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The Hayes Smartmodem is a family of smart modems developed by Hayes Microcomputer Products that took the computer world by storm in 1981. It allowed for the interconnection of thousands of computer enthusiasts, a number that was considered staggering at that time, through online bulletin boards (BBS) and online user networks (usenets) such as CompuServe. The Smartmodem was a major step in the right direction as modems prior to it were expensive and very slow.
The Hayes Smartmodem was the brainchild of Dennis Hayes and Dale Heatherington, who were both frustrated with expensive and slow modems that communicated over analog lines at 300 bps, which is well below reading speed. These modems also used bulky acoustic couplers that required the user to dial a specified number on a telephone and then place the handset into ports on top of the modem. Their answer to this problem is the Smartmodem, an intelligent modem that used a Z8 microprocessor at its heart and communicated to the computer via the industry RS-232 serial port standard, something which all computers at the time had. It could be programmed to answer calls and dial numbers automatically through simple string control characters via the serial port. Another big difference is the price point — they sold it at only $299, and it quickly became the industry standard.
The Hayes Smartmodem has two states: command and online states. In the command state, the modem interprets data coming from the computer as commands so that it can be instructed to answer calls, hang up or dial numbers. Online or data mode was the standard modem mode where data coming from the computer is modulated and sent over the line, while received data is demodulated and sent to the computer.