In Jan. 1983, Time put "machine of the year" on its cover for the first time since its founding, instead of "person of the year." It was a computer named "PC (Personal Computer)" that U.S. IT giant IBM had released 16 months earlier. IBM's PC is considered the greatest invention of the 20th century, ushering in the era of "one computer per household." At the same time, it has been called the worst mistake in IBM's history.
IBM's history is often said to be the history of the global computer industry. Founded in 1911, it released a commercial computer (IBM 650) in 1954 and, within a year, became a monopoly with an 80% market share. The IBM 650 cost $200,000, about 100 times the U.S. per capita gross domestic product (GDP) at the time. Its size was said to be about that of a modern refrigerator. As a result, computers were mainly purchased by governments, public institutions, and corporations.
Then, in the late 1970s, Steve Jobs' Apple introduced the "microcomputer," bringing change. The "Apple I," released in 1976, was priced at only $666.66. It came as just a circuit board, and the monitor and keyboard had to be purchased separately. Above all, Apple produced only 200 units, so it did not spread widely. The Apple II, released the following year, was a preassembled computer priced at $1,298 and weighed only about 5 kg. This, too, was mainly bought by enthusiasts and reportedly did not upend the market.
But IBM felt a sense of crisis. In response, in 1981 it released its first PC, the "IBM PC 5150." This product was cheaper and lighter than what IBM had previously released.
If that had been all, IBM would not have changed the history of the computer industry. IBM disclosed all hardware circuit diagrams and BIOS (a program that defines data input and output methods) design rules. It also used Intel's CPU (central processing unit), the brain of the computer, and its software was based on PC DOS, jointly developed with Microsoft (MS).
Within eight months of its release, 50,000 IBM PCs were sold, and 500,000 were sold within two years, opening the era of home computers. PC manufacturers were able to develop and sell hardware and software products based on the design rules disclosed by IBM. Consumers could also mix IBM and other companies' products to build computers with the specifications they wanted. In this way, the IBM PC became the de facto standard for today's PCs.
However, about 20 years after this success, in 2005 IBM completely exited the business by selling its PC business institutional sector to China's Lenovo. When IBM disclosed its PC design in 1981, similar or better products flooded the market and won over consumers. IBM also did not demand exclusive contracts from Intel and MS, its partners in making the PC. As a result, the two companies were able to sell their products to IBM's competitors as well.