The history of the microprocessor and personal computer: 1980 - 1984

IBM PC Model 5150 and Attack of the Clones

The only remarkable fact about the product that revolutionized the personal computer business was that it was created by IBM. If any other company of that era created and launched the IBM Personal Computer Model 5150, then in the future they would have looked at it with respect, but not as a product that changed the face of the industry.

IBM's position ensured that the PC initiates the standardization process necessary for the widespread dissemination of technology. The same provision guaranteed that competitors would have free access to the Model 5150 technical specifications, because IBM was obliged to disclose such information in accordance with the settlement agreement of the US Department of Justice in 1956, the terms of which the company complied with because it had previously used monopolistic methods of reference business.

A third factor in the importance of the Model 5150 legacy was the supply of components from independent equipment manufacturers. The IBM business was built on internal design and development of almost all hardware and software, which maximized revenue. The price paid was a decrease in market flexibility: corporate conflicts and competition between departments within such a monolithic company increased the inertia of decision-making processes.

Datamaster was a universal computer with a CRT text display, keyboard, processor, memory and two 8-inch floppy drives connected in one case. (Photo: Oldcomputers.net ) The

Model 5150 was not IBM's first attempt at creating a personal computer: at least four previous projects were interrupted due to the fact that the market was moving faster than the IBM leadership made decisions. The System / 23 DataMaster business computer, equipped with an Intel 8085 processor, also suffered from a lengthy development process that began in February 1978. The introduction of the DataMaster system in July 1981 led to changes in the design strategy; In addition, the design department was tasked with working on a new PC project.

Initially, IBM planned to design a personal computer based on the Motorola 6800 processor at its research center in Austin, Texas. IBM's marketing department believed that PCs should be sold through Sears, Roebuck & Co. stores, but the balance swayed when the release schedule lagged. Motorola 6800 processor and auxiliary chips.

In parallel with designing in Austin, a possible Project Chess plan was prepared, which seemed to be developed when Atari asked IBM to create a personal computer if IBM really needed it. IBM received official approval when project manager William (Bill) Lowe promised the project would be ready in a year. To fulfill this promise on time, he had to turn to suppliers outside of IBM.

It only remained to choose a processor and an operating system for the PC. Lowe and Estridge were shrewd enough to realize that IBM's senior management would not favor PCs, which threatened the company's profitable business selling cars for business (at the time, the System / 23 DataMaster terminal with a printer sold for about $ 9,900).

It seems that the use of an 8-bit processor was initially considered, which would make it possible to use the MOS Tech 6502, Zilog Z80, or Intel 8085 in the design. However, IBM engineers preferred 16 bits, as did Bill Gates, who lobbied IBM for using a 16-bit machine to demonstrate all the features of the operating system developed by his company. The 32-bit architectures Motorola and National Semiconductor (68000 and 16032, respectively) were supposed to go into production after the completion of the one-year deadline of Lowe.

The final solution was a compromise between 8 and 16 bits to mitigate compatibility issues with existing software and expansion hardware. At the same time, cost was reduced due to the choice of a cheaper processor and auxiliary chips, and a significant performance gap was saved between the PC and IBM business machines.

IBM’s decision making has been simplified as the microprocessor market waged a war of attrition. MOS Tech was acquired by Commodore after the financial collapse of MOS caused by low prices for Texas Instrument calculators. The company's efforts have shifted from innovation to capitalizing on the success of 6502. The Western Design Center (WDC) in the 6500 series has finally implemented 16-bit computing, but, as with many other microprocessor companies, competition had already made them unnecessary by the time it entered the market.

Zilog’s earnings also suffered while its main shareholder, and later its parent company, Exxon, was happy to see how the inexperienced Zilog got involved in a suicidal product diversification process. Research and development costs exceeded 35% of revenue, and the expansion of the development assortment caused a decline in Z8000's own 16-bit processor; at the same time, the desires of Exxon and the relative managerial inexperience of Federico Fagina became clear.

Fajin and Ungermann founded Zilog to create microprocessors, but Exxon acquired Zilog as a gear in a machine that, along with other electronics and software companies, was supposed to create a great project that, according to Exxon, was supposed to compete with IBM. All this led to a disaster with the loss of billions of dollars.

Zilog’s revenue decline, even though the Z80 was used in a huge number of computers, terminals and industrial machines, cascaded into the company's secondary suppliers. Having an AMD license for Intel 8085 did not give the same rights to its descendant - the 8086 processor. Because of this, in search of a 16-bit processor, Jerry Sanders was forced to contact Motorola or Zilog, because the National Semiconductors project seemed promising, but did not justify itself.

Amid delays in the development of Motorola and AMD's inability to create its own competitive architecture, Zilog looked like a more attractive option. In addition, the company was a relative newcomer, which means it is easier to work with, and therefore AMD chose the Z8000. The lack of backward compatibility of the processor with 8-bit software doomed its sales to failure, and customers attracted by the Z80 quickly switched to Intel. While Zilog made up for the defeat with the successful Z80, and the world's largest oil company covered losses, AMD did not have such opportunities.

For its part, Intel planned a big leap in the processor architecture immediately after the creation of the 8080. The planned chip, with the working name 8816, was supposed to be four times the size of the 8-bit chip, possess 16-bit and 32-bit functionality, as well as a set features specific to modern processors.

On April 14, 1976, it became obvious that such an architecture would be terribly time-consuming to manufacture, and most likely did not have time to appear on time to compete with 16-bit chips by Motorola, Zilog, National Semiconductor and Texas Instruments.

Intel needed at least an intermediate architecture to counter competitors and continue to grow. Terry Oddendik, the head of software, accepted the challenge and set about designing a new processor architecture in just 10 weeks - it was estimated that this was the maximum time to be able to make a chip in a year. Opdendik chose Steve Morse, an engineer specializing in software, the author of the devastating review 8816, who initiated this project. For the first time, not one of the software engineers was involved in the design of the architecture of the Intel chip.

The crystal of the 16-bit Intel 8086 microprocessor. 8086 was the beginning of the famous x86 architecture, which ultimately turned out to be the most successful line of Intel processors.

Architecture design work began in May with a team of two people: Morse and project manager Bill Polman; The first version of the architecture appeared on time, in August. The architecture had to meet two requirements: the availability of backward compatibility with 8080 and addressable memory up to 128 KB - two times more than that of 8080.

The solution to the second problem was implemented rather clumsily: using segmented addressing, which allowed the use of 20-bit memory addresses in a chip that processes 16-bit data; this made it possible to address up to 1 megabyte of memory. Despite the inefficiency of 8086, released June 8, 1978, it allowed Intel to defeat both Motorola and Zilog in the competition to create a commercially successful 16-bit processor.

For 8086 the following year, Intel released the 8088 at a reduced price, in which the external bus width was reduced compared to the 8086 from 16-bit to 8-bit; the processor was positioned as a more economical purchase for users who want to extend the life of their systems based on the 8080 and 8085, as well as related software.

Although Motorola's own 16-bit processor called 68000 was released 15 months after 8086, its architecture had advantages over 8086, and right after the release began, it allowed Intel to take market leadership. While Zilog was perceived as a small company, despite all the financial injections of Exxon, Motorola was a respectable semiconductor company with a long history and great popularity in the market.

In the original Apple Macintosh and its first descendants, the Motorola 68000 processor was used as the CPU.

Until that moment, Intel had never had to "sell" its products to customers. Its product lines were generally superior to their competitors (or at least matched them), and demand often exceeded supply. Therefore, Intel's level of excellence in sales can be assessed as a mixture of complacency and arrogance; buyers were waiting for a chance to disagree with the company's position.

Against this backdrop, Intel launched its first marketing campaign across the country; she was driven by an eight-page report by operations engineer Don Buckhout, which explained in detail where Motorola architecture was ahead of Intel architecture. The company set itself the task: every month throughout the year, each of the 170 sales representatives had to win the competition (i.e. 2,000 victories by December 1980) as part of Operation Crush. The name was chosen by analogy with the Denver Broncos American Football Club defense strategy; In addition, the campaign aimed to “crush” Motorola.

Faced with a competitor in the face of a better processor, Intel focused on the system as a whole, with auxiliary chips (in this area, Motorola's positions were relatively weak). The main business of Intel was processors, while for Motorola they were only a small share of production. Intel shamelessly played on a sense of fear, indecision and doubts of customers, asking the question: can Motorola provide support, integration and release of new processors?

Although Intel did not like the corporate image of those who had to deal with it, the level of technical support and the company's products remained undeniable. Intel abandoned its policy of banning product advertising prior to development, allowing it to advertise its future product line in a one-hundred-page catalog dedicated to chip development.

Instead of focusing on having a marketing and technical advantage of 68,000, Motorola swallowed the bait and tried to respond to Intel products with its more modest alternatives. From then on, the Motorola and 68000 processor advantages began to melt.

Intel set itself the goal of winning 2000 competitive victories by December 1980. The success of Operation Crush was such that the final number of victories was close to 2500; partially, such results were stimulated by the prize for the greatest number of victories received by sales representatives and their operating engineers. Bill Handel won the prize with nearly 100 contracts; among them was a draft of a corset with electronic temperature monitoring, which was to notify its owner about the optimal time for conception. As the first prize, Handel and his operations engineer received 86 Intel shares; in addition, they, along with other sales representatives who have reached the desired level, were awarded a trip to Tahiti.

Bill Handel won Operation Crush, but sales representative Earl Wathstone took the opportunity to call the IBM development lab in Boca Raton, even though IBM had always designed its processors internally. To his good fortune, Project Chess has just been launched. Intel used Operation Crush to maximize the popularity of the 8086, but the biggest of 2,500 victories was that the truncated 8088 hybrid chip with an 8-bit external / 16-bit internal bus (developed based on 8086) ended up in the IBM PC Model 5150.

IBM Personal Computer model 5150 with IBM CGA monitor, IBM PC keyboard, IBM 5152 printer and paper stand.

Like the company's mainframes, the IBM PC was designed so that users had the opportunity to upgrade it. However, mainframe modularity was based on devices created by IBM, and PCs could provide much greater capabilities provided by third-party vendors. The computer had support for two separate graphics cards - CGA (Color Graphics Adapter), designed for the home user, and MDA (Monochrome Display Adapter) with a matrix printer port for commercial users. The IBM-designed motherboard had a sufficient number of expansion ports (five) for most users, as well as a fairly wide range of RAM options, drives and printers.

IBM also outsourced the choice of operating system. Many associate the long development process of DataMaster with changes in the design philosophy: at the development stage, the BASIC interpreter was chosen for the system, and IBM took note of this lesson. The exact sequence of events that led IBM to choose Microsoft is not entirely clear; but one thing is clear - it started with IBM contacting Gary Kildall at Digital Research.

At the stage of the personal computer industry, many vendors chose Kildall's CP / M as the operating system. Kildall focused on developing the OS, while Bill Gates and Paul Allen focused on creating variations of the BASIC programming language. As if there was a tacit agreement, and not one of the companies invaded the other's area of ​​specialization.

This peaceful coexistence has been tarnished by the convergence of Digital Research Inc. (DRI) with Compiler Systems (with the subsequent acquisition of the company), which was led by one of Kildall's former students, Gordon Eubanks, who wrote his own version of BASIC (CBASIC) for IMSAI. In the process of choosing an operating system, IBM made an appointment with Kildall, intending to adapt CP / M to the 8086 and 8088 processors.

When IBM representative Jack Sams arrived at DRI to discuss the proposal, Kildall was not in the office; Having learned the terms of IBM’s infamous one-way NDA, Dorothy Kildall refused to enter into a contract without prior legal advice. Kildall probably came to the meeting many hours later and it was too late to discuss the details. Sams later flew to Seattle to meet with Bill Gates.

Obviously, Kildall’s behavior was contrary to Sams’s corporate philosophy (and IBM itself). The level of professionalism and respectfulness that should have been consistent with one of the largest US companies was clearly absent. Also an obvious obstacle was Kildall's slowness in the development of CP / M-86 - an OS compatible with 8086/8088. At the same time, Bill Gates clearly understood the status of IBM and was ready to meet the demands of IBM, if this helped to build his business.

The only real problem with Bill Gates was that he did not have an operating system that could be sold to IBM. But he knew the people who have it. Gates contacted Seattle Computer Products, which used 8086 in the SCP-200B development kit. When selling the kits, SCP, like other 8086 sellers, was faced with the lack of an OS. The company decided to design its own OS. However, “designing” in this case is too big a word, because Tim Paterson from SCP actively borrowed the code from CP / M, carefully copying its API calls (which the OS uses to interact with other software).

The resulting QDOS (Quick and Dirty Operating System) was completed in July 1980, a month after IBM began searching for the OS in DRI and Microsoft, but its release only began at the end of September. The loss of SCP instantly turned into a huge find for Microsoft, as Bill Gates and Microsoft's first commercial director, Steve Ballmer, offered IBM a license agreement to supply a new operating system, software for it and four programming languages. Under the terms of the agreement, Microsoft was supposed to receive royalties.

An important factor was the fact that Microsoft reserved the right to sell licenses for MS-DOS to other providers.

Paul Allen and Bill Gates are next to the first desktop systems.

IBM accepted the terms and paid an advance of more than $ 700 a week after QDOS was acquired by Microsoft. The task of acquiring the operating system and hiding the possibility of building an empire from SCP was given to Paul Allen, who agreed with SCP on the sale of each license for 10 thousand dollars plus 5 thousand for disclosing the source code; the transaction was concluded with an advance payment of 10 thousand. It was understood that Gates and Allen had a large number of licensees whose names were hidden by the terms of the contract under which the list of Microsoft customers should be kept confidential. In fact, there was only one client on this list.

Soon after, IBM needed to remake the 86-DOS, as the OS was now called, to fit its needs, so Tim Paterson went to work at Microsoft. By the time the IBM PC was ready for release, the owner of the SCP, Rod Brock, was approaching bankruptcy because there were no signups for acquiring the 86-DOS license. The company’s programmer left it for a long time, and Brock did not have enough money to stay afloat, so he accepted Gates’s offer to sell the 86-DOS company for 50 thousand dollars - after ten years this amount was the equivalent of two minutes of sales at the peak of popularity of this OS, already called MS-DOS.

The first version of DOS did not have support for hard drives, directories, or downloadable device drivers. (Photo: OS / 2 Museum )

An important aspect for IBM was the integrity of the supply chain. For other IBM products, this meant delivering products from one department to another. Outsourcing component development was standard practice for an industry in which problems with manufacturing and product release were common, so despite Intel’s strong objection, IBM demanded to find a secondary supplier of 8088.

Deliveries from the secondary manufacturer also had another advantage - there was another level of quality control, because the processors of each of the companies could be compared in terms of performance and compliance with the delivery schedule. IBM preferred a secondary supplier, AMD, which was looking for a replacement for its poorly-sold licensed copy of the Zilog Z8000 called AMZ8000.

Motorola's share of the microprocessor market as a result of Operation Crush fell to 15%, so the candidate was obvious.

Intel and AMD entered into an agreement in February 1982. Intel, for its part, complied with the requirements of IBM, and AMD, knowing that Intel’s position was weakened by the rigidity of IBM, got a long-term licensing agreement. AMD had to pay royalties to Intel for three years, and the payment for this period was calculated according to whether Intel decided to consider licensing AMD products. This part of the agreement will be valid for at least five years out of ten for which it was adopted.

As the release date of the IBM PC approaches, the main point of discussion was the availability for the consumer of a computer created by the iconic American company. For computer fans, it was important to use the BIOS, IBM’s attention to system integrity, implemented as an automatic power-on self-test (POST) test of 14 stages, and a detailed user manual - today all this is taken for granted, but for 1981, this was a real breakthrough.


None of the basic configurations of the IBM PC can be considered the "standard" of the company, but it is usually believed that a typical model sold for $ 1,595. The price of the full-featured version exceeded 6 thousand dollars. It included additional equipment - a dual floppy drive, memory expansion kits, as well as additional OS (BASIC was included in the price of the kit, MS-DOS cost another $ 40, CP / M-86 - $ 240, and the UCSD p-System - $ 695; CP / M-86 was included in the list of options to avoid any anti-advertising from Digital Research).

The CP / M-86 was a version of the CP / M OS created by Digital Research for the Intel 8086 and Intel 8088.

IBM PC owners who wanted to run the CP / M machine could purchase an additional coprocessor board, for example, the Xedex Baby Blue card with the Z80 processor . The average price of 13,533 PCs sold before the end of the year (as opposed to prepaying more than 35 thousand cars) amounted to approximately 3,000 dollars. For six months, sales of the IBM Model 5150 reached 50 thousand copies, and a year later rose to 200 thousand.

At that time, the advent of the Model 5150 did not change the situation on the personal computer market. For many, the car was too expensive, as in the case of Apple II, sales were mainly increased due to business users. With its reputation, IBM PC has become a reliable choice. The impact of PCs on the industry was not so noticeable until the IBM label became less attractive than the IBM Compatible.

The 13,533 PCs sold by IBM in the final months of 1981 accounted for less than 1% of total sales and 1.9% of the profits of the $ 3 billion personal computer market. For example, sales of Radio Shack and Apple accounted for 37% of the market (20% and 17%, respectively). The first achievement of the IBM PC was the almost instant growth of the expansion board market and the creation of a solid foundation for software developers.

Due to this growth in 1982, sales of personal computers doubled compared to the previous year - 2.8 million devices were sold worldwide. Much of this growth was driven by the advent of the Commodore 64, which changed the PC market budget previously owned by the Commodore VIC 20, Atari 400 and 800, as well as the TRS 80. At the same time, lower-end machines like the Sinclair ZX81, which were sold, appeared on it. for money that previously could only buy a pocket calculator.

These entry-level cars have expanded the market for computer entertainment, and Commodore 64 has developed their success by borrowing the idea of ​​sprites from Atari 2600, albeit with significantly redesigned graphics. 1982 also marked the founding of SGI, Hercules, Diamond Multimedia, Orchid Technology, Number Nine, Autodesk AutoCAD, Electronic Arts. This year, On-Line turned into Sierra On-Line: thanks to IBM, the company grew in size, as happened with MSA's Peachtree Accounting software, IUS's EasyWriter, ISS's WordPerfect and Lotus spreadsheet application 1 -2-3.

The venture capital that allowed Lotus Software to start work was partially provided by two people who provided funding for Silicon Graphics (SGI) and Electronics Arts startups. Al Jay Sevin and Ben Rosen also provided half of Compaq Computers' initial capital. Created by three frustrated Texas Instruments engineers, who soon joined many other TI employees, this company thought there was a potential market for a portable version of the IBM PC.

Compaq was far from the first to notice that PC sales were stimulated not so much by the power of the equipment of the machine as by the software available to it, so the ideal product would be one that could use existing software. Due to the fact that IBM itself was paving the way, it was possible to say with great confidence that this standard would succeed in the market - of its own free will or by force. In addition, there was an additional advantage - you could associate yourself (indirectly) with the “blue giant”, positioning your product as compatible with IBM PC (“IBM PC Compatible”).

Companies seeking to "tail up" the market leader were not new. Franklin Computer released an exact replica of Apple II, called the Ace 100, and Apple quickly filed a lawsuit against Franklin, who continued to plagiarize Apple devices until August 1983, when the U.S. Court of Appeals decided against Apple.

The only protection from IBM against such simulators was to be the BIOS and the company's erroneous belief that competitors would not be able to supply components cheaper than the blue giant.

Released in June 1982, the Columbia Data Product MPC 1600 was the first clone of the IBM PC, and although it was almost a third cheaper than the Model 5150, the recreated BIOS reverse engineering was not fully compatible with IBM hardware and software. Eagle Computers, Corona and Handwell tried to go the less expensive way and start with the BIOS of IBM itself, the full code of which IBM included in the PC manual. But that only got them attacked by IBM’s terrifying legal department. Some vendors have also sought to expand the Model 5150's range of capabilities, notably with the Seequa DEC and Seequa Chameleon computers; in both models, along with the 8088, the Z80 was used, and both suffered a commercial failure due to the lack of full compatibility with the IBM PC.

On the other hand, before launching the PC project, Compaq consulted with lawyers and used the “clean room” concept to protect itself - the BIOS programmer had never seen the original IBM code. Phoenix Technologies, when developing its BIOS ROM, used the same development methodology and as a result, any company could acquire ready-made compatibility with IBM for only $ 25 per chip, plus $ 290,000 in royalties.

Compaq Portable was the first fully compatible IBM PC and the first fully portable. (Photo: Maximum PC )

The first Compaq product was Portable Personal Computer, released on November 4, 1982. It turned out to be the first machine to be fully hardware and software compatible with the IBM Model 5150. The first 300 were released in January 1983 and by the end 50,000 were sold — a small fraction of the million computers based on 8,088 sold by this time. Although sales volumes didn’t talk about it (IBM sold half a million PCs in 1983, and Apple sold 750 thousand machines, which equaled the total sales volume of Commodore 64), the advent of clones and, in particular, Compaq announced the end of IBM’s short-term dominance in the market. From that moment on, companies whose products were used in both PC and its imitations, Intel and Microsoft, became the driving force.

Neither Intel nor Microsoft were included in the Apple business, and at first glance it seemed that the company was booming. In June 1983, she sold the millionth Apple II, which continued to sell well until the company focused on the Macintosh. Balanced this success was the relative failure of the Apple III computer, which was doomed to failure due to inattention to details and an automatic assembly line that could not install chips in printed circuit boards with an effort sufficient to provide the necessary contact.

Apple recommended lifting the machine a few inches up and dropping it, repeating the process until all the components fell into place and the computer regained its functionality; such a recommendation seemed to users a completely unprofessional solution. The Lisa project, created thanks to Steve Jobs' visit to Xerox PARC in December 1979, was also a waste of resources. The costs of research and development by Jobs to recreate the wonderful country of PARC with networked Alto workstations exceeded $ 50 million, which was a thousand times the cost of developing Apple II; but at least the technologies were successfully applied in later products, even though Lisa managed to sell with a circulation of only 100 thousand cars.

The fundamental drawback of Apple Lisa was the price. At a cost of 10 thousand dollars per car, the target market was too small and turned out to be even smaller due to the lack of connectivity to the network in Lisa.


Apple optimized the price (and met the demands of consumers) in the Macintosh project, which was being developed in parallel with Lisa. It included many of its functions, but a simpler architecture cost four times less than Lisa. A commercial directed by Ridley Scott, using the motives of George Orwell’s 1984 book, is considered the pinnacle of the advertising art that preceded the successful release of the Macintosh in January 1984.

Thanks to stable sales, the Macintosh will continue to stimulate Apple's market share growth, but its price, and hence revenue, has been steadily declining - Windows 3.0 and, more importantly, office applications related to this OS (such as Excel and Word) have gradually taken over the territory, traditionally owned by Apple Mac.

The total sales of personal computers around the world in the first four years after the advent of Altair amounted to 200 thousand machines. Ten years later, in 1988, they increased to 19 million personal computers. The business, which was started by amateurs in garages, turned into a multi-billion dollar industry, in which the enthusiasts united by the partnership gave way to fierce market competition, which will soon begin to use patents and intellectual property as an economic weapon.

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Source: https://habr.com/ru/post/undefined/