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Raw Bytes Computer News KPBX FM 91.1 Radio National Public Radio Network Frank Delaney Producer Broadcast on Thursday Morning 7:35 AM During Morning Edition Support Public Radio ! The Theater Of the Mind |
In computer news this week
Thursday, December 9, 2004 |
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The end of an era, or IBM abandons
its biggest mistake – The IBM corporation recently announced its decision to sell its PC
business to China's Lenovo Group in a deal that calls for Lenovo to pay $1.25 billion in cash for IBM's PC business,
and for IBM to take an 18% stake in Lenovo. IBM has
ranked a distant third
behind Dell and
Hewlett-Packard. Ok
that’s the official corporate speak cover story. Let’s look at
this in the historical perspective of the PC industry. The most
common misconception of the PC industry is that IBM created it. Actually,
nothing could be farther from the truth. The PC
industry officially began in January of 1975 with the introduction of the
Altair computer kit by MITS company founder, Ed Roberts. This was a hardware
only computer, desperately in need of software, which is where Bill Gates and
Paul Allen came into the picture, before Microsoft was founded. All this
early history is detailed in my History of the Microcomputer Revolution,
which is online at http://www.mtamicro.com/microhis.htm. It was a full six and ½ years from
this date until IBM introduced their first IBM PC in August of 1981 mainly
because they felt this was a small emerging market in which they could make
a profit. After all, if long haired hippies who
named their computer Apple could make a profit, imagine what the world’s
biggest professional computer company could do. So
incredible was IBM's success that the October 3rd, 1983 issue of Business
Week magazine ran a cover story entitled "Personal Computers - and the
Winner is - IBM", which went on to explain how IBM had gone from zero to
market domination in 2 years, surpassing even front runner Apple Computer. But then
IBM went on to make some colossal marketing errors, starting with their
disastrous PC junior computer. And then the PC clone computers emerged,
starting with Compaq computers, and then the Northgates
and Gateways and Dells and a massive influx of no-name imports from overseas,
and it wasn’t long before IBM fell behind in the PC marketplace which
they had legitimized by entering. In my experience, most of the clone
computers were all superior to the IBM pc’s,
and a much better value. Then IBM
started marketing their pc’s through retail
outlets such as Radio Shack and Office Depot, but they couldn’t stop
the flood of pc clones. But perhaps the biggest loss was
to IBM and all the vendors of mini and mainframe computers at the time, and
since. Sales
virtually came to a standstill as businesses worldwide began to take a
serious look at what these little pc’s could so, and it wasn’t
long before the PC revolution swept the world, causing probably billions of
dollars of losses to traditional mini and mainframe computer sales, from
which some companies never recovered. So in
retrospect, IBM dabbled in the PC marketplace, lost it very quickly, paid the
price of trying to stay in it for a couple decades, and now is finally trying
to bow out gracefully. I believe
this is the classic example of a Pyrrhic victory. For Raw Bytes This is Frank Delaney (C) 2004 MTA Micro
Technology Associates http://www.mtamicro.com/kpbx.html (509)624-7230 |
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