In a desperate act to save his failing calculator company, MITS company owner Ed Roberts begins building a small computer based on Intel's new 8080 chip, with plans to sell it for the unheard-of price of US$500. Roberts is able to buy 8080 chips from Intel for $75 each in large volume.
Despite being US$300,000 in debt, Ed Roberts is able to borrow an additional US$65,000 from the bank to complete work on what would become the Altair computer.
MITS completes the first prototype Altair 8800 microcomputer. His original name for the computer is "PE-8", in honor of the Popular Electronics magazine.
Ed Roberts decides that the programming language of his new microcomputer should be BASIC.
Railway Express loses Ed Robert's only prototype Altair computer, en route to New York for review and photography for publishing by Popular Electronics. MITS engineers create an empty Altair box with switches and lights on the front, send it to Les Solomon for display on the cover of Popular Electronics. Lauren Solomon, 12 year old daughter of Les Solomon, publisher of Popular Electronics, suggests the name "Altair" for Ed Robert's new microcomputer. Altair was the name of where Star Trek's Enterprise was going that night on TV. David Bunnell, MITS technical writer, suggests the name "Little Brother" for the new MITS computer. Popular Electronics publishes an article in its January 1975 issue by MITS announcing the Altair 8800 computer for US$397 in kit form, or US$439 assembled. It features a 2-MHz Intel 8080 processor, and 256 bytes of RAM. The Altair pictured on the cover of the magazine is actually a mock-up, as an actual computer was not available.
Paul Allen sees the Popular Electronics issue with the Altair story, and tells Bill Gates that the microcomputer revolution is just beginning. Bill Gates and Paul Allen contact Ed Roberts, saying they have a BASIC for the Intel 8080 processor. They propose licensing it for use on the Altair in exchange for royalty payments. They then spend the next eight weeks writing the software.