IBM PC

By 1981, a small but vigorous personal computer (PC) industry was offering complete desktop computer systems. Apple’s Apple II offered color graphics and expandability through an “open architecture”—slots into which cards designed by third-party vendors could be plugged. While the Apple II had its own DOS (disk operating system) as did Radio Shack’s TRS-80, most microcomputers sold in the business market used CP/M, an operating system developed by Gary Kildall and his company Digital Research. Meanwhile, IBM, the world’s largest computer company (see ib m), had quietly created a special team headed by Phillip (“Don”) Estridge and tasked with designing a personal computer. Unlike the case with the company’s mainframe development, the team was given considerable freedom in choosing architecture and components—but they were told they would have to have a machine ready for the market in one year. Because of the short time frame, the team chose thirdparty components already well established in the market, including the monitor, floppy disk drive, and a printer.

Unlike Apple and most other companies, IBM created two separate video display systems, one monochrome (MDA) for sharp text for business applications and the threecolor CGA system for the game and education markets. The IBM team also adopted standards from the emerging microcomputer industry instead of trying to use existing mainframe standards. For example, they used the ASCII code to represent characters, not the EBCDIC code used on IBM mainframes. They also chose the Intel 8086 and 8088 microprocessors, which had an instruction set similar to that of the Intel 8080 used in many CP/M systems (see microprocessor). This would make it easy for software developers to create IBM PC versions of their software quickly so that the new machine would have a repertoire of business software. One might have expected that IBM would also adopt a version of CP/M as the PC’s operating system, taking advantage of the closest thing to an existing industry standard. However, CP/M was relatively expensive, and negotiations with Digital Research stumbled, leaving an opening for a much smaller company, Microsoft, to sell a DOS based on software it had licensed from Seattle Computer Products. While IBM did offer CP/M and another operating system based on the UC San Diego Pascal development system,
Microsoft DOS, which became known as PC-DOS (and later MS-DOS), was cheapest and effectively became the default offering.

When IBM officially announced its PC in April 1981, Apple took out full-page ads “welcoming” the new competitor to what it considered to already be a mature industry. But by the end of 1983, a million IBM PCs had been sold, dwarfing Apple and other brands. From then on, while Apple would go on to announce its distinctive Macintosh in 1984, the IBM machine would set the industry standard. To most people, “PC” would mean “IBM PC.”