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  • Ian Ritchie : Business AM

Have PCs reached prime of their life?

Personal computers have come a long way since IBM introduced the machine that changed the world 20 years ago, but they may not survive as we know them

IT IS DIFFICULT these days to think of a world without personal computers but, amazingly, the IBM PC was only launched 20 years ago this month.

Various small computers had already been introduced in the late 1970s by specialist companies such as Commodore and Apple, but it was the decision by IBM, then the world’s largest computer company, to enter the PC market that kick-started the industry that has since changed the world.

Apple took out full page newspaper adverts which said: “Welcome, IBM. Seriously”. Its point was that participation by IBM would legitimise the business and turn the fledgling personal computer industry into a major force, benefiting all the suppliers. Twenty years later, with only 5% of the market for personal computers, Apple may have had good reason to rethink that welcome.

It was certainly a brave decision by IBM, and not at all an obvious one. If people switched away from larger computers to the new low-cost PCs it could seriously damage its business. Mainframe computers were always very profitable, and PCs are not.

I was working for ICL, Britain’s only large computer company. I remember around 1980 that I asked the then managing director if we were going to start making entry-level small computers.

“We are not in the toy business,” was his rather dismissive answer. I was therefore a little surprised when, the very next day, I visited my colleagues at the computer design laboratories in Manchester. They were planning the development of ICL’s newest and most advanced mainframe, and they were doing the budgets and plans with the help of Visicalc running on an Apple II – what ICL’s MD undoubtedly considered a 'toy'.

Having decided to go ahead with the PC, IBM made a number of key decisions. They chose to use off-the-shelf components, including the 8086 processor from Intel and an operating system from a small Seattle company called Microsoft.

They also allowed Microsoft and Intel to sell their designs to rival manufacturers. They were persuaded that if the designs became 'industry standard' it would encourage software and hardware manufacturers to design lots of add-on products and quickly create a strong, healthy market.

As a direct result Intel and Microsoft have become the giant corporations that they are today. Both are now larger than IBM, in fact Microsoft has about twice the market value of IBM.

IBM tried later to regain control of the 'Frankenstein’s monster' that it had created and attempted to encourage customers to adopt its proprietary OS/2 operating system and the non-standard PS/2 computer.

In the event it was all too late. The market decided to ignore those IBM variants and stick with the PC standard. When Microsoft broke off its partnership with IBM over OS/2 and threw its weight behind its Windows environment it set the course for the PC world that we live in today.

And, of course, they have come a long way. The PC in 1981 cost about £2,000. Today’s computers are more than 300 times more powerful and cost a little less – quite a lot less if you allow for inflation.

They have also become significantly more complicated. In fact, most people find the complexity of today’s PCs quite intimidating. Many would argue that we are now at the peak of the PC life cycle, and that the PC as we know it will not survive for another 20 years. They predict that computers will become much smaller, more specialised, and more disposable.

They will become the 'information appliance' that will be dedicated to specialised functions – diary, web-browsing, electronic book or entertainment platform. Each will be a powerful computer, but will not look like one.

In the meantime – happy birthday, PC. The machine that changed the world.

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