MOS's earlier 6501 could be plugged into existing motherboards that used the Motorola 6800, allowing potential users to get a development system up and running very easily using existing hardware. This enranged Motorola, who immediately sued, forcing MOS to pull the 6501 from the market. Changing the pin layout produced the "lawsuit-friendly" 6502. Otherwise identical to the 6501, it nevertheless had the disadvantage of having no machine in which new users could quickly start playing with the CPU. Chuck Peddle, leader of the 650x group at MOS, designed the KIM-1 in order to fill this need.
While the machine was originally intended to be used by engineers, it quickly found a large audience with hobbyists. A complete system could be constructed for under $500 with the purchase of the kit for only $245, and then adding a used terminal and a cassette tape drive. Many books were available demonstrating small assembler programs for the KIM. One demo program converted the KIM into a music box by toggling a software controllable output bit connected to a small loudspeaker. As the system became more popular one of the common additions was the BASIC programming language. This required the use of the 8kB memory expansion and was loaded off of tape – a 15 minute ordeal.
Rockwell International[?] also released a version of the KIM in 1976, known as the AIM 65[?]. This was essentially an expanded KIM with a small cash register printer and a full ASCII keyboard. The AIM also had a bigger LED display that could display a single line of text. The BASIC was also included in ROM.
Not long after the KIM's introduction, MOS Technologies was purchased by Commodore International and production of the original KIM ended. At Commodore Chuck Peddle started work on an expanded version, with a full built in keyboard, cassette tape drive, and monitor. The monitor was driven by a new built-in display driver chip, meaning no terminal was required. The ROM was expanded to include the BASIC as well, so the machine was up and running as soon as the power was turned on. The result was the Commodore PET.
The KIM-1 consisted of a single printed circuit board with all the circuitry on one side. It included three main ICs; the 6502 CPU, and two 6530s containing 1k of ROM, 64 bytes of RAM, and several input/output lines. An additional 1k (which they described as "a full 1024 bytes") of RAM was included in separate ICs. Also included were six seven-segment LEDs (like on a calculator) and a 24-key calculator-type keyboard. Many of the pins of the I/O portions of the 6530's was connected to two connectors on the edge of the board, where they could be used as a serial system for driving a terminal or paper tape. One of these connectors also doubled as the power supply connector, and included analog lines that could be attached to a cassette tape recorder.
Earlier microcomputer systems used a series of switches on the front of the machine to enter data. In order to do anything useful, the user had to enter a small program known as the "bootstrap loader" into the machine using these switches. Once loaded, the loader would be used to load a larger programs off of a storage device like paper tape. It would often take upwards of five minutes to load the tiny program into memory, and a single error while flipping the switches meant that the bootstrap loader would crash the machine.
The KIM-1 included a somewhat more complex bootstrap loader called TIM burned into the two 1k ROMs, this is the "monitor" the name refers to. It included the ability to run a cassette tape for storage, drive the LED "display", and run the keyboard. As soon as the power was turned on the monitor would load and the user could immediately start interacting with the machine via the keyboard. Pretty much the only thing that the KIM didn't include was a case, which explains its popularity with hobbyists.