The Atari 1053 prototype looked identical to the Atari 1050, except for the labeling and the FD mechanism, but had a 360 KB capacity (borrowed from the PC) and was backwards compatible with the Atari 1050 and 810 floppy disk drives. In fact, this device was developed only as an afterthought. It appears to have been a solution to some of the 1050's problems, which, according to available information, Tandon was unwilling to address, and was intended as a response to this approach by some enterprising Atari employees.

The motherboard is very similar to that of the Atari XF551 (and therefore used the same floppy disk drive mechanism), although it used different components—a different processor (8039 or 8049) and a different floppy disk controller (WD2797).

It is highly likely that this device served as the starting point for the design and subsequent creation of the Atari XF551.