The invention: Originally a trade name of the IBM Corporation, “personal computer” has become a generic term for increasingly powerful desktop computing systems using microprocessors.
The people behind the invention: Tom J. Watson, (1874-1956), the founder of IBM, who set
corporate philosophy and marketing principles Frank Cary (1920- ), the chief executive officer of IBM at the
time of the decision to market a personal computer John Opel (1925- ), a member of the Corporate Management
Committee
George Belzel, a member of the Corporate Management Committee
Paul Rizzo, a member of the Corporate Management Committee Dean McKay (1921- ), a member of the Corporate
Management Committee William L. Sydnes, the leader of the original twelve-member
design team
Shaking up the System
For many years, the International Business Machines (IBM) Corporation had been set in its ways, sticking to traditions established by its founder, Tom Watson, Sr. If it hoped to enter the new microcomputer market, however, it was clear that only nontraditional methods would be useful. Apple Computer was already beginning to make inroads into large IBM accounts, and IBM stock was starting to stagnate on Wall Street. A1979 Business Week article asked: “Is IBM just another stodgy, mature company?” The microcomputer market was expected to grow more than 40 percent in the early 1980′s, but IBM would have to make some changes in order to bring a competitive personal computer (PC) to the market.
The decision to build and market the PC was made by the company’s Corporate Management Committee (CMC). CMC members included chief executive officer Frank Cary, John Opel, George
Belzel, Paul Rizzo, Dean McKay, and three senior vice presidents. In July of 1980, Cary gave the order to proceed. He wanted the PC to be designed and built within a year. The CMC approved the initial design of the PC one month later. Twelve engineers, with William L. Sydnes as their leader, were appointed as the design team. At the end of 1980, the team had grown to 150.
Most parts of the PC had to be produced outside IBM. Microsoft Corporation won the contract to produce the PC’s disk operating system (DOS) and the BASIC (Beginner’s All-purpose Symbolic Instruction Code) language that is built into the PC’s read-only memory (ROM). Intel Corporation was chosen to make the PC’s central processing unit (CPU) chip, the “brains” of the machine. Outside programmers wrote software for the PC. Ten years earlier, this strategy would have been unheard of within IBM since all aspects of manufacturing, service, and repair were traditionally taken care of in-house.
Marketing the System
IBM hired a New York firm to design a media campaign for the new PC. Readers of magazines and newspapers saw the character of Charlie Chaplin advertising the new PC. The machine was delivered on schedule on August 12,1981. The price of the basic “system unit” was $1,565. A system with 64 kilobytes of random access memory (RAM), a 13-centimeter single-sided disk drive holding 160 kilobytes, and a monitor was priced at about $3,000. A system with color graphics, a second disk drive, and a dot matrix printer cost about $4,500.
Many useful computer programs had been adapted to the PC and were available when it was introduced. VisiCalc from Personal Software—the program that is credited with “making” the microcomputer revolution—was one of the first available. Other packages included a comprehensive accounting system by Peachtree Software and a word processing package called Easy writer by Information Unlimited Software.
As the selection of software grew, so did sales. In the first year after its introduction, the IBM PC went from a zero market share to 28 percent of the market. Yet the credit for the success of the PC does not go to IBM alone. Many hundreds of companies were able to produce software and hardware for the PC. Within two years, powerful products such as Lotus Corporation’s 1-2-3 business spreadsheet had come to the market. Many believed that Lotus 1-2-3 was the program that caused the PC to become so phenomenally successful. Other companies produced hardware features (expansion boards) that increased the PC’s memory storage or enabled the machine to “drive” audiovisual presentations such as slide shows. Business especially found the PC to be a powerful tool. The PC has survived because of its expansion capability.
IBM has continued to upgrade the PC. In 1983, the PC/XT was introduced. It had more expansion slots and a fixed disk offering 10 million bytes of storage for programs and data. Many of the companies that made expansion boards found themselves able to make whole PCs. An entire range of PC-compatible systems was introduced to the market, many offering features that IBM did not include in the original PC. The original PC has become a whole family of computers, sold by both IBM and other companies. The hardware and software continue to evolve; each generation offers more computing power and storage with a lower price tag.
CONSEQUENCES
IBM’s entry into the microcomputer market gave microcomputers credibility. Apple Computer’s earlier introduction of its computer did not win wide acceptance with the corporate world. Apple did, however, thrive within the educational marketplace. IBM’s name already carried with it much clout, because IBM was a successful company. Apple Computer represented all that was great about the “new” microcomputer, but the IBM PC benefited from IBM’s image of stability and success.
IBM coined the term personal computer and its acronym PC. The acronym PC is now used almost universally to refer to the microcomputer. It also had great significance with users who had previously used a large mainframe computer that had to be shared with the whole company. This was their personal computer. That was important to many PC buyers, since the company mainframe was perceived as being complicated and slow. The PC owner now had complete control.
See also Apple II computer; BINAC computer; Colossus computer; ENIAC computer; Floppy disk; Hard disk; IBM Model 1401 computer; Internet; Supercomputer; UNIVAC computer.
