Atari President Sam Tramiel is a busy man these days. With several new computers scheduled for U.S. release in the last half of 1989, Tramiel has his hands full. But he took time from his busy schedule in early May to meet with START's editors at Atari headquarters in Sunnyvale, California. There, over his favorite in-office lunch (a tuna submarine sandwich and a soda), the president graciously and openly revealed the company's exciting new products and plans.
Sam Tramiel is unpretentious and straightforward, and he knows what he likes. When it comes to machines, about the only machines that excite him as much as Atari's new products are Enzo Ferrari's automobiles, of which he has owned several classics. But now on to the computer equivalent of a Testa Rossa: Atari's new TT.
START: Let's talk about Atari's newest computers. Tell us about the TT.
Tramiel: The TT is great. it should be just dynamite it's a very, very versatile classic machine. And the price of the machine is one that will really shake up the marketplace It will be a dynamite machine.
One version of the TT is a 6-meg machine which will run UNIX, TOS and emulate MS-DOS. It will have a lot of expandibility, six or more VME full-sized cards, many rotating devices can fit into it- four or six, depending on their size it's a much more upper-end machine. What that will sell for I'm not sure
START: Half the price of anyone else out there?
Tramiel: Yes, but we recognize who we are, and our marketplace is the mass market. I'm not going to pretend we're going after IBM and Apple and Sun. But we'll have a great machine and if people want to buy it, God bless them, here it is.
START: It sounds impressive A multisync monitor will handle it? Tramiel: The multisync monitor will definitely handle it. Also, a slightly adjusted VGA color monitor and slightly adjusted VGA monochrome monitor will handle it as well. START: Will you be marketing monitors to go with the product?
Tramiel: Absolutely. Well be marketing Atari monitors.
Stacy and the Portfolio
START: When will the Stacy [the much heralded laptop ST] be shipping?
Tramiel: It should be shipping this summer.
START: Are Stacys going to be shipping to developers soon?
Tramiel: There are no plans. There's nothing really to develop on it that's any different than the 1040ST, because it is a 1040. So we haven't rushed it from a development point of view.
START: Is there room in the box for a modem?
Tramiel: No, there's no room in the box, but there is a 72-pin expansion slot in the back to do special things with if you want to. It's for musicians especially. For modems, of course, you can plug into the RS-232 modem port in the back.
START: Is the 72-pin bus port the same as the Mega bus port so that any product that was originally developed for the Mega, like the Moniterm monitor, would work if you wanted?
Tramiel: Electronically, it's exactly the same.
START: Can the Stacy be hooked up to a color monitor or TV?
Tramiel: lt goes into a color monitor if you want it to, but it does not go into a TV.
START: How many Stacys do you hope to ship?
Tramiel: A lot. I have no idea what the marketplace will require. The responses at Hannover and COMDEX were greater than I expected. I was amazed at COMDEX; people went crazy for the Stacy there I've underestimated the laptop market before when we were at Commodore, and maybe I'm underestimating again, but my guess is 5,000 units a month. And if the market wants more, very happy to make more, no problem.
START: Will Stacy be made at the same plant in a parallel production line as your other products?
Tramiel: Yes, in our factory in Taiwan. We have the capacity to make 35,000 Stacys a month, if the market wants it. That's the tooling that was set up for production.
START: We understand you've completely redone the plant and redesigned the production line so you could take on all the new projects.
Tramiel: And we're looking at getting new factories going as well, all with surface mount technology and all the latest equipment.
START: Will these be overseas?
Tramiel: Unfortunately, yes. I wish we could do it in the United States, but so far it isn't economically viable from a tax point of view and everything else. The U.S. doesn't make it easy.
START: Even Houston?
Tramiel: Houston is a little bit better in terms of property cost, but in terms of taxes, it's a Washington issue, not a Houston issue.
START: The Portfolio [the hand-held IBM PC-compatible computer] -how many do you project to ship?
Tramiel: We project to be shipping about 200,000 pieces between now and the end of the year. That's my "guesstimate"
START: Did you think that would be the case when you first latched onto the DIP prototype?
Tramiel: We thought it would do well, but the reaction has been well beyond our wildest expectations. Initial inquiries are just gigantic. The number of pieces I gave you, 200,000, is our conservative production number. I would say the demand from our subs around the world and from our customers are three times that. We would rather be sold out, have it go crazy, then in 1990 we can make more if they want that much more.
START: When will the Portfolio be coming?
Tramiel: To the U.S. my guess would be late June. We have to get one of the peripherals to finish the testing at FCC. Everything seems to be okay. They want a peripheral plug-in to the expansion port. Then they'll know everything is okay. They want a system configuration, not just the unit by itself.
START: You have the RAM cards and everything?
Tramiel: Oh. yes, RAM cards. ROM cards, PROM cards.
START: We're looking forward to that. Will you carry the Portfolio or the Stacy while traveling?
Tramiel: I'm going to have both, personally. The Portfolio will be in my briefcase at all times. I'm going to have my diary and my address book put in there, and do simple word processing and simple spreadsheet stuff on that little machine. When I go on long trips, I'm definitely bringing the Stacy with me for the airplane.
START: We saw PC3 boxes in-house here Are you shipping PCs in the U.S. now?
Tramiel: No, we're still shipping outside the country only. We showed our first machine for the U.S. at COMDEX, and this is definitely coming to the United States market, contrary to some published reports. We're calling it the PC4, it's a 286 machine, 16 megaHertz. That will be our first PC product for this country.
START: What's the price?
Tramiel: It will sell for $1,995 suggested retail price. A minimum one-meg configuration comes with the machine, with a three-and-a-half-inch, 1.44-megabyte drive and a 60-meg hard drive built in.
START: Will that be marketed through business computer centers?
START: When the TT was first talked about, our understanding was that with the TT and the ATW (Atari Transputer Workstation) you would be going after the graphic workstation market, which would mean a direct sales channel and a sales force in-house.
Tramiel: To be very clear, were shipping ATWs in Europe now and, again, for a specific reason; it's not just to keep it out of the United States. We feel this machine is unique, it's very very powerful, and Europe is embracing it more quickly than the U.S. Universities and software companies have bought the machine in Europe; some big manufacturers, like Volkswagen have bought the machine and are doing testing with it.
We'll bring it to the U.S. probably by the end of this year, when there's some software running on the machine. The U.S. is a very, very tough marketplace and to introduce a new operating system again into the U.S., there has to be something to support it, whereas Europe is more flexible on new concepts of that sort. And it is a European machine it's an INMOS chip. S.G.S. Thompson just bought INMOS, so it's French, Italian and English. The whole common market wants to support it. Governments are supporting it. Schools are supporting it. When they've done that with all the software running on it, then well bring it back to the United States.
The TT could also be a workstation-type of machine We have no intentions whatsoever to hire an outside sales force. That is not our direction. We are a mass-market company. We need retailers -were not going direct. So on the ATW and the TT, it's through specialty stores. They will go and sell the workstation machines.
Distribution and Leasing
START: Will Atari have in-house or third-party leasing consumer credit plans for the machines, like Apple does?
Tramiel: Yes, we do plan that.
START: For the mass-marketing channels, are you going to go back into the department stores?
Tramiel: Not yet, but not because we don't want to. I don't think they're ready for it yet. They've backed out of that business, almost all of them. A few of them are dabbling in it but not very seriously. For the TT and ST, to go back into the real mass market the machines have to become more popular again in the U.S. A guy goes to a mass marketer and says "I know what I want to buy and I want it for the lowest possible price" Then he'll go to K-Mart and buy it. But if he doesn't know what he wants to buy, he goes to a specialist. If we go back to the mass market, it will only be with the lowest-end machines. The highest-end machines will be supported by specialists.
START: We've heard all kinds of numbers about how many dealers you now have. We've heard everything from 230 to 500 existing Atari dealers. Can you help us out with an accurate number?
Tramiel: Yes, we now have approximately 250 business/specialty-type dealers and about 200 MIDI-type dealers. That might be the confusion -if you add them together it's close to 500.
START: When you say specialty dealers...
Tramiel: All Atari computer dealers. We call computer dealers specialty dealers.
START: There's reportedly going to be another classification called BCC-Business Computer Centers, is that included in that figure?
Tramiel: Yes, it is.
START: Just to clarify, you're not going back to mail order?
Tramiel: Correct. To be clear, we never went to them. They got the machines through distributors, and we couldn't control it so we stopped selling to distributors.
START: The education market is a very difficult nut to crack, with the Apple II in there. What are Atari's plans?
Tramiel: The educational market is a very important marketplace. We have a customer called Computer Curriculum Corp., based in Palo Alto, and they sell approximately 10,000 1040s a year in the educational market.
There are two distinct educational markets today. One is the type that just buys computers, puts them in the classrooms and says "Kids, play. Hack away with them." That's dominated by Apples and PC clones.
Then there's the structured coursework-type of computer system, networked together with 16 or so computers in a classroom. The kids are sitting at the computer working with the teacher and going through a whole course. I've been told by CCC we have at least 25% of that marketplace That is a growing market and CCC is using the STs exclusively for that.
START: There was a product announced as the "Apple II in an ST." A company in Florida announced it, but we never heard anything else from them.
Tramiel: On the IIs and IIGS compatibility, we've been pushing that very hard for a number of years. The people in Florida have just not come through with it, so I've become quiet about it. If they come through with it, God bless them. But I think the Apple II now is becoming less and less of an important thing, even for schools. The machine has really gotten tired.
START: It certainly has, but the breadth of software out there.
Tramiel: Yes, but the schools are definitely going more upmarket now With the TT, we will no question have MS-DOS compatibility, either through our friend in Florida, Avante-Garde, or elsewhere. we're also doing that with the TT We have a contract with a company in the UK and in Sunnyvale, so we will have MS-DOS running under UNIX. The IT will run at AT orXT speeds, depending on whether you have the high-end or low-end machine. The difference is because of the memory available To run AT emulation you need a lot of memory.
START: What do you see the TT doing to NeXT?
Tramiel: I hope it clobbers them. I hope to be making money from the TT before NeXT comes out in any volume.
START: We can't see why anyone would buy a NeXT when there's a TT available,
Tramiel: I agree
START: And you'll be shipping the TT with two operating systems?
Tramiel: We'll be shipping the computer with TOS in ROM in the machine. And a lot of software will run right from the ST world into the TT world. we've done some experiments and a lot of the software works, unless it uses some special hardware and special tricks, in which case they have to adapt to the TT to work properly.
The UNIX will be a separate operating system that you can buy for the machine. Because of the royalty rates, we can't afford to bundle it in. And I'm hoping we can retail this software for the UNIX at $299 for a UNIX 5.3.1 system. To me that's a lot of money. Were not used to charging that much for an operating system-we always put it in the machine.
START: You mentioned TOS 1.4. Will that be shipping shortly?
Tramiel: We've already been shipping TOS 1.4 to developers and it will be sold as an upgrade kit to people who want to buy an upgrade kit. Were putting it into Mega production already. I guess its retail value will be $99 or less. It's basically available now.
Also, one more thing on the TT: we will be shipping keyboards included in the price, not like Apple does.
START: Is that a new keyboard or the Mega keyboard?
Tramiel: The TT will be available with either a Mega-like keyboard or an even higher-end keyboard.
START: Will that be with the Stacy key-frame that has such a nice feel?
Tramiel: There's a thing called DIN, which is a European organization that sets standards. They've just established for 1989 a new DIN standard for keyboards. If you want to sell your keyboards for offices, you must be at these specs. The TT keyboards will meet the new DIN standard-it's got the right angle, it won't make your wrists tired and all those things. It won't be exactly Stacy, but something like that.
START: It will have that good feel?
Tramiel: It's even a better feel than the Stacy keyboard. It's actually the same keyboard that we have in the PC4 machine
START: What can you tell us about the Blitter upgrades?
Tramiel: We'll have two upgrades. One, the 68000, will be a 64-pin package that includes a Blitter chip. There will also be upgrades in the flat pack which will go in some 1040 boards. So there'll be two versions of the upgrade: it will be TOS 1.4 and the Blitter package.
START: That's not the $99 package.
Tramiel: No, that's just for the TOS 1.4.
START: We've heard that it's not going to be possible to upgrade 1040s or 520s with Blitter chips.
Tramiel: Some will be easier to do than others. We will be making kits available for upgrade but because of the earlier revisions of the machine, it will be hard on some machines, to be honest. In later 1040s and 520s, we actually put a spot on the board for the Blitter, and those will be quite easy to upgrade.
START: For price and availability, check with dealers?
START: There's probably no reason to do it, but are there any plans to do 68020 add-in boards?
Tramiel: Not at all. The 020 was a mistake. It just didn't work and caused big grief and the 030 took care of that.
START: About the math coprocessor 68881. There are a number of hardware products out there that have a spot for it. They're just awaiting software. Atari also at one point announced a coprocessor board. If you don't want to upgrade your monitor but just want to .add a coprocessor, is there a plug-in board for the bus?
Tramiel: Correct. We've been shipping that for the Mega ST for a long, long time- ever since the Mega came out. On the TT, there will be a 68881 socket in the machines.
How Widespread Is the ST?
START: How many STs are installed in the U.S.?
Tramiel: We don't give country-by-country numbers. Obviously we've been shipping more than the lion's share outside the United States, especially since late 1987 and 1988. Around the world now I'm guessing that it's approaching one-and-a-half-million machines. it's a sizeable market.
START: Is Atari going to be increasing support for third party vendors?
Tramiel: Antonio Salerno is our new third-party software evangelist. He has a lot of experience in software We're trying very hard to increase our support to third-party people We are planning to have either a number of small [developers'] conferences or one big conference.
START: A LAN product, Ethernet, was announced in Germany.
Tramiel: There were four to be exact. An industrial one, less fancy ones, and one from Spain as well.
START: Will Atari be adopting one or co-marketing any of the hardware add-ons here?
Tramiel: We are planning an Ethernet-like board for the ST Mega world. And for the TT world it will be DMA-type boards and there are Ethernet boards that have wide compatibility. So we're definitely going in the Ethernet direction.
START: A while ago, Promise-LAN was announced. What happened?
Tramiel: It was canceled. It just didn't work out.
START: Will Atari be supporting, encouraging, discouraging or offering the use of any of the 68000C16 boards?
Tramiel: We're taking a neutral position. We're doing nothing about it. I hope people do very well with it. I wish them all the luck in the world. We did some experiments on the 16-megahertz 68000 and we saw minimal improvement in the performance of the machine. Overall it was just not worth the difference.
START: We appreciated the promise you made both at COMDEX and World of Atari [in Anaheim] that the U.S. will get new products first, that this is the year of the U.S.
Tramiel: No question.
START: Any projection on ST sales or ST family sales this year in the U.S.?
Tramiel: It's really a guess. We're rebuilding almost from scratch in the U.S. But if we don't sell 100,000 machines here this year, then there'll be big trouble.
START: Could you outline some of the ways you expect to do this?
Tramiel: Setting up dealers is the main way of getting a new base of distribution. We get so many letters from people around the country who want to buy an ST but the nearest dealer is 700 miles away. So we have to set up a new distribution network of good dealers. And then, of course, support them with advertising locally. Then we have the national groups set up again, thinking up national advertising. That's the plan of attack.
START: So support for the machine -repair, warranty repair- again will be handled by the dealers?
START: With minimal, only necessary involvement from the corporation?
Tramiel: A lot of involvement from us, supporting the dealers.
START: But not directly with the consumer?
Tramiel: If the consumer wants to come back to us directly, we'll fix it for him.
START: We've heard dealers have had a hard time getting warranty parts. Is that situation being corrected?
Tramiel: I've been promised that it's been taken care of-a while ago. We have a new service manager-he's in charge of it and he's quite professional. I've made it very clear to him and the factory that we must have spare parts for the products.
START: One thing that disgruntles dealers is when they have to cannibalize inventory. They end up with unsaleable machines because they have to put the mother board in a customer's machine and await an Atari replacement.
Tramiel: It disgruntles me also! I agree.
Let the Chips Fall. . .
START: What about the 80860 chip, the 64-bit chip that's been called the N10. It's apparently a new Intel chip that supports 3-D graphics and shading. What are the corporate plans?
Tramiel: We're looking now at the next generation of machines that we'll get involved with. First, we think it will be a RISC-based system. And the 80860 is one we're looking at. We're also looking at the 88000 series from Motorola.
START: What about the 68040?
Tramiel: That's definitely going to happen. That's in the ST family. From the 30 to the 40 is total compatibility, it's just more powerful.
START: You're planning a 68040 upgrade for the ST?
Tramiel: For the ST family.
CD-ROM, Federated and Hotz
START: CD-ROM-are you close?
Tramiel: We made the first 500 machines and shipped them around the world. Now we have to get software people to work more on them. Everything's ready to go -we just need more software for it. We have one program, just completed in the U.S., called the History of the World. We hired a CD-ROM product manager, who started with us yesterday, with a lot of CD-ROM experience, and his task is to get more titles on the CD-ROM.
As the father of three kids, I love the CD-ROM, but there's got to be more software. Because for educational use, it's just amazing, a tremendous resource.
START: How do you see the future of CD-ROM?
Tramiel: I see it as being a big business. And not only big business, a tremendous tool for educational purposes. I think we'll have more software ready for the machine by the end of the year. I hope in 1990 we'll launch other products. When we first showed it, we were just premature on the software side. Everything was ready, we had a great encyclopedia on it, but that was it. CD-ROM is a great idea and no one's really done anything with it yet.
START: When is the "drop-dead date" for the Federated split?
Tramiel: We're doing it as fast as we can. Everything is going ahead. We've reduced the losses tremendously. We've closed stores. L.A. is still going quite strong, as is Texas. We're negotiating with a number of people right now to sell the company. it was an expensive mistake, but it's over.
START: In our experience with Federated, they didn't have a handle on which computers they were selling.
Tramiel: That's only one of the things they didn't have a handle on. That we could have lived with. They didn't have a handle on anything really. It was a disaster, and we just couldn't fix this one.
START: What about the Hotz MIDI musical instrument?
Tramiel: The Hotz machine is truly an experiment. I hope it does very well. Unfortunately, I am not a musician- I play the stereo. My brother Leonard is a real musician. He taught himself. He's 'really into music a lot and Leonard thinks the thing is just amazing. He just loves it. This thing is radical, revolutionary it's a whole different concept. We're going to support it and give it a go.
START: It's difficult for people who haven't seen it to imagine how it works.
Tramiel: It's difficult even seeing it! You touch this pad and you do different things and all this great music comes out.
START: Any false rumors you'd like to put to rest?
Tramiel: There's a rumor I heard somewhere that my father is selling all his Atari stock. This became a serious rumor. And he's not.
START: So would you say now is a good time to buy Atari stock?
Tramiel: (laughs) I can't comment on that. It's against the SEC rules. But I'm not selling!
START: How many computers do you think you've sold in your lifetime?
Tramiel: I would guess well over 10 million. When I was at Commodore we were building 400,000 C64s a month for a couple of years.
START: How old were you when you started at Commodore?
Tramiel: My father started it when I was 8 years old. I used to work in the warehouses. I started sweeping floors and shipping goods. And then I worked my way up, working in every department in the company, literally. I started working full time when I was 22, in 1973.
START: One last thing. We'd like to arrange to take new photos of you.
Tramiel: Fine I have less hair now, so it's a whole different image (laughs)
Mard Naman is a freelance magazine and television writer and a
Contributing Editor of START
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