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The first entry-level home computer.txt
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Business Week
December 26, 1977, Industrial Edition
'The first entry-level home computer'
SECTION: TECHNOLOGY, Pg. 44c
LENGTH: 630 words
With the program cartridge and micro-processor pushing the video game in the
direction of a true home computer, the next step may have been taken last week when
little Umtech Inc., of Sunnyvale, Calif., introduced a product called VideoBrain.
Like a game, VideoBrain comes with joysticks and cartridges for playing war games,
blackjack, pinball, and checkers. But its typewriter-like keyboard can also be used
for sophisticated word games, math homework, and financial planning. And like a
computer, VideoBrain has expansion sockets that allow users to plug in cassette
tape units for more memory, telephone connections for data transmission, and even
additional processors to handle complex problems.
'Dynamite'
Since no programming skill is required to use VideoBrain, industry consultant
Robert F. Wickham calls it "the first entry-level home computer." He believes it is
the simplest machine --and at $500 one of the cheapest -- that can still be called a
computer. Adds a key West Coast department store buyer: "The positioning of the
product is very smart. It could be dynamite if the company can support it."
Albert Yu, Umtech's 36-year-old president, has no doubt about his ability to back
the VideoBrain with cash. The company is starting life with $2 million in cash and
another $2 million in reserve -- all furnished by Yu's father-in-law, Hong Kong
investor Chi-Ming Cha. "It's important to be well capitalized in this market," Yu
says. "We can build 50,000 to 75,000 units next year with no financial problem, and
if demand is higher than that, we can certainly supply more."
The main problem for the company, Yu concedes, will be to convince consumers that
Video-Brain is worth its price. "It is a video-game entry in some ways," says
marketing director Richard Melmon, "but people won't buy it just for the games,
because we're not selling it at a game price point." Umtech is counting heavily on
a library of preprogrammed applications that appeal to a wide >Technology/continued>
range of interests. "There is something for everyone," Yu claims.
The competitors
But Umtech will soon have competition in this new game-computer market. Atari Inc.
has plug-in slots to handle a keyboard and cassette memories in its programmable,
which it promises will be "more of a computer next year." Game maker Coleco
Industries Inc. plants to introduce a "bona fide computer" in January, and Texas
Instruments Inc. is widely reported to be studying a move in home computers.
Makers of small computers for the hobbyist also are aiming at a broader market. But
Yu points out that these require some understanding of computer programming. "Our
machine is the first computer that every member of the family can use," he says,
"regardless of their computer knowledge." Furthermore, points out Umtech cofounder
David H. Chung, VideoBrain can put 1,000 characters of text on a color TV screen.
"Our graphics are better than arcade graphics," he claims.
Considering their backgrounds, Yu and Chung might have been expected to start a
company making high-technology components rather than consumer products. Both are
Shanghai-born engineers with doctoral degrees from prestigious U.S. universities.
Yu helped develop advanced semiconductor memories at Intel Corp., while Chung, 46,
was in charge of microprocessor work at Fairchild Camera & Instrument Corp. And
both Intel and Fairchild stumbled in consumer products ventures.
But Umtech's founders think that they have learned from that experience. "It's a
mistake to take a large-scale integrated circuit, put a case around it, and ship it
like a component," says Chung. "For the home computer to succeed, the technology has
to go into a package that the consumer can really use."