevenly and is particularly bad towards the front, but I’m not sure I can risk retrobrighting such a rare machine, particularly as this part has grey dye in it. To be honest, I think this is an authentic patina that I can live with.

Next up, I’ll unscrew the power switch so I can remove the PSU, and here’s our first look at the back. That Atari fan grille is a very cool touch, and we can also just about see the DIP switches for configuring the monitor type, and the external floppy connector - and with a command added to the AUTOEXEC.BAT this actually supports standard Atari ST SF-354 or 314 3.5” units, which would have been pretty common and relatively inexpensive at the time.

They also released a matching PC unit called the PCF554, which is a very rare external 5.25” drive.

So with the PSU out - and the fan here is full of disgusting grime so it’ll be good to get that cleaned out - I can finally remove this metal part and get a good look at the motherboard underneath.

As I mentioned earlier, Atari designed their own custom in-house motherboards for these machines, despite generic IBM clone boards starting to come onto the market in the mid-80s. I’m guessing a big part of that is their desire for compatibility with some of the ST peripherals like the mouse and floppy drives.

They carried on making their own boards for the PC4, which was essentially the 286 powered version of this machine, but by the time the PC5 came around - a 386 machine - they’d moved to an off-the-shelf American Megatrends board - and these later machines also dropped backwards compatibility with that ST hardware.

So, being Atari-designed, this board is very tidy and logical which is very typical for them.

Now we can get a better look at that CPU and co-processor socket and all their supporting chips, the majority of which are made by AMD. There’s also an off the shelf Award BIOS.

The CPU could be upgraded to an NEC V20 for a bit more performance, but it’s soldered to the motherboard and I’m quite keen to preserve the originality of this rare machine - I do have other faster XTs after all. Here’s a good look at that Atari GLUE chip that I mentioned earlier - and it’s not the only glue holding this motherboard together, as we can see.

In this back corner we have the floppy connector - the controller for this is actually integrated into the motherboard unlike those early IBM machines, which frees up an expansion slot and should hopefully mean better reliability and performance.

Here’s something cool! This tiny surface mount chip - Atari part number C101702-001, is actually the STMicroelectronics EGA graphics controller. This also supports CGA and monochrome Hercules modes, and can output them to Atari’s EGA monitors - even the amber screen that I have, and that’s something I hope to demo later.

Finally we can see the 5 expansion slots. These are the same as the PC Bus featured in early IBM machines and other XT clones and are 8-bit. This standard would later come to be known as ISA or Industry Standard Architecture, particularly once the 16-bit version was standardised. Some 16-bit ISA cards do work in these slots as well, as per the IBM machines and all other compatibles.

Anyway, I’ll leave the motherboard in the case for the big cleanup operation as it doesn’t really need to come out and it’s safer where it is.

Oh, and now it’s in the garage we can take a look at the sticker on the bottom. I’m told this was a European import and from the Dutch and French on the sticker, I’m guessing it was originally sold somewhere in the vicinity of Belgium.

So, with that all cleaned up I started putting it all back together, and before plugging the PSU in I wanted to make sure that all the voltages looked OK, and also check whether this was indeed AT just in case I need to replace it in future.

The voltages all look spot on and indeed this is the full AT pinout and even includes all of the negative voltages. I’m not sure whether this connector is physically compatible with AT and I don’t have one to hand to check, but it looks like it should be.

So with the PC all - mostly - back together, I can finally see if it fires up…


It looks like the 35 year old hard drive is working as well which is fantastic, and it seems the original owner set up this menu running on top of DOS. This all looks like boring business stuff so I’ll exit to a DOS 3.21 shell and see what I can find.

Ah, here we go… Games!

The Infocom Treasure Chest includes Zork, so I had a quick dabble with that and that all seemed to be working fine. So I can finally put this back together.

So I want to dedicate some proper time to looking at the software side of things - what I couldn’t see on here was any evidence of GEM which would have been the original desktop environment. I’ve only ever seen it running on an Amstrad - and of course the ST - so it would be cool to check that out.

I did these two big boxes of disks with the PC and it’s going to take some time to go through them and see what’s on there and demo everything so you can look forward to that in part 2 - so make sure you’re subscribed to the channel so you don’t miss that.

Big thanks once again to Gary for the very kind donation - I’ve already had loads of fun exploring this machine - and of course to my other patrons, channel members and Ko-Fi supporters whose names you can see on screen as I speak.

And finally, big thanks to you for watching - and I’ll hopefully see you again next time.

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