It wasn’t the first personal computer. Nor was it the most advanced. But shortly after the IBM ® Personal Computer arrived in 1981, it became the leading platform in the revolution that brought computing out of the glass house and into daily life.
But it almost didn’t happen. When the concept first came up at IBM corporate headquarters, a senior executive asked the simple question: “Why would anyone want to take a computer home with them?”
In the late 1970s, when the office closed, you turned off your terminal—if you had one—and went home. If you had work to finish up in the evening, you carried a briefcase filled with papers. You had a pencil or a typewriter to work with, and if you didn’t know how to spell a word, you used a dictionary. Back then, you were the app.
A handful of aggressive young companies set out to take computing out of back offices and give it to the people. Commodore, Apple, Tandy, Atari and Digital Research had been putting together the pieces that make up a personal computer: a microprocessor (a central processing unit on a single chip), a BIOS (the system boot code), read-only memory (usually a solid-state ROM for controlling the PC), a floppy disk drive, a motherboard and an operating system.
In those days, an entry-level computer at IBM meant a US$90,000 IBM System/38 minicomputer (forefather of today’s IBM Power Systems™ servers) or the barely luggable 50-pound IBM Portable Computer, selling at US$9000. Typical margins were 20 percent to 60 percent on these machines plus the software and services that went with them. IBM at the time was a US$23 billion enterprise with 337,000 employees.
It was against this solid economic background that William C. Lowe, then systems manager for IBM Entry Level Systems, part of the company’s General Systems Division, traveled from Boca Raton, Florida, to IBM headquarters in Armonk, New York, to meet with CEO Frank Cary, who was looking at the personal computer uprising and wondering what to do about it. Lowe agreed that IBM shouldn’t and couldn’t afford to remain on the sidelines, and boldly told Cary that IBM needed to either buy one of the companies making these new microcomputers, or build its own—with an improbable sticker price of US$1500. Cary said, “Come back with a prototype in one month.”
Things happened fast after that. Lowe was soon promoted to a higher level job, and Don Estridge took over the project, called “Chess.” Estridge got rare permission to live and work outside of IBM’s design and development process. Bill Sydnes took on the hardware mission, Jack Sams had software, and H.L. “Sparky” Sparks had marketing. "For a month, we met every morning to hash out what it was this machine had to do and then in the afternoon worked on the morning's decisions,” said Dave Bradley, who wrote the interface code for the new machine.
“We’re free to do this our way,” Estridge told a group of communications specialists at Armonk at the time. “As long as we keep everyone informed. This is my 34 th presentation in about as many weeks.”
Until this moment IBM, in its 70 years in business, had designed and made nearly everything it sold. After a lot of heated arguments, the team concluded they needed to go outside the company and use “off-the-shelf” parts to fast-track a computer they could sell for US$1500.
They went to Microsoft for the operating system (QDOS, renamed PC-DOS and later sold by Microsoft as MS-DOS) and to Intel ® for its 8088 processor. They chose an existing monitor from IBM Japan and a dot-matrix printer by Epson. Only the keyboard and the system unit itself were new designs from IBM. Even more shocking at the time, the team opted to make the IBM PC an “open architecture” product, and published a technical reference of the system’s circuit designs and software source codes. With this information, other companies could develop software and build peripheral components.
On August 12, 1981, Estridge and his team introduced the IBM 5150 at a press conference in New York City, triggering a media frenzy that continued for months. The new computer had 16KB of RAM, no disk drives, several applications—including VisiCalc, a spreadsheet, and EasyWriter, a word processor—and sold for US$1565. An expanded model came with 256KB of RAM and two floppy disk drives. In another major departure from business as usual, IBM sold the PC through retail stores such as ComputerLand and Sears.
The press quickly dubbed the machine “The IBM PC.” Three months later, Tom Mabley, creative director at Lord, Geller, Federico, Einstein introduced the first of what became a long-running series of vignette advertisements featuring “The Little Tramp,” a Charlie Chaplin character. Charles Pankenier, director of communications for the PC following its launch, told Time Magazine why IBM had chosen an ad symbol seemingly out of character with IBM’s button-down image: “We were dealing with a whole new audience that never thought of IBM as a part of their lives,” he said.
Within two years, both the PC and its pointed but light-hearted advertising became part of the culture of the 1980s. Personal computers were no longer a “hobbyist” phenomenon, and the heavy cloud of mystery and complexity that had hung over computing evaporated. People started buying the IBM PC, and then the IBM PC XT, the IBM PC/AT, the IBM PCjr, the IBM Portable PC, and eventually the IBM PS/2 by the thousands, and then the tens of thousands. Beginning in January 1983, IBM PCs were sold around the world. And, at its peak, an IBM PC sold at a rate of one every minute of every business day.
Time Magazine, for its famous “Man of the Year” edition for 1982, put the personal computer on its January 3, 1983, cover as “Machine of the Year.” Said Time, “… the enduring American love affairs with the automobile and the television set are now being transformed into a giddy passion for the personal computer … it is the end result of a technological revolution that has been in the making for four decades and is now, quite literally, hitting home.”
After a few companies reverse-engineered the IBM PC BIOS, competitors such as Compaq, Dell and HP, among others, came out with their own line of “IBM compatible” personal computers and peripherals, creating a multibillion dollar industry that continues to flourish. “IBM compatible architecture” became an industry standard. And “PC” became a generic term.
Perhaps more significant, the IBM PC changed the way we live. Before it arrived, the effort to tear down the wall between professional and personal computing had been a movement; the PC made it a standard.
“It legitimized computing at the individual, personal level,” said Pankenier, now retired from IBM. “It also created an ecosystem for technology introductions and how we do open systems, applications and add-on hardware development, and how we approach distribution channels. And it showed that even big companies like IBM can be nimble when people have the right freedom.”
Over time, personal laptop and desktop computers became substantially commodity products—low-cost means for accessing data and information. And 24 years after creating the “PC era,” IBM in 2005 completed the sale of its PC division to Lenovo, the leading PC manufacturer in the People’s Republic of China, which develops and sells a wide range of PC products, including new versions of IBM’s legacy ThinkPad laptops.