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A microcomputer is a small, relatively inexpensive computer with a microprocessor as its central processing unit (CPU). It includes a microprocessor, memory, and input/output (I/O) facilities. Microcomputers became popular in the 1970s and 80s with the advent of increasingly powerful microprocessors. The predecessors to these computers, mainframes and minicomputers, were comparatively much larger and more expensive (though indeed present-day mainframes such as the IBM System z machines use one or more custom microprocessors as their CPUs). Many microcomputers (when equipped with a keyboard and screen for input and output) are also personal computers (in the generic sense).
The abbreviation micro was common during the 1970s and 1980s, but has now fallen out of common usage.
The term microcomputer came into popular use after the introduction of the minicomputer, although Isaac Asimov used the term microcomputer in his short story "The Dying Night" as early as 1956 (published in The Magazine of Fantasy and Science Fiction in July that year). Most notably, the microcomputer replaced the many separate components that made up the minicomputer's CPU with one integrated microprocessor chip. The French developers of the Micral N (1973) filed their patents with the term "Micro-ordinateur", a literal equivalent of "Microcomputer", to designate the first solid state machine designed with a microprocessor. In the USA, the earliest models such as the Altair 8800 were often sold as kits to be assembled by the user, and came with as little as 256 bytes of RAM, and no input/output devices other than indicator lights and switches, useful as a proof of concept to demonstrate what such a simple device could do. However, as microprocessors and semiconductor memory became less expensive, microcomputers in turn grew cheaper and easier to use:
All these improvements in cost and usability resulted in an explosion in their popularity during the late 1970s and early 1980s. A large number of computer makers packaged microcomputers for use in small business applications. By 1979, many companies such as Cromemco, Processor Technology, IMSAI, North Star Computers, Southwest Technical Products Corporation, Ohio Scientific, Altos Computer Systems, Morrow Designs and others produced systems designed either for a resourceful end user or consulting firm to deliver business systems such as accounting, database management, and word processing to small businesses. This allowed businesses unable to afford leasing of a minicomputer or time-sharing service the opportunity to automate business functions, without (usually) hiring a full-time staff to operate the computers. A representative system of this era would have used an S100 bus, an 8-bit processor such as an Intel 8080 or Zilog Z80, and either CP/M or MP/M operating system. The increasing availability and power of desktop computers for personal use attracted the attention of more software developers. In time, and as the industry matured, the market for personal computers standardized around IBM PC compatibles running DOS, and later Windows. Modern desktop computers, video game consoles, laptops, tablet PCs, and many types of handheld devices, including mobile phones, pocket calculators, and industrial embedded systems, may all be considered examples of microcomputers according to the definition given above.
Everyday use of the expression "microcomputer" (and in particular the "micro" abbreviation) has declined significantly from the mid-1980s and has declined in commonplace usage since 2000. The term is most commonly associated with the first wave of all-in-one 8-bit home computers and small business microcomputers (such as the Apple II, Commodore 64, BBC Micro, and TRS 80). Although, or perhaps because, an increasingly diverse range of modern microprocessor-based devices fit the definition of "microcomputer," they are no longer referred to as such in everyday speech.
In common usage, "microcomputer" has been largely supplanted by the term "personal computer" or "PC," which specifies a computer that has been designed to be used by one individual at a time, a term first coined in 1959. IBM first promoted the term "personal computer" to differentiate themselves from other microcomputers, often called "home computers", and also IBM's own mainframes and minicomputers . However, following its release, the IBM PC itself was widely imitated, as well as the term. The component parts were commonly available to producers and the BIOS was reverse engineered through cleanroom design techniques. IBM PC compatible "clones" became commonplace, and the terms "personal computer," and especially "PC" stuck with the general public.
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Monitors, keyboards and other devices for input and output may be integrated or separate. Computer memory in the form of RAM, and at least one other less volatile, memory storage device are usually combined with the CPU on a system bus in one unit. Other devices that make up a complete microcomputer system include batteries, a power supply unit, a keyboard and various input/output devices used to convey information to and from a human operator (printers, monitors, human interface devices). Microcomputers are designed to serve only one user at a time, although they can often be modified with software or hardware to concurrently serve more than one user. Microcomputers fit well on or under desks or tables, so that they are within easy access of users. Bigger computers like minicomputers, mainframes, and supercomputers take up large cabinets or even dedicated rooms.
A microcomputer comes equipped with at least one type of data storage, usually RAM. Although some microcomputers (particularly early 8-bit home micros) perform tasks using RAM alone, some form of secondary storage is normally desirable. In the early days of home micros, this was often a data cassette deck (in many cases as an external unit). Later, secondary storage (particularly in the form of floppy disk and hard disk drives) were built into the microcomputer case.
Although they did not contain any microprocessors, but were built around transistor-transistor logic (TTL), Hewlett-Packard calculators as far back as 1968 had various levels of programmability such that could be called microcomputers. The HP 9100B (1968) had rudimentary conditional (if) statements, statement line numbers, jump statements (go to), registers that could be used as variables, and primitive subroutines. The programming language resembled Assembly language in many ways. Later models incrementally added more features, including the BASIC programming language (HP 9830A in 1971). Some models had tape storage and small printers. However, displays were limited to one line at a time.  The HP 9100A was referred to as a personal computer in an advertisement in a 1968 Science magazine, but that advertisement was quickly dropped. It is suspected[who?] that HP was reluctant to call them "computers" because it would complicate government procurement and export procedures.
The Datapoint 2200, made by CTC in 1970, is perhaps the best candidate for the title of "first microcomputer". While it contains no microprocessor, the instruction set of its custom TTL processor was the basis of the instruction set for the Intel 8008, and for practical purposes the system behaves approximately as if it contains an 8008. This is because Intel was the contractor in charge of developing the Datapoint's CPU, but ultimately CTC rejected the 8008 design because it needed 20 support chips.
Another early system, the Kenbak-1, was released in 1971. Like the Datapoint 2200, it used discrete transistor–transistor logic instead of a microprocessor, but it functioned like a microcomputer in most ways. It was marketed as an educational and hobbyist tool, but it was not a commercial success; production ceased shortly after introduction.
In 1972, a French team headed by François Gernelle within a small company, Réalisations & Etudes Electroniqes (R2E), developed and patented a computer based on a microprocessor – the Intel 8008 8-bit microprocessor. This Micral-N was marketed in early 1973 as a "Micro-ordinateur" or microcomputer, mainly for scientific and process-control applications. About a hundred Micral-N were installed in the next two years, followed by a new version based on the Intel 8080. Meanwhile, another French team developed the Alvan, a small computer for office automation which found clients in banks and other sectors. The first version was based on LSI chips with an Intel 8008 as peripheral controller (keyboard, monitor and printer), before adopting the Zilog Z80 as main processor.
In 1972, a Sacramento State University team led by Bill Pentz built the Sac State 8008 computer, able to handle thousands of patients' medical records. The Sac State 8008 was designed with the Intel 8008. It had a full set of hardware and software components: a disk operating system included in a series of programmable read-only memory chips (PROMs); 8 Kilobytes of RAM; IBM's Basic Assembly Language (BAL); a hard drive; a color display; a printer output; a 150 bit/s serial interface for connecting to a mainframe; and even the world's first microcomputer front panel.
Virtually all early microcomputers were essentially boxes with lights and switches; one had to read and understand binary numbers and machine language to program and use them (the Datapoint 2200 was a striking exception, bearing a modern design based on a monitor, keyboard, and tape and disk drives). Of the early "box of switches"-type microcomputers, the MITS Altair 8800 (1975) was arguably the most famous. Most of these simple, early microcomputers were sold as electronic kits—bags full of loose components which the buyer had to solder together before the system could be used.
The period from about 1971 to 1976 is sometimes called the first generation of microcomputers. These machines were for engineering development and hobbyist personal use. In 1975, the Processor Technology SOL-20 was designed, which consisted of one board which included all the parts of the computer system. The SOL-20 had built-in EPROM software which eliminated the need for rows of switches and lights. The MITS Altair just mentioned played an instrumental role in sparking significant hobbyist interest, which itself eventually led to the founding and success of many well-known personal computer hardware and software companies, such as Microsoft and Apple Computer. Although the Altair itself was only a mild commercial success, it helped spark a huge industry.
By 1977, the introduction of the second generation, known as home computers, made microcomputers considerably easier to use than their predecessors because their predecessors' operation often demanded thorough familiarity with practical electronics. The ability to connect to a monitor (screen) or TV set allowed visual manipulation of text and numbers. The BASIC language, which was easier to learn and use than raw machine language, became a standard feature. These features were already common in minicomputers, with which many hobbyists and early produces were familiar.
In 1979, the launch of the VisiCalc spreadsheet (initially for the Apple II) first turned the microcomputer from a hobby for computer enthusiasts into a business tool. After the 1981 release by IBM of its IBM PC, the term personal computer became generally used for microcomputers compatible with the IBM PC architecture (PC compatible).