The IBM Personal Computer, commonly known as the IBM PC, is the original version and progenitor of the IBM PC compatible hardware platform. It is IBM model number 5150, and was introduced on August 12, 1981. It was created by a team of engineers and designers under the direction of Don Estridge of the IBM Entry Systems Division in Boca Raton, Florida.

The generic term "personal computer" was in use before 1981, applied as early as 1972 to the Xerox PARC's Alto, but because of the success of the IBM Personal Computer, the term "PC" came to mean more specifically a desktop microcomputer compatible with IBM's PC products. Within a short time of the introduction, third-party suppliers of peripheral devices, expansion cards, and software proliferated; the influence of the IBM PC on the personal computer market was substantial in standardizing a platform for personal computers. "IBM compatible" became an important criterion for sales growth; only the Apple Macintosh family kept significant market share without compatibility with the IBM personal computer.

International Business Machines (IBM), one of the world's largest companies, had a 62% share of the mainframe computer market in 1981.[1] Its share of the overall computer market, however, had declined from 60% in 1970 to 32% in 1980.[2] Perhaps distracted by a long-running antitrust lawsuit, the "colossus of Armonk" completely missed the fast-growing minicomputer market during the 1970s,[3][4] and was behind rivals such as Wang, Hewlett-Packard, and Control Data in other areas. In 1979 BusinessWeek asked "Is IBM just another stodgy, mature company?"[2]

By 1981 IBM's stock price had declined by 22%.[2] Its earnings for the first half the year grew by 5.3%one third of the inflation ratewhile those of minicomputer maker Digital Equipment Corporation (DEC) grew by more than 35%.[5] The company began selling minicomputers, but in January 1982 the United States Department of Justice ended the antitrust suit because, The New York Times reported, the government "recognized what computer experts and securities analysts had long since concluded: I.B.M. no longer dominates the computer business".[1][6]

IBM wished to avoid the same outcome with the new personal computer industry,[4] dominated by the Commodore PET, Atari 8-bit family, Apple II, Tandy Corporation's TRS-80, and various CP/M machines.[7] With $150 million in sales by 1979 and projected annual growth of more than 40% in the early 1980s, the microcomputer market was large enough for IBM's attention. Other large technology companies such as Texas Instruments and Data General had entered it, and some large IBM customers were buying Apples,[2][8] so the company saw introducing its own personal computer as a defense against rivals, large and small.[3]

In 1980 and 1981 rumors spread of an IBM personal computer, perhaps a miniaturized version of the IBM System/370,[9] while Matsushita acknowledged that it had discussed with IBM the possibility of manufacturing a personal computer for the American company.[10] The Japanese project, codenamed "Go", ended before the 1981 release of the American-designed IBM PC codenamed "Chess", but two simultaneous projects further confused rumors about the forthcoming product.[11]

Whether IBM had waited too long to enter an industry Apple and others were already successful in was unclear.[5][2] Data General and Texas Instruments' small computers were not very successful. Historically IBM was used to selling products that were developed over several years and which cost as much as the annual sales of a successful microcomputer company. They had to learn how to quickly mass-produce and market new computers.[8] Observers expected AT&T to soon enter the computer industry, and other large companies such as Exxon, Montgomery Ward, Pentel and Sony were designing their own microcomputers.[12]

An observer stated that "IBM bringing out a personal computer would be like teaching an elephant to tap dance."[13] Its least expensive computer was $15,000, the company only sold through its internal sales force and had no experience with resellers or retail stores,[4][14][15] and it did not introduce the first product designed to work with non-IBM equipment until 1980.[5] While it traditionally let others pioneer a new market, the personal-computer development and pricing cycles were much faster than for mainframes, with products becoming obsolete quickly.[2] Another observer claimed that IBM made decisions so slowly that, when tested, "what they found is that it would take at least nine months to ship an empty box".[16]

Many in the microcomputer industry resented IBM's power and wealth, and disliked the perception that a company so staid that it had its own employee songbook would legitimize a market founded by startups.[17][16] The potential importance to microcomputers of a company so prestigious, that a popular saying in American companies stated "No one ever got fired for buying IBM", was nonetheless clear.[18][11][19]InfoWorld, which described itself as "The Newsweekly for Microcomputer Users", stated that "for my grandmother, and for millions of people like her, IBM and computer are synonymous".[20]BYTE ("The Small Systems Journal") stated in an editorial[11] just before the announcement of the IBM PC:

Rumors abound about personal computers to come from giants such as Digital Equipment Corporation and the General Electric Company. But there is no contest. IBM's new personal computer ... is far and away the media star, not because of its features, but because it exists at all. When the number eight company in the Fortune 500 enters the field, that is news ... The influence of a personal computer made by a company whose name has literally come to mean "computer" to most of the world is hard to contemplate.

Read the rest here:
IBM Personal Computer - Wikipedia, the free encyclopedia