Origins
Desktop sized programmable calculators by Hewlett Packard had evolved into the HP 9830 BASIC language computer by 1972, with IBM's releasing its own IBM 5100 in 1975. It was a complete computer system programmable in BASIC or APL, with a small built-in CRT monitor, keyboard, and tape drive for data storage. It was also very expensive — up to $20,000 USD. It was specifically designed for professional and scientific problem-solvers, not business users or hobbyists. When the PC was introduced in 1981, it was designated as the IBM 5150, putting it in the "5100" series, though its architecture was not directly descended from the IBM 5100. Later models followed in the trend: for example, the PC/XT, IBM Portable Personal Computer, and PC AT are IBM machine types 5160, 5155, and 5170, respectively.
The original line of PCs were part of an IBM strategy to get into the small personal computer market then dominated by the Commodore PET, Atari 8-bit family, Apple II, Tandy Corporation's TRS-80s, and various CP/M machines.
New products at IBM typically required about four years for development. The company recognized that to compete with other personal computers it needed to develop its offering much more quickly. Rather than going through the usual IBM design process, a special team was assembled with authorization to bypass normal company restrictions and get something to market rapidly. This project was given the code name Project Chess at the IBM Entry Systems Division in Boca Raton, Florida. The team consisted of twelve people directed by Don Estridge with Chief Designer Lewis Eggebrecht. They developed the PC in about a year. To achieve this they first decided to build the machine with "off-the-shelf" parts from a variety of different original equipment manufacturers (OEMs) and countries. Previously IBM had always developed its own components. Secondly for scheduling and cost reasons, rather than developing unique IBM PC monitor and printer designs, project management decided to utilize an existing "off-the-shelf" IBM monitor developed earlier in IBM Japan as well as an existing Epson printer model. Consequently, the unique IBM PC industrial design elements were relegated to the system unit and keyboard. They also decided on an open architecture, so that other manufacturers could produce and sell peripheral components and compatible software without purchasing licenses. IBM also sold an IBM PC Technical Reference Manual that included complete and fully accurate circuit schematics, a listing of the ROM BIOS source code, and other engineering and programming information. IBM introduced the PC on August 12, 1981. Six weeks later at COMDEX Fall, Tecmar had 20 PC products available for sale. These products included memory expansion, IEEE-488, data acquisition, and PC Expansion chassis . Pricing for the IBM PC started at $1,565 for a bare-bones configuration without disk drives.
At the time, Don Estridge and his team considered using the IBM 801 processor (an early RISC CPU) and its operating system that had been developed at the Thomas J. Watson Research Center in Yorktown Heights, New York. The 801 processor was more than an order of magnitude more powerful than the Intel 8088, and the operating system more advanced than the DOS 1.0 operating system from Microsoft, which was finally selected. Ruling out an in-house solution made the team’s job much easier and may have avoided a delay in the schedule, but the ultimate consequences of this decision for IBM were far-reaching. IBM had recently developed the Datamaster business microcomputer, which used an Intel processor and peripheral ICs; familiarity with these chips and the availability of the Intel 8088 processor was a deciding factor in the choice of processor for the new product. Even the 62-pin expansion bus slots were designed to be similar to the Datamaster slots. Delays due to in-house development of the Datamaster software also influenced the design team to a fast-track development process for the PC, with publicly available technical information to encourage third-party developers.
Other manufacturers soon reverse engineered the BIOS to produce their own non-infringing functional copies. Columbia Data Products introduced the first IBM-PC compatible computer in June 1982. In November 1982, Compaq Computer Corporation announced the Compaq Portable, the first portable IBM PC compatible. The first models were shipped in March 1983.
Once the IBM PC became a commercial success, the product came back under the more usual tight IBM management control. IBM's tradition of "rationalizing" product lines, deliberately restricting the performance of lower-priced models in order to prevent them from "cannibalizing" profits from higher-priced models, worked against them.
Read more about this topic: IBM Personal Computer
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