12 August 1981: IBM launches the PC

On this day in August 1981 IBM revolutionised home computing with the launch of the PC 5150. It was a roaring success, with shops queueing up to sell it.

"Elephants don't gallop", so said legendary investor Jim Slater of companies too big to grow quickly. But they might be persuaded to dance.

Companies didn't come much bigger than IBM, the “Colossus of Armonk”. IBM's problem was that it was big, boring and slow to innovate. Its gig was selling computers the size of your living room to other boring companies. But during the 1970s, a revolution was underway.

As technology advanced, computers shrank, and so did the price. For the first time, ordinary punters stood a chance of owning one. Smaller, more nimble companies such as Apple, with their faster research and production times, were making hay. IBM was missing out.

IBM was infamous for the slow pace of development for its products – about five years, far too slow to keep up with the pace of change. As one observer wryly noted, "IBM bringing out a personal computer would be like teaching an elephant to tap dance".

Luckily for IBM, it had a man who could do just that. His name was Don Estridge. A top boffin in the lab department, Estridge volunteered to lead “project Chess”. With his small band of scientists, they set out to design and build a personal computer to rival the Apple II. They worked round the clock, and by April 1981, the personal computer (PC) was all but ready. It had taken them just one year.

What IBM did next was truly revolutionary – so much so, in fact, that IBM surprised itself. It invited outsiders to make components for its computer and approached a little-known company to write its software – Microsoft.

On 12 August 1981, the IBM PC 5150 was unveiled at the Waldorf Astoria in New York. You would have had to shell out $1,565 to get your hands on one, but that wasn't bad when you think that 20 years earlier, a computer would have cost you $9m. That's assuming you had somewhere big enough to put it.

The IBM PC was small – about the size of a typewriter – and it proved overwhelmingly popular; a "roaring success" as Newsweek put it. By the end of 1982, shops were queueing up to sell it and IBM's little computer paved the way for home computing.

Recommended

Why UK firms should start buying French companies
UK stockmarkets

Why UK firms should start buying French companies

The French are on a buying spree, snapping up British companies. We should turn the tables, says Matthew Lynn, and start buying French companies. Here…
28 Sep 2022
Three funds for investing in Japanese value stocks
Japan stockmarkets

Three funds for investing in Japanese value stocks

Japanese stocks have fallen out of favour with investors, but they are looking ripe for recovery, says Max King.
28 Sep 2022
The end of cheap money hits the markets
Stockmarkets

The end of cheap money hits the markets

Markets have swooned as central banks raise interest rates, leaving the era of cheap money behind.
28 Sep 2022
How the end of cheap money could spark a house price crash
House prices

How the end of cheap money could spark a house price crash

Rock bottom interest rates drove property prices to unaffordable levels. But with rates set to climb and cheap money off the table, we could see house…
28 Sep 2022

Most Popular

Earn 4.1% from the best savings accounts
Savings

Earn 4.1% from the best savings accounts

With inflation topping 10%, your savings won't keep pace with the rising cost of living. But you can at least slow the rate at which your money is los…
27 Sep 2022
How much is King Charles III worth?
UK Economy

How much is King Charles III worth?

What will King Charles III inherit from the late Queen? Will he have to pay inheritance tax? And how large is his personal fortune and estate?
23 Sep 2022
Beating inflation takes more luck than skill – but are we about to get lucky?
Inflation

Beating inflation takes more luck than skill – but are we about to get lucky?

The US Federal Reserve managed to beat inflation in the 1980s. But much of that was down to pure luck. Thankfully, says Merryn Somerset Webb, the Bank…
26 Sep 2022