Atari's final phase of computing includes the 16-bit 520ST, 1040ST, STacy Laptop, the 32-bit TT and Falcon, and the venerable Portfolio palmtop. The ST line of computers featured a custom version of Digital Research's GEM for it's graphical environment. DRI would forever be known as the company who "missed the boat" in 1981 when IBM came knocking for an OS for their new PC computer. That contract would go to Microsoft which catapulted them into riches and DRI into obscurity.
The actual operating system however would be a derivative of DRI's CP/M operating system modified by Atari and called "TOS." Some claim that TOS stands for "Tramiel Operating System" while others insist it means "The Operating System." Both monikers are still debated today and no one knows for sure what TOS stands for.
The Atari ST's main competition would come from it's 8-bit rival Commodore, in the form of the Amiga computers. (Incidentally, the Amiga was designed by former Atari engineers.) Atari beat Commodore to the market with it's 16-bit computers and I remember a quote from Jack Tramiel when asked about them. (Paraphrasing) "I saw nothing new from Commodore at the show."
The Atari ST is often berated for it's lack of graphics and sound capabilities, even though it was once the pinnacle of music development due to it's built-in MIDI (Musical Instrument Digital Interface) ports. Graphics for the ST were limited to 16 onscreen colors of a palette of 512 (later 4,096) and there was no built-in sprite hardware making game coding more difficult.
Atari ST with colour monitor
Atari ST with colour monitor and diskdrive
Atari ST with original box
Atari ST mouse
Motorola 68000 @ 8mhz
128KB (TOS 1.00)
Low: 320x200 - 16 colors (out a palette of 512 colors) Medium: 640x200 - 4 colors High: 640x400 - monochrome