Personal Computers

In terms of mass-market potential, the problem with the microcomputer industry in the late 1970s was the proliferation of incompatible machines. No company was able to establish a sufficiently large market share to shape the direction of microcomputer production. IBM initially adopted a disdainful approach to the nascent microcomputer industry. However, once the demand for single-user computers became evident, IBM entered the market in 1981 with the launch of the 5150 PC. The key features of this IBM PC were an Intel 16-bit microprocessor, 64K RAM, and the Microsoft Disk Operating System (MS-DOS). IBM appropriated the term “personal computer,” which—shortened to PC—became used to describe the system architecture. Reputation, marketing channels, and immense research and development resources soon gave IBM a decisive competitive edge in the business market, in spite of its relatively high prices. In 1983, IBM introduced an upgraded PC, the 5160 PC XT, which had a hard-disk drive as well as a floppy-disk drive, and the cheaper IBM PC jr, aimed at the home consumer. (The floppy disk had been introduced as a convenient portable storage medium in 1971.) By the end of 1983, IBM had sold 800,000 PCs. In 1984 came the IBM 5170 PC AT, which introduced the 16-bit ISA (industry standard architecture) data bus, which accelerated the flow of data.

PC architecture was soon cloned by other companies to create a range of IBM-compatible models. At first, would-be imitators had to use the practice of “reverse engineering,” whereby they deconstructed an IBM PC to analyze its technical design. This became unnecessary when IBM decided to publish its system architecture in order to encourage software companies to develop PC applications and thus stimulate the growth of PC ownership. While IBM achieved its goal of making the PC the industry standard for microcomputers, it lost out in terms of computer sales to companies making cheaper clones. For example, the British Amstrad PC1512 personal computer, introduced in 1986, was both cheaper and faster than the IBM PC. In the United States, Compaq, a spin-off from Texas Instruments, was so successful with its IBM clones that in 1986 it superseded Apple as the fastest-growing American corporation ever.