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Why Mac?: 3 of 11

How It All Started

Most people don't realize that Apple introduced their first personal computer in 1976 - five years before the IBM PC.

But Apple had a problem. Back then, there was no such thing as a Personal Computer. The category didn't exist. So the only things computer experts could compare the $1,500 Apple to were huge IBM mainframes costing $250,000 or more. The results for Apple (according to the rules of "Perceptive Ignorance) were very predictable. "It's just a toy," said the computer experts. "Pay no attention to the Apple. Our beloved mainframes are still the right choice."

But, those little Apple computers did capture the attention of IBM itself. And even though IBM didn't look forward to the idea of selling personal computers (it's harder to make a profit selling $1,500 machines than it is selling $250,000 machines), they established a team of employees to start creating the IBM Personal Computer.

IBM's Billion Dollar Mistake: Although creating a new type of computer was fairly easy work for the talented IBM team, they faced two problems. First, IBM didn't have a production facility that was ready to mass-produce a low-cost (less powerful) processor. Second, the IBM software team had a reputation for being slow to deliver new products.

As a result, IBM made two decisions that still haunt them today. In an effort to quickly get their new product to market, they went outside for two of the key components inside their new systems. For processors, they turned to Intel, whose 8080 processor offered a good compromise between power and cost. For software, they asked a small company called Microsoft to create an operating system for their new computer.

Unfortunately, even though IBM paid both companies handsomely to create what they needed, their carefree attitude about the profit potential of inexpensive Personal Computers led them to make a horrible mistake: IBM allowed both Intel and Microsoft to retain full ownership of what they had been paid to create. It was a decision that would eventually cost them billions of dollars.

Introducing the IBM PC, and The Clones: In 1981, IBM proudly introduced its new PC. It, too, was slow and weak when compared to existing mainframes, but it had that magical name on the front: IBM. "Here, at last, is an inexpensive computer meant for business," said the computer experts. "Because it comes from our trusted business friends at IBM."

The story of what happened next is filled with legend and innuendo, and possibly even unethical or criminal activities. Please read on!

The three most important building blocks of any computer are its processor, its operating system, and its BIOS (Basic Input/Output System.) The BIOS is what makes a computer work, by providing the communication protocols used between the operating system, the processor, and all of the other components inside the box. But, IBM didn't own either the processor or the operating system inside its PC. The only thing IBM owned was their proprietary BIOS.

Since the true facts have never been proven, and we don't want to be sued for slander, let's just say that it didn't take long for a group of companies to "acquire" the IBM BIOS codes. Once those codes were available for purchase, it was possible for anyone to make an exact duplicate of the IBM PC. All you had to do was obtain a copy of the IBM BIOS codes, buy a processor from Intel, and buy an Operating System from Microsoft. (Most of the other parts inside a computer can be picked up at your local electronics store.)

The CLONES were born, and quickly overtook IBM in sales of personal computers. Who enjoyed the benefits? Intel and Microsoft. They were able to sell their products to any company that wanted to sell a duplicate of IBM's personal computer.

The Moral of the Story: One of the most often heard criticisms of Apple Computer is that they didn't "Open their systems to other manufacturers like IBM did." Please, don't ever make the mistake of believing this. International Business Machines DID NOT give their permission for anyone to build an exact duplicate of their new PC. In fact, IBM eventually sued several clone manufacturers in court. But it was too late. Their proprietary BIOS information had already been spread around too far. IBM lost the suits and had to accept that they were now forced to sell against cheap copies of their very own products.

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Why Mac?: 3 of 11
How It All Started Most people don't realize that Apple introduced their first personal computer in 1976 - five years before the IBM PC. But Apple had a problem. Back then, there was no such thing as a Personal Computer. The category didn't exist. So the only things computer experts could compare the $1,500 Apple to were huge IBM mainframes costing $250,000 or more. The results for Apple (according to the rules of "Perceptive Ignorance) were very predictable. "It's just a toy," said the computer experts. "Pay no attention to the Apple. Our beloved mainframes are still the right choice." But, those little Apple computers did capture the attention of IBM itself. And even though IBM didn't look forward to the idea of selling personal computers (it's harder to make a profit selling $1,500 machines than it is selling $250,000 machines), they established a team of employees to start creating the IBM Personal Computer. IBM's Billion Dollar Mistake: Although creating a new type of computer was fairly easy work for the talented IBM team, they faced two problems. First, IBM didn't have a production facility that was ready to mass-produce a low-cost (less powerful) processor. Second, the IBM software team had a reputation for being slow to deliver new products. As a result, IBM made two decisions that still haunt them today. In an effort to quickly get their new product to market, they went outside for two of the key components inside their new systems. For processors, they turned to Intel, whose 8080 processor offered a good compromise between power and cost. For software, they asked a small company called Microsoft to create an operating system for their new computer. Unfortunately, even though IBM paid both companies handsomely to create what they needed, their carefree attitude about the profit potential of inexpensive Personal Computers led them to make a horrible mistake: IBM allowed both Intel and Microsoft to retain full ownership of what they had been paid to create. It was a decision that would eventually cost them billions of dollars. Introducing the IBM PC, and The Clones: In 1981, IBM proudly introduced its new PC. It, too, was slow and weak when compared to existing mainframes, but it had that magical name on the front: IBM. "Here, at last, is an inexpensive computer meant for business," said the computer experts. "Because it comes from our trusted business friends at IBM." The story of what happened next is filled with legend and innuendo, and possibly even unethical or criminal activities. Please read on! The three most important building blocks of any computer are its processor, its operating system, and its BIOS (Basic Input/Output System.) The BIOS is what makes a computer work, by providing the communication protocols used between the operating system, the processor, and all of the other components inside the box. But, IBM didn't own either the processor or the operating system inside its PC. The only thing IBM owned was their proprietary BIOS. Since the true facts have never been proven, and we don't want to be sued for slander, let's just say that it didn't take long for a group of companies to "acquire" the IBM BIOS codes. Once those codes were available for purchase, it was possible for anyone to make an exact duplicate of the IBM PC. All you had to do was obtain a copy of the IBM BIOS codes, buy a processor from Intel, and buy an Operating System from Microsoft. (Most of the other parts inside a computer can be picked up at your local electronics store.) The CLONES were born, and quickly overtook IBM in sales of personal computers. Who enjoyed the benefits? Intel and Microsoft. They were able to sell their products to any company that wanted to sell a duplicate of IBM's personal computer. The Moral of the Story: One of the most often heard criticisms of Apple Computer is that they didn't "Open their systems to other manufacturers like IBM did." Please, don't ever make the mistake of believing this. International Business Machines DID NOT give their permission for anyone to build an exact duplicate of their new PC. In fact, IBM eventually sued several clone manufacturers in court. But it was too late. Their proprietary BIOS information had already been spread around too far. IBM lost the suits and had to accept that they were now forced to sell against cheap copies of their very own products.
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HOME . SERVICES . HELP DESK . RESOURCES . WHY MAC . CREDENTIALS
Copyright 1998, 5-Minute Mac Consulting, Wampum, Pennsylvania, USA