Influence Of The IBM PC On The Personal Computer Market

Following the introduction of the IBM Personal Computer, or IBM PC, many other personal computer architectures became extinct within just a few years. It led to a wave of IBM PC compatible systems being released.

Before the IBM PC's introduction

Before the IBM PC was introduced, the personal computer market was dominated by systems using the 6502 and Z80 8-bit microprocessors, such as the TRS 80, Commodore PET, and Apple II series, which used proprietary operating systems, and by computers running CP/M. After IBM introduced the IBM PC, it was not until 1984 that IBM PC and clones became the dominant computers. In 1983, ''Byte'' forecast that by 1990, IBM would command only 11% of business computer sales. Commodore was predicted to hold a slim lead in a highly competitive market, at 11.9%.

Around 1978, several 16-bit CPUs became available. Examples included the Data General mN601, the Fairchild 9440, the Ferranti F100-L, the General Instrument CP1600 and CP1610, the National Semiconductor INS8900, Panafacom's MN1610, Texas Instruments' TMS9900, and, most notably, the Intel 8086. These new processors were expensive to incorporate in personal computers, as they used a 16-bit data bus and needed rare (and thus expensive) 16-bit peripheral and support chips.

More than 50 new business-oriented personal computer systems came on the market in the year before IBM released the IBM PC. Very few of them used a 16- or 32-bit microprocessor, as 8-bit systems were generally believed by the vendors to be perfectly adequate, and the Intel 8086 was too expensive to use. The editors asked 17 personal computer executives "Is 8-bit dead?" The response was mixed. Gary Kildall, author of the CP/M operating system, said "We're not too concerned that 8-bit stuff is going to die." Bill Gates said "We need the power of the 16-bit computers for good software design."

Some of the main manufacturers selling 8-bit business systems during this period were:

* Acorn Computers
* Apple Computer Inc.
* Atari Inc.
* Commodore International
* Cromemco
* Digital Equipment Corporation
* Durango Systems Inc.
* Hewlett-Packard
* Intersystems
* Morrow Designs
* North Star Computers
* Ohio Scientific
* Olivetti
* Processor Technology
* Sharp
* South West Technical Products Corporation
* Tandy Corporation
* Zenith Data Systems/Heathkit

The IBM PC

On August 12, 1981, IBM released the IBM Personal Computer. One of the most far-reaching decisions made for IBM PC was to use an open architecture, leading to a large market for third party add-in boards and applications; but finally also to many competitors all creating "IBM-compatible" machines.

The IBM PC used the then-new Intel 8088 processor. Like other 16-bit CPUs, it could access up to 1 megabyte of RAM, but it used an 8-bit-wide data bus to memory and peripherals. This design allowed use of the large, readily available, and relatively inexpensive family of 8-bit-compatible support chips. IBM decided to use the Intel 8088 after first considering the Motorola 68000 and the Intel 8086, because the other two were considered to be too powerful for their needs. Although already established rivals like Apple and Radio Shack had many advantages over the company new to microcomputers, IBM's reputation in business computing allowed the IBM PC architecture to take a substantial market share of business applications, and many small companies that sold IBM-compatible software or hardware rapidly grew in size and importance, including Tecmar, Quadram, AST Research, and Microsoft.

As of mid-1982, three other mainframe and minicomputer companies sold microcomputers, but unlike IBM, Hewlett-Packard, Xerox, and Control Data Corporation chose the CP/M operating system. Many other companies made "business personal computers" using their own proprietary designs, some still using 8-bit microprocessors. The ones that used Intel x86 processors often used the generic, non-IBM-compatible specific version of MS-DOS or CP/M-86, just as 8-bit systems with an Intel 8080 compatible CPU normally used CP/M.

The use of MS-DOS on non-IBM PC compatible systems

Within a year of the IBM PC's introduction, Microsoft licensed MS-DOS to over 70 other companies. One of the first computers to achieve 100% PC compatibility was the Compaq Portable, released in November 1982; it remained the most compatible clone into 1984. Before the PC dominated the market, however, most systems were not clones of the IBM PC design, but had different internal designs, and ran Digital Research's CP/M.

The IBM PC was difficult to obtain for several years after its introduction. Many makers of MS-DOS computers intentionally avoided full IBM compatibility because they expected that the market for what ''InfoWorld'' described as "ordinary PC clones" would decline. They feared the fate of companies that sold computers plug-compatible with IBM mainframes in the 1960s and 1970s—many of which went bankrupt after IBM changed specifications—and believed that a market existed for personal computers with a similar selection of software to the IBM PC, but with better hardware.

While Microsoft used a sophisticated installer with its DOS programs like Multiplan that provided device drivers for many non IBM PC-compatible computers, most other software vendors did not. Columbia University discussed the difficulty of having Kermit support many different clones and MS-DOS computers. Peter Norton, who earlier had encouraged vendors to write software that ran on many different computers, by early 1985 admitted—after experiencing the difficulty of doing so while rewriting Norton Utilities—that "there's no practical way for most software creators to write generic software". Dealers found carrying multiple versions of software for clones of varying levels of compatibility to be difficult.

To get the best results out of the 8088's modest performance, many popular software applications were written specifically for the IBM PC. The developers of these programs opted to write directly to the computer's (video) memory and peripheral chips, bypassing MS-DOS and the BIOS. For example, a program might directly update the video refresh memory, instead of using MS-DOS calls and device drivers to alter the appearance of the screen. Many notable software packages, such as the spreadsheet program Lotus 1-2-3, and Microsoft's ''Microsoft Flight Simulator'' 1.0, directly accessed the IBM PC's hardware, bypassing the BIOS, and therefore did not work on computers that were even trivially different from the IBM PC. This was especially common among PC games. As a result, the systems that were not fully IBM PC-compatible could not run this software, and quickly became obsolete. Rendered obsolete with them was the CP/M-inherited concept of OEM versions of MS-DOS meant to run (through BIOS calls) on non IBM-PC hardware.

Cloning the PC BIOS

In 1984, Phoenix Technologies began licensing its clone of the IBM PC BIOS. The Phoenix BIOS and competitors such as AMI BIOS made it possible for anyone to market a PC compatible computer, without having to develop a compatible BIOS like Compaq.

Decline of the Intel 80186

Although based on the i8086 and enabling the creation of relatively low-cost x86-based systems, the Intel 80186 quickly lost appeal for x86-based PC builders because the supporting circuitry inside the Intel 80186 chip was incompatible with those used in the standard PC chipset as implemented by IBM. It was very rarely used in personal computers after 1982.

Domination of the clones

"Is it PC compatible?"

In February 1984 ''BYTE'' described how "the personal computer market seems to be shadowed under a cloud of compatibility: the drive to be compatible with the IBM Personal Computer family has assumed near-fetish proportions", which it stated was "inevitable in the light of the phenomenal market acceptance of the IBM PC". The magazine cited the announcement by North Star in fall 1983 of its first PC-compatible microcomputer. Founded in 1976, North Star had long been successful with 8-bit S-100 bus products, and had introduced proprietary 16-bit products, but now the company acknowledged that the IBM PC had become a "standard", one which North Star needed to follow. ''BYTE'' described the announcement as representative of the great impact IBM had made on the industry:

The magazine expressed concern that "IBM's burgeoning influence in the PC community is stifling innovation because so many other companies are mimicking Big Blue". Admitting that "it's what our dealers asked for", Kaypro also introduced the company's first IBM compatible that year. Tandy—which had once had as much as 60% of the personal-computer market, but had attempted to keep technical information secret to monopolize software and peripheral sales—also began selling non-proprietary computers; four years after its Jon Shirley'' that the new IBM PC's "major market would be IBM addicts", the magazine in 1985 similarly called the IBM compatibility of the Tandy 1000 "no small concession to Big Blue's dominating stranglehold" by a company that had been "struggling openly in the blood-soaked arena of personal computers". The 1000 was compatible with the PC but not compatible with its own Tandy 2000 MS-DOS computer. IBM's mainframe rivals, the BUNCH, introduced their own compatibles, and when Hewlett-Packard introduced the Vectra ''InfoWorld'' stated that the company was "responding to demands from its customers for full IBM PC compatibility".

Mitch Kapor of Lotus Development Corporation said in 1984 that "either you have to be PC-compatible or very special". "Compatibility has proven to be the only safe path", Microsoft executive Jim Harris stated in 1985, while ''InfoWorld'' wrote that IBM's competitors were "whipped into conformity" with its designs, because of "the total failure of every company that tried to improve on the IBM PC". Customers only wanted to run PC applications like 1-2-3, and developers only cared about the massive PC installed base, so any non-compatible—no matter its technical superiority—from a company other than Apple failed for lack of customers and software. Compatibility became so important that Dave Winer joked that year (referring to the PC AT's incomplete compatibility with the IBM PC), "The only company that can introduce a machine that isn't PC compatible and survive is IBM".

By 1985, the shortage of IBM PCs had ended, causing financial difficulties for many vendors of compatibles; nonetheless, Harris said, "The only ones that have done worse than the compatibles are the noncompatibles". The PC standard was similarly dominant in Europe, with Honeywell Bull, Olivetti, and Ericsson selling compatibles and software companies focusing on PC products. By the end of the year ''PC Magazine'' stated that even IBM could no longer introduce a rumored proprietary, non-compatible operating system. Noting that the company's unsuccessful PCjr's "cardinal sin was that it wasn't PC compatible", the magazine wrote that "backward compatibility ith the IBM PCis the single largest concern of hardware and software developers. The user community is too large and demanding to accept radical changes or abandon solutions that have worked in the past."

Within a few years of the introduction of fully compatible PC clones, almost all rival business personal computer systems, and alternate x86 using architectures, were gone from the market. Despite the inherent dangers of an industry based on a de facto "standard", a thriving PC clone industry emerged. The only other non-IBM PC-compatible systems that remained were those systems that were classified as home computers, such as the Apple II series, or business systems that offered features not available on the IBM PC, such as a high level of integration (e.g., bundled accounting and inventory) or fault-tolerance and multitasking and multi-user features.

Wave of inexpensive clones

Compaq's prices were comparable to IBM's, and the company emphasized its PC compatibles' features and quality to corporate customers. From mid-1985, what ''Compute!'' described as a "wave" of inexpensive clones from American and Asian companies caused prices to decline; by the end of 1986, the equivalent to a real IBM PC with 256K RAM and two disk drives cost as little as , lower than the price of the Apple IIc. Consumers began purchasing DOS computers for the home in large numbers; Tandy estimated that half of its 1000 sales went to homes, the new Leading Edge Model D comprised 1% of the US home-computer market that year, and toy and discount stores sold a clone manufactured by Hyundai, the Blue Chip PC, like a stereo—without a demonstrator model or salesman.

Tandy and other inexpensive clones succeeded with consumers—who saw them as superior to lower-end game machines—where IBM failed two years earlier with the PCjr. They were as inexpensive as home computers of a few years earlier, and comparable in price to the Commodore Amiga, Atari ST, and Apple IIGS. Unlike the PCjr, clones were as fast as or faster than the IBM PC and highly compatible so users could bring work home; the large DOS software library reassured those worried about orphaned technology. Consumers used them for both spreadsheets and entertainment, with the former ability justifying buying a computer that could also perform the latter. PCs and compatibles also gained a significant share of the educational market, while longtime leader Apple lost share.

At the January 1987 Consumer Electronics Show, both Commodore and Atari announced their own clones. By 1987 the PC industry was growing so quickly that the formerly business-only platform had become the largest and most important market for computer game companies, outselling games for the Apple II or Commodore 64. With the EGA video card, an inexpensive clone was better for games than the other computers. MS-DOS software was 77% of all personal computer software sold by dollar value in the third quarter of 1988, up 47% year over year. By 1989 80% of readers of ''Compute!'' owned DOS computers, and the magazine announced "greater emphasis on MS-DOS home computing".

IBM's influence on the industry decreased, as competition increased and rivals introduced computers that improved on IBM's designs while maintaining compatibility. In 1986 the Compaq Deskpro 386 was the first computer based on the Intel 80386

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