The average family home. Cory practices her violin. Christian plays with his cars, and mike and carol worry over the bills. We went into the 1980s in pretty much the same technology thats been in place for a couple of decades. Typewriter. Calculators, tv, oven. A car. You listen to music on a big old stereo system with a turntable. Maybe you had a digital watch, and that was the only thing that was going to be digital that you actually owned. Hello . Im not here now, but my faithful machine is. There was a handful of technology at that time. One was the telephone answering machine. Youd be driving home and youd say, i cant wait to check my messages. You know, it had become part of the day. Honey, im checking my messages. From the noisy streets of new york to the laidback tranquility of california, americans are tuning out and tuning in. When i think of technology in the 1980s, i think of the walkman. The walkman was huge. Its the latest fad. Tiny stereo cassette players with featherweight headphones. Its like carrying your stereo with you, you know, on your head. The walkman took listening to music from a fixed location in your home to mobile. You are witnessing the ultimate miniaturization of the cassette player. Never has so much genius been coaxed into so little space. In all the great bursts of innovation, there is always some kind of scientific breakthrough that has to happen first. And none of this stuff could have happened in the 1980s without the transistor being invented in the late 1940s. And japan and sony in particular really understood this technology could make things smaller, more affordable, more versatile. Sony was the brand name that really mattered in the 1980s in technology. Ill take the sony the original sony walkman was so solid, it was a pleasure to hold. It had density, it had heft. The cassette, pop it in, close it. A very satisfying sound. Not just a click, click. It was a kathunk it was a gorgeous, gorgeous machine. It provided you with the soundtrack to your life. Transformers and Cabbage Patch dolls may be the two top toy sellers this year, but for adults theres only one hot item, the vcr. Christmas shoppers have again made the video cassette recorder one of the years hottest get gifts for grownups. But the vcr is a lot more than a popular christmas gift. Its an invention some say is changing the whole idea of television. There are so many inventions where you can track the success back to the smashing of a limitation, and the vcr smashed the limitation of time. Most people use vcrs for what they call time shifting. Lets say this sunday is your parents 50th wedding anniversary, but you cant miss the steelers. What you do is set the timer on your recorder, pop in a tape, and watch the steelers when you get home. It just changed the paradigm of television. The makers of tv programs and movies shown on television claim their films lose their rerun value when theyre recorded on home videotape recorders and then played later. The movie studios said this violated copyright laws and sued the home recorder manufacturers for allegedly instigating widespread in the home lawbreaking. You cannot have highclass entertainment if 50 million taping machines are out there in an unauthorized fashion with no compensation to owners, taking from them what rightfully belongs to them. The Supreme Court today answered a multibillion dollar business question affecting the wallets of millions of americans and one of the nations Fastest Growing forms of recreation. Home videotaping. The court ruled 54 that the use of machines to tape programs is legal and violates no copyright law. Not only did the movie industry lose that one but they were totally wrong. The vcr turned us into a nation of movie nuts. It may be the fastestgrowing business in america. The sale of video cassette tapes that people buy, or more often rent, to play at home on the or sell tapes of all kinds. You go to a video store and pick something out that you missed. In the old days, if you missed a movie, youd miss the movie. And the markets not restricted to blockbuster films. Jane fonda through her workout tapes has shown one can make money with a product geared specifically to the home video market. The success of cam corders marks the second phase of the video revolution. Not just taking movies home but making them at home. And anywhere else you happen to go. I was the kid who had a camcorder. It was the size of kentucky, and it had to be, because it played vhs cassettes. The setup can be used by just about anybody. Its advantage over film is about to revolutionize the industry. Theres no developing. You could rewind and record over it if you didnt like the take. That is an enormous shift. Americans buy billions of dollars of electronic equipment. Just when you think youve bought the latest in audio and video, theres a new generation of gear which has clearer pictures and better sound. This camera, using a simple little tape like that, just possibly the wave of the future. Pardon the interruption but this is big now with tmobile get the Samsung Galaxy s10e included with unlimited data for just 40 a month. Like them or not, video games are the youth phenomenon of our day. Quarter by quarter, 6 billion got fed into video game slots last year. Thats double what americans spent to go to the movies. People flock to them because the arcade game could afford expensive hardware at the time. And the hardware had enough power to do things wed never seen before. There was essentially an arcade in every mall, in every street corner. The lunch money was not safe if there was an arcade around. Arcade games at the time were the first machine that we could really interact with. We could cause a world to do something. So wed grab a joystick and move a character around or fire something at a spaceship. Weve never had experience like that before. The popularity of these video games is nothing short of a social phenomenon. Pac man is seemingly everywhere. Retailers cant keep the home version stocked. One dealer describes the demand. Phenomenal. Telephones ringing every five minutes. Its pac man mania. My big memory of the 80s was my best friend got this 300 console that connected to your tv. You just play this thing forever, and it was the first time anyone had ever seen anything but tv on a tv. And i thought, wow, this is technology. The imaginary rockets are controlled by the same chips the u. S. Army used in their defense programs. But the significance of the chip does not only lie in gadgets. Her whole future will be changed by the silicon chip business. It was discovered that you could actually etch a whole lot of transistors onto a piece of of silicon, which was basically a cheap substance that could be massmanufactured. These chips can control the flow of electrical current that in effect enables them to store and remember zillions of bits of information on a surface just a little bit thicker than an eggshell and smaller than a fingernail. This silicon chip supplies the brainpower for 1,001 electronic gadgets from wristwatches to microwave ovens. The mushrooming industry gives birth to a new hightech cult and a place called Silicon Valley. The magic part of Silicon Valley is that there was this boiling pot of people who were involved in technology, involved in science. Silicon valley was hp, sri, xerox park, and stanford university. That was a hell of a powerful combination. There was these two cultures, engineers with phds and hobbyists. It was a time when there was a lot of social ferment in and around the bay area. There was a lot of counterculture people. So you had cheap semiconductors. You had people that would look at things differently than what the conventional person was, and thats what the technology needed then. One of the things that was really hard about making a computer was now on a chip. So all of a sudden, people who had a thirst for this stuff could go out and buy a home brew computer. You could make them yourself. There was a lot of this kind of revolutionary thing with a lot of the technical people who were into the changes in technology and how we were a part of it. Even though at our companies we were generally the fringe element. We had the jeans and were not the managers and the leaders. But boy, just a Clever Design on its own had value. You had these guys like steve jobs and Steve Wozniak and bill gates and paul allen messing around on the edges of what would become the personal computer industry. But no one in Corporate America and no one in most of the homes of america thought that the personal computer was anything that would ever have, would ever even happen, let alone have any relevance to them. For all of us, the computer revolution was really exciting. It was like, wow, this is wide open. It was a group of people who want to make a change in the world. And eventually, the two forces in Silicon Valley, the hobbyists and the buttondown business guys, ended up coming together when the chipmakers realized the things that the hobbyists were doing could lead to this whole new kind of product called a personal computer. It was at a homegrown Computer Club where Steve Wozniak and steve jobs first displayed the computer theyd been working on. And it caused a sensation. We had absolutely no idea what people were going to do to these things when we started out. As a matter of fact, the two people who it was designed for was woz and myself, because we couldnt afford to buy a computer kit on the market. We got it working and showed it to some of our friends. And of course immediately everybody wanted one. Woz was the technical genius and jobs was the marketing genius. And you needed both of those kinds of mindsets to actually make this new Technology Work and create this company out of thin air called apple. Since the Apple Computer company was founded five years ago, its sales have skyrocketed from 100,000 to more than 100 million. With the most popular typewritersized computer on the market today. Steven jobs is now 26 years old and he sees his computers future as the future of mankind. How many calculators do you own . Two, maybe. Right. You use the Automatic Bank telling machines . Sure. So life is already seducing you into learning this stuff. Its not going to happen at once and its certainly not a 1984ish vision at all. Its just going to be very gradual and very human and will seduce you into learning how to use it. Random access memory is internal memory built inside of this computer. These new computers were rough, big, ugly, difficult to use inventions when they first came out. It would crash and you would have to figure out what to do. It would not always create the right results. So it really did take a mindset of someone willing to cut it some slack. Small steps, dont take big steps. Okay. Everybody kind of agreed this could be the next great thing after the Printing Press if we do it right. Its not just having a machine. The world needed to be made better. Those are the things that actually can lift a society into a new way of thinking. Industry experts say were no longer on the verge of the personal computer revolution. Were right in the midst of it, thank you. And its gathering steam with more and more people jumping aboard every day. I cant believe it. That were playing four on four with a barbershop quartet . [quartet singing] bum bum bum bum. Pass the ball. Pass the rock. Were open just pass the ball no, i cant believe how easy it was to save hundreds of dollars on my Car Insurance with geico. Yea. [quartet singing] shoot the j shoot, shoot, shoot the jaaaaaay. Believe it geico could save you fifteen percent or more on Car Insurance. Believe it geico could save you fifteen percent since youre heading off to dad. I just got a zerowater. But weve always used brita. Its two stagefilter. Doesnt compare to zerowaters 5stage. This meter shows how much stuff, or dissolved solids, gets left behind. Our tap water is 220. Brita . 110. Seriously . But zerowater let me guess. Zero . Yup, thats how i know it is the puresttasting water. I need to find the receipt for that. Oh yeah, you do. Why are all these Business Owners so excited . Were going to comcast. Its ahead of the game, ahead of the curve. Comcast business is for me. Its switch and save days at comcast business. Right now, get fast, reliable internet for 49. 95 a month and save 600 a year. Just one more way we take your business beyond. But hurry, switch and save days ends april 7th. I cant wait to go home and tell everyone about it. I just wanna get it right now. Guess what im gonna do. laughing call today. Comcast business. Beyond fast. In the early part of the 80s, the general image of the computer was always this giant machine with Little Things all over it. The mindset was the computer as the brain. And it was a threatening concept. The 1980s is a period of time when the big, impersonal, giant machine that lives in a huge, airconditioned room someplace suddenly becomes something that sits on your desk. Something is happening out there, something thats expanding your world. Small computers are happening. As soon as we have Intelligent Machines creeping into our daily lives, into our factories, into our hospitals, into our businesses, then its going to be a new world out there. Computer stores have become the neighborhood soda shops of the binary generation. The disciples, young and old, of smart machines. Companies that were starting to build personal computers, Companies Like atari, tandy, commodore, apple began to see them as a home market. And it was starting to seep into the public consciousness. Personal computers have become the business of at least 25 manufacturers, with three companies, radio shack, apple, and commodore, grabbing threequarters of the market. This personal computer costs about 1,400 and fits nicely on a desk corner. Duplicating its performance five years ago would have cost 75,000 and involve the unit the size of a large refrigerator. When the average american thought computer, they thought ibm. It made these Mainframe Computers that ran pretty much everything. Ibm was one of the most powerful corporations in america. And in technology, it was the most powerful company that had ever existed in technology. Because of this activity in personal computers, it started to make ibm look like it was somewhere behind the 8ball. They look at the apple ii and say, huh, we could build one of those. We built computers that put men on the moon. Well get that business, squash these guys, no problem. Ibm, International Business machines, has entered the small Computer Market for the first time. The idea of the small computer has become so big that the giant of computer companies, ibm, is busy marketing its new small computer. It will, they say, give credibility to home computers. Theyll no longer be just another new gadget. Ibm has set an objective to build the office of the future. Before ibm came in, companies would not think about buying personal computers, but suddenly, when ibms selling one, now it becomes a safer decision. Ibms personal computer is designed for office, school or home use, aimed at exactly the same market as its competitors. When ibm started developing the ibm pc, it needed an operating system. And this young guy named bill gates had started this tiny Little Company called microsoft. Bill gates was that unusual combination of a tech guy who was as good as the best tech guys, but he also had a business sense, and he had a business vision. At the time, everyone was making it up as they went along. There was nothing that came before it. There was no personal computer industry. So when gates said to ibm, how about this, well write you an operating system for your pc, and well get a cut of every machine you sell. And in addition, he made sure that it was not an exclusive license. That he was going to be able to sell this software to ibm, but he was also going to be able to sell the same software to other people. Because gates intuited that there were going to be people that would build knockoffs of ibm and the pc clones. It was a genius move by bill gates, who was still in his early 20s when he makes this decision. And youve got these guys at ibm in blue shirts and dark ties looking at this Company Microsoft and saying, who cares . Software, who cares about software . Man, we build these big machines. Ibm did not realize it was essentially handing all this power to this little nerd. If you had stayed at harvard a few more years, would this computer revolution have passed you by . Perhaps. Things move very quickly in the industry, and it was really the urgency to get out there and be the first one to put a basic on the microcomputer that caused me to drop out. If you dont have one, you will be amazed what these little gadgets can do. The idea was that ordinary people might have a use for computers. Now, it took a while to figure out what those uses might be. The main thing was spreadsheets and word processing. The computer was the best typewriter you could ever have. It gave you a new way to write. You could change things around. And check your spelling. It would always look perfect. My dad had the large ledger sheets, done them all by hand, and i remember taking a computer to show him the spreadsheet. And suddenly, he understood the value of a personal computer. There was a drastic mindset change in the whole country about what a computer was. And happened over a very short period of time. Gather around and well tell you a lit bit more about the system. Here at the west coast computer fair, the speed of development in this industry is so great that each fair virtually outdates the previous one. Well, it is lower prices that have helped the tremendous boom in home computer sales, about one home in ten will have a computer by the end of this year. By 1990, the number could be two out of three. We knew that the personal computer was getting serious when the competition started. Because when you have competition, innovation gets stimulated. Compaq. Atari home computer. Kaypro gives you the complete computer. This is the one. Higher resolution. Great other expandability than ibms pc. Ibms entry heated up an already volatile market. One industry innovator, osborne computer, was forced into B