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.

IBM PC 5150 © SSPL/Getty Images
IBM's tap-dancing elephant
(Image credit: © SSPL/Getty Images)

"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.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

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.

Chris Carter
Wealth Editor, MoneyWeek

Chris Carter spent three glorious years reading English literature on the beautiful Welsh coast at Aberystwyth University. Graduating in 2005, he left for the University of York to specialise in Renaissance literature for his MA, before returning to his native Twickenham, in southwest London. He joined a Richmond-based recruitment company, where he worked with several clients, including the Queen’s bank, Coutts, as well as the super luxury, Dorchester-owned Coworth Park country house hotel, near Ascot in Berkshire.

Then, in 2011, Chris joined MoneyWeek. Initially working as part of the website production team, Chris soon rose to the lofty heights of wealth editor, overseeing MoneyWeek’s Spending It lifestyle section. Chris travels the globe in pursuit of his work, soaking up the local culture and sampling the very finest in cuisine, hotels and resorts for the magazine’s discerning readership. He also enjoys writing his fortnightly page on collectables, delving into the fascinating world of auctions and art, classic cars, coins, watches, wine and whisky investing.

You can follow Chris on Instagram.