On August 12, 1981, IBM made history with the launch of their IBM PC. It was the personal computer that helped to define a generation.
Yes, the IBM PC is now Constitutionally eligible to run for President!
When the company introduced their first “tiny” desktop computer, it offered no internal hard drive and a choice between 16kb and 64kb of RAM — that’s kb, as in kilobytes.
Customers initially had the option of buying a model with either one or two 5-1/4″ floppy disk drives, and they would boot software and save files by repeatedly inserting and removing those disks.
Despite those limitations, IBM’s PC was a tremendous success that set-up a battle against Apple for dominance of the home computing market.
“Within two years of its introduction, the IBM PC overtook the Apple II as the best-selling PC. By 1985, IBM’s PC division had grown to 10,000 people and was grossing $4.5 billion a year,” wrote Kevin Maney in his book Making the World Work Better. “As the power of computing dispersed into the hands of individuals, computing changed profoundly. Computing kept moving inexorably outward, from the experts to the masses.”
The Operating System
The IBM PC was also the first computer to ship with Microsoft’s PC-DOS.
One of the biggest changes for IBM in entering the personal computer market was that they didn’t build and develop everything in-house, as had been the company’s common practice. Instead, IBM created standards and outsourced many elements, even the operating system.
Microsoft licensed and later acquired DOS, which stood for Disk Operating System, from a small company called Seattle Computer Products. The Microsoft team quickly adapted it to run on the IBM PC and an empire was born.
A decade later, IBM compatible PCs running Microsoft operating systems had captured more than a 90% share of the market.
A Pricey Proposition
Despite possessing the computing power of a modern day pocket calculator, the IBM PC was priced starting at $1,500.
A more fully-featured configuration, including a printer and other peripherals, would sell for closer to $4,500.
In 2016 money, that translates the prices to a range of between $4,000 and $12,000.
“Two decades earlier, an IBM computer often cost as much as $9 million and required an air-conditioned quarter-acre of space and a staff of 60 people to keep it fully loaded with instructions,” notes the company.
At launch, it was reported that 40,000 orders were taken. Some people were forced to wait months while the company’s supply caught up with demand.
Ultimately, more than 200,000 of the PCs were sold within the first year and stores were soon flooded with so-called “PC clones” built by companies like Packard Bell, Compaq, and Dell.
Despite their woefully limited computing power, some IBM PCs were still being used by the National Weather Service to process data as recently as a few years ago.