Hobbyists to main-stream: PC crossing the chasm


Photo by Colin Park
Photo by Colin Park

Crossing the Chasm, written by Geoffrey Moore and considered to be one of Forbes’ 20 most influential business books, talks about the challenges that technology marketers face in bringing new technology to wide-spread acceptance. It’s relatively easier to get new technology in the hands of innovators and early adopters. The hardest part is crossing the chasm between early adopters and early majority. Successfully crossing the chasm means profitable commercialisation at scale, while failing to cross means that the technology will pass as immemorable invention.

Intel 4004, one of world's first microprocessors. Photo by John Pilge
Intel 4004, one of world’s first microprocessors, released in 1971. Photo by John Pilge

Up until early 1970s, computers were only owned by military, academic institutions, or large enterprises because they cost so much. There had been few early attempts to make smaller and cheaper computers so that everyone could own one (i.e. personal computer), but they were still too expensive, and the reason for owning one wasn’t compelling enough for average persons. But the idea persisted. Soon, few technological advances came about to make the idea even easier to realise. Among it was microprocessor, which made it possible to put a computer’s Central Processing Unit (CPU) inside one small Integrated Circuit (IC) and also made the cost of making CPU cheaper.

Innovators: the technology enthusiasts

MITS Altair 8800 kit computer. Instructions to the computer was given through the switches and results was read through the LEDs. Photo by Ed Uthman
MITS Altair 8800 kit computer. Instructions to the computer was given through the switches and results was read through the LEDs. Photo by Ed Uthman

In 1974, Intel‘s Frederico Faggin & Masatoshi Shima released Intel 8080 microprocessor. At the end of the year, Faggin left Intel and founded Zilog. He also recruited Shima-san to Zilog. That same year, Micro Instrumentation & Telemetry Systems (MITS) designed a personal computer kit based on Intel 8080 microprocessor to be sold to hobbyists. Looking to publish an article on computers for a while, this kit was covered by Popular Electronics magazine for January 1975 edition that hit the news stand on the end of 1974. Popular Electronics named the kit Altair 8800 as MITS had left the naming to them. By February 1975, MITS was flooded with 1000 orders of Altair 8800 at price of $439 each as un-assembled kit. Bill Gates and Paul Allen, founders of Traf-o-Data, read the Popular Electronics article and contacted MITS to offer them first interpreter of the BASIC (Beginner’s All-purpose Symbolic Instruction Code) programming language on their kit. With only Altair 8800 programmer guide in possession, but not actual Altair 8800 kit, Paul Allen modified his Intel 8008 (good starting point for Intel 8080 that Altair 8800 used) emulator for PDP-10 computer in order to be able to produce this software. After seeing the demo, MITS agreed to distribute this software, and Bill Gates & Paul Allen founded a new company called Micro-Soft for producing this.

At the same time, Intel also produced and sold its own computers called Intellect-8 based on the same Intel 8080 microprocessor for $10,000. In the same year, MOS Technology released its MOS Technology 6502 microprocessor. In 1976, Zilog released its Z80 microprocessor, which was made to be compatible to Intel 8080. Still in 1976, other kit computers entered the market, for example $666.66 Apple Computer, based on MOS Technology 6502 microprocessor, and Processor Technology Sol-20, based on Intel 8080 microprocessor and ran PTDOS (Processor Technology Disc Operating System). Digital Research launched an Operating System for Intellect-8 in 1977 called Control Program for Microcomputers (CP/M).

Early adopters: the visionaries

1977 gave birth to the successful “1977 trinity” producers of personal computers. There were few things that set them apart from earlier personal computers: they were sold as assembled units (not kits), the input/output was done in friendlier ways: keyboard and monitor, and they would be equipped with multiple software usable for average persons or normal businesses.

  • Tandy TRS-80. This was based on Zilog Z80 microprocessor and cost $599 with monitor. It ran TRSDOS (Tandy Radio Shack – Disc Operating System) and could be equipped with pay-roll or personal finance software. Since Z80 microprocessor was compatible with Intel 8080, TRS-80 could also run CP/M Operating System and its related application software. It sold 10,000 units within the first 1½ months.
  • Apple II. This was based on MOS Technology 6502 microprocessor and cost upward of $1,298 and had colour display. Because of the display, it would be favourite platform for the best computer games for the next few years. It ran Apple DOS built by Shepardson Microsystems
  • Commodore PET (Personal Electronic Translator) 2001. Also based on MOS Technology 6502, it cost $795. It ran Commodore BASIC programming language interpreter (modified from interpreter it licensed from Micro-Soft) and could run application software written in BASIC

In 1978, Wayne Ratliff, a Martin Marietta contractor working for NASA (National Aeronautics & Space Administration) Jet Propulsion Laboratory (JPL), ported JPL Data Information System (JPLDIS) to PTDOS and named it Vulcan Data-Base Management Software (DBMS). In 1979, the first personal computer killer application arrived: a spread-sheet software called VisiCalc from Personal Software that initially only ran on Apple II. As in paper-based spread-sheet, VisiCalc enabled people to perform calculation on complex table of numbers, very useful for accounting and other fields. In the same year, MicroPro also started marketing a word processor software called WordStar for CP/M Operating System. Word processor made it easier to compose and edit large amount of text in documents, contracts, fiction, etc. Also in the same year, Epson MX-80 dot matrix printer was released and quickly became best selling personal printer. With personal printer, user can print whatever document that they may be composing using word processing application inside computers.

Surprisingly, the 1979-1980 products coming from the 1977 trinity had mixed results

  • Tandy had created separate product for each market segment:
    • TRS-80 Model II aimed for higher-end business needs, with newer Z80A microprocessor, larger memory, and disc drive, and starting price of $3,450
    • TRS-80 Model III at $799 was an upgrade of the original TSR-80
    • TRS-80 Color Computer was created for low-cost segment, based on powerful but more expensive Motorola 6809E microprocessor. It ran Color BASIC programming language interpreter made by Micro-Soft. It couldn’t really compete in its segment because it had to forgo dedicated video and audio hardware to keep the price reasonable at $399, and hence the video and audio had to be processed directly by the CPU. It also didn’t come with monitor, relying on connection to television set for display
  • Apple III at starting price of $4,340 had stability problems that lead to poor sales. It was still based on 6502 microprocessor architecture
  • Commodore VIC-20, a $299.95 low-cost computer (without monitor) also based on MOS Technology 6502 microprocessor, was the first computer to sell 1 million units. This cemented Commodore undisputed leadership in the low-cost computer segment, which is not always a good thing

In 1980, George Tate & Hal Lashlee founded Ashton-Tate (Ashton was the name of Tate’s pet) to sell a version of Vulcan that had been ported to CP/M Operating System and renamed dBASE. In 1981, 2 games that would ultimately define the Role-Playing Game (RPG) genre were released for Apple II first before other platforms: Origin’s Ultima & Sir-Tech’s Wizardry.

Early majority: the pragmatists

IBM PC. Photo by Engelbert Reineke
IBM PC. Photo by Engelbert Reineke

IBM (International Business Machines, 8th largest US company which held 62% market share of large mainframe computers at that time) entered the personal computer market in 1981 with its IBM Personal Computer (PC), based on Intel 8088 microprocessor, with price starting from $1,565. IBM deliberately chose to use largely off-the-shelf components to construct this in order to keep the costs reasonable. It was powered by IBM PC-DOS, which was licensed then modified by Microsoft from Seattle Computer Products’ QDOS (Quick & Dirty Operating System), itself was a port of CP/M for Intel 8086 microprocessor. Within a year, IBM managed to sell almost 100,000 units of IBM PC. Due to its design using mostly off-the-shelf components, and the non-exclusivity of the PC DOS deal between IBM & Microsoft, by 1982, just 1 year after launching, there were already numerous other vendors (e.g. Compaq) trying to produce IBM PC-compatible products. This helped in reducing the cost of IBM PC platform in competing with other architecture.

Many software developers were attracted to make sure that their product run on IBM PC, and this would prove crucial for its market share expansion. Within 1 year of PC’s launching, popular CP/M software were already being ported to PC platform, for example: WordStar & dBASE. In the same year, Satellite Software International ported their WordPerfect word processor software from Data General to PC platform. In 1983, Lotus 1-2-3 spread-sheet software was released for PC platform by Lotus, a company founded by Mitch Kapor, a former head of development in Personal Software, maker of VisiCalc. Since it was written in Intel Assembly low-level programming language, which is very basic and is more like machine language, it ran faster than VisiCalc on PC platform.

IBM & the 1977 trinity updated their offering in 1983 – 1984:

  • IBM released $4,995 IBM PC XT (eXtended Technology) in 1983, still based on the same Intel 8088 microprocessor but with addition of 10 MB hard disc drive, followed by $4,000+ IBM PC AT (Advanced Technology) in 1984, based on newer Intel 80286 microprocessor
  • Aside from updating its traditional product lines, Tandy introduced new $2,750+ product line partially compatible with IBM PC called Tandy 2000 based on Intel 80186 microprocessor in 1983, which faced intense competition from other IBM PC compatible makers like Compaq & Dell
  • Apple released $9,995 Apple Lisa in 1983, based on Motorola 68000 microprocessor (the same microprocessor used by Silicon Graphics’ $37,500 IRIS 1000 graphics terminal released in the same year as well as Sun Microsystems’ $8,000 Sun-1 UNIX workstation from the year before). It ran Lisa OS, which was one of the first Graphical User Interface (GUI) on personal computers, with concepts borrowed from Xerox Alto from 1973, which in turn was based on proof-of-concept done by Douglas Engelbart from Stanford University in 1968. The unit was slow though, resulting in disappointing sales. Apple then released a less expensive $2,495 Apple Macintosh in 1984, also based on Motorola 68000 microprocessor
  • Commodore initiated price war to maintain its leadership in low-cost segment using the $595 Commodore 64 (based on MOS Technology 6510 microprocessor) released earlier in 1982

By 1984, within one year of launching, Lotus 1-2-3 became the dominant spread-sheet software on PC platform. At the same time, there were already more than 1,000 business software running on dBASE. In the same year, Hewlett Packard released 2 printers using very different technologies: the $3,495 HP LaserJet printer (which was based on Canon LBP-CX printing engine) as well as $495 HP ThinkJet ink-jet printer. These greatly expanded the quality of document print-out that can be produced from PCs. By second half of 1980s, WordPerfect overtook WordStar for PC word processing. Microsoft, Lotus, and WordPerfect became the “big 3” of software industry. A 1985 survey by Fortune magazine showed that 56% of people owned IBM PC or compatible units, 16% used Apple computers, while the rest of the brands was each below 5% share.

A release of Aldus PageMaker in 1985 for Apple platform, combined with Apple’s superior GUI, and release of Apple’s own AppleWriter laser printer based on Canon’s LBP-CX printing engine, cemented Apple’s dominance in desktop publishing industry for some time. Most of the best games released in 1985-1987 were also created for Apple platform before ported to other platforms: The Bard’s Tale from Interplay, Kampfgruppe & Mech Brigade & Gettysburg: The Turning Point from Strategic Simulations Inc (SSI), and Might and Magic from New World Computing. 1987 Apple-only release of PhotoShop, created by Thomas & John Knoll and distributed by Adobe, further solidified Apple’s position in desktop publishing.

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