Neither. And in fact, I did not figure this out, but rather Peter did:


Nevertheless, issues like these are common for someone who is new in the field; I have frequently been asked similar questions by my students.


Well, from the discussion here, I am guessing that you are probably new to microcontrollers and embedded systems. To become effective with them, you have to start on simple projects and then work on ones with gradually increasing complexity. You will need the experience gained on previous projects to complete more challenging ones. Although there are theoretical fundamentals you must understand, there is absolutely no substitute for hands-on practical experience in embedded system development. So, you're on the right track.

You are right that this is a relatively simple circuit. Most embedded systems are going to require designs significantly more complicated than the one we have been discussing, and often also require application domain specific knowledge to design. Although 8052 class microcontrollers are still widely used in industry (look at the activity on this forum and the incredible array of derivatives that are on the market), the principles and techniques you are learning working with them are very applicable to other architectures as well.

--Sasha Jevtic