In July 1986, the company announced an
IBM PC compatible, the Blue Chip Personal Computer, to be released in October. Although some
mail order companies were offering lower-priced systems, Blue Chip's clone was expected to be the lowest-priced system sold through retail channels. Blue Chip hired an unnamed company in Japan to design the computer and
Hyundai Electronics in South Korea to
manufacture it. The Blue Chip PC became the second Korean-made personal computer system marketed in the United States, after
Leading Edge's
Model D in 1985, built by
Daewoo. Hyundai Electronics had been founded earlier in 1983 to market the
parent company's computer hardware directly to resellers abroad. Other
chaebols at the time relied on the
white-label market, signing contracts with companies abroad to be their
original equipment manufacturer (OEM), in exchange for their products being rebranded and rebadged. Hyundai's first attempt at selling hardware under their name in the West had been largely unsuccessful; its competitors Daewoo and
Samsung, on the other hand, had become well-entrenched in the American computer market from their white-label partnerships with U.S.-based resellers. Although Hyundai's higher-ups continued to push for the Hyundai name to become a household name for computer hardware the United States, the company decided to relent by finding a suitable American reseller for their computer systems. In the mid-1980s, Blue Chip was seeking a manufacturer for its Commodore-compatible printers. When Rossi chose Hyundai as a candidate, Hyundai hinted at plans to develop its own IBM PC clone. Upon hearing this, Rossi convinced Hyundai executives to sell the computer under the Blue Chip name. In February 1986, Rossi met with Hyundai's Sung-hee Lee to formally sign the contract between the two companies. Under their contract, Blue Chip was the exclusive seller of computers manufactured by Hyundai. The Blue Chip PC has an
Intel 8088 microprocessor running at 4.77 MHz, 512 KB of
RAM (supporting up to 640 KB), six expansion slots, one 5.25-inch floppy drive, a high-resolution Hercules-compatible monochrome graphics card, and serial and parallel ports built into the motherboard. The base configuration originally retailed for US$699, the cheapest PC clone sold through
department stores at the time, according to the
Los Angeles Times. A green- or amber-phosphor monochrome monitor was sold separately for US$89. The Blue Chip PC was intended to be bundled with
MS-DOS 3.2 as part of its base configuration. However, on launch, this was sold separately, along with
GW-BASIC, for US$100. Blue Chip contracted the manufacturing of 120,000 units of the computer to Hyundai in July and had several department stores on board to sell all units, including
Target and
Caldor. In the next month, the company chose these two stores as test markets for the computer. Rossi expected interest from the educational sector to exceed that from retail customers. However, 80 percent of purchases during this test run came from small businesses based in
home offices, who sought a computer at around US$700 that they could buy from stores. Following this realization, Rossi began focusing Blue Chip's marketing exclusively on the home office segment, becoming one of the first PC vendors to do so. Blue Chip nearly doubled the number of units for Hyundai to manufacture, with Rossi expecting to sell up to 200,000 units by the next year, while Hyundai expected up to a quarter of a million units sold. On its launch in October, the Blue Chip PC was stocked in over 500 department stores across the continental United States, including Target, Caldor,
Sears,
Venture,
Federated Group, and
Fedco, as well as select
Walmart,
Save Mart, and
Toys "R" Us stores. Blue Chip supported the launch with a radio advertising campaign devised by WFC Advertising of Phoenix, Arizona. Meanwhile,
Hyundai Motor Company was becoming established in the United States with its low-cost cars during the mid-1980s, and Rossi expressed interest in tying future versions of the computer with the Hyundai name. From September to November, 27,000 units of the Blue Chip PC were sold. Although disappointed that this was only roughly a quarter of their expected sales, they remained optimistic and projected a total of 50,000 units sold by the end of 1986. While they expressed doubt that this would turn much of a profit, they anticipated higher returns from successors of the Blue Chip PC being sold at higher prices. Meanwhile, Blue Chip was concerned about its lack of a repair service network and skilled sales force. The company sought to rectify the latter by educating retail salespeople through seminars, training videos, and a floppy disk that demonstrated the computer's strengths. The company also hired Bryan Kerr, previously the director of marketing for the Tramiel-led
Atari Corporation, as vice-president of marketing and sales in late November. By November 1986, Blue Chip had 20 employees at its Chandler office, all of which were executives in specialist positions. That month the company introduced the Blue Chip PC AT, an
AT-compatible with an
Intel 80286 running at a user-switchable 8- or 10-MHz clock speed, 1 MB of RAM (expandable to 16 MB), a single 1.2 MB 5.25-inch floppy drive, an optional 40- or 80-MB hard disk drive, integrated
EGA graphics, a 12-inch monochrome monitor, and keyboard. Its base configuration retailed for US$1895. In February 1987, Hyundai bought an undisclosed minority portion of interest in Blue Chip. In spite of market apathy early in the year even after steep price cuts to the Blue Chip PC and AT, Blue Chip and Hyundai pressed forward in May 1987 to develop the Blue Chip PC Popular, also based on the IBM PC but with a lower initial retail price of . Blue Chip included with the PC Popular a keyboard, mouse, and other
value-adds but still sold the monitor separately. A month later the company announced the PC Turbo, featuring similar specifications to its first computer including six expansion slots, but now with an 8088 processor with a clock speed switchable between and and a hard drive. In mid-1987, Blue Chip introduced their original blue Chip PC in the United Kingdom to compete with
Amstrad and their low-cost
PCW series. ==1987–1990: Breakup with Hyundai and acquisition==