Most early adopters of IBM's 5150 PC ran a Microsoft operating system known at the time as PC-DOS, which cost users $40. __1981: __IBM introduces the 5150 personal computer. It will sweep away the competition and effectively have the field to itself, for a while.
Before 1980, IBM made only mini and mainframe computers. The old-line firm just wasn't sure that the fledgling microcomputer market would be at all profitable. But once the company decided to act, it developed the 5150 in less than a year at its Boca Raton, Florida, facility -- using existing off-the-shelf components. IBM selected Intel's 8-to-16-bit 8088 processor, because it thought both the Intel 8086 and Motorola MC68000 16-bit processors were too powerful.
For an operating system, IBM first went to Digital Research, which had developed CP/M. When Digital declined, IBM went to a small firm known for microcomputer adaptations of BASIC: Microsoft.
Microsoft bought the rights to Seattle Computer Products' QDOS (supposedly, "Quick and Dirty Operating System," itself a possible hack of CP/M). In Microsoft's hands, QDOS became PC-DOS and later MS-DOS. (The 5150 could also run the more-expensive CP/M-86 and UCSD D-Pascal operating systems, but the $40 price tag on PC-DOS 1.0 made it irresistible to most users.)
IBM unveiled its new baby in Boca Raton and at New York City's Waldorf Astoria hotel. It weighed a then-svelte 25 pounds with a 4.77-MHz Intel 8088 CPU that contained 29,000 transistors. Stripped, it had just 16 kB of RAM; standard 64 kB, expandable to 256 kB. It also featured a 40-kB ROM, a choice of zero, one or two 5.25-inch floppy drives, a monochromatic display and optional cassette drive.
The 16-kb base model, with no data-storage drives included, cost $1,565 ($3,770 in today's money). If you loaded a 64-kB box with all the standard features, that jumped to $2,880 ($6,930 today), and souped up with color graphics and 256 kB, it'd cost you about $6,000 ($14,400 today). Available software included the VisiCalc spreadsheet, Easywriter 1.0 and Adventure, Microsoft's first game.
IBM retailed the 5150 through ComputerLand and Sears, Roebuck. It sold 65,000 PCs in four months, with 100,000 orders taken by Christmas.
The 5150 was trouncing all the other microcomputers targeted for homes and small businesses. It established the dominance of the Microsoft operating system, pushing CP/M and proprietary operating systems out of the market. On the hardware side, its boxy design became the model for PC compatibles, and the ISA bus supplanted the old S-100 bus as standard.
It would be two-and-a-half years before the first real challenge appeared, when the original Apple Macintosh went on sale.
Source: Old Computers Online Museum
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