The IBM PC 5150: How Project Chess Won the Market and Lost the Empire

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An analyst once said that IBM building a personal computer would be like teaching an elephant to tap dance. The company's normal development cycle ran four to five years, and it made every part of its machines itself. But by 1979 the microcomputer market was worth $15 billion and growing more than 40 percent a year, and Tandy's report of over 100,000 TRS-80s shipped in a single year was the wake-up call. IBM president John Opel put William C. Lowe and Philip Don Estridge in charge of a group of about 150 people in Boca Raton, Florida, with a mandate to deliver a prototype in 30 days and a product in one year.

This episode tells the story of Project Chess and the Model 5150, released on August 12, 1981. To hit the deadline the team bought nearly everything off the shelf: an Intel 8088 processor, an operating system from a young company called Microsoft, printers from Epson. Then they published the specifications of the system bus so anyone could build expansion cards. The strategy made the IBM PC the standard for the whole industry, and it also handed that industry the blueprint to replace IBM.

• IBM passed over the Motorola 68000 and its own 801 RISC chip for the Intel 8088, whose 8-bit bus allowed cheaper supporting components while still addressing a full megabyte of memory.
• The $1,565 base model came with 16 kilobytes of RAM, no monitor, no disk drives, and a port for a cassette recorder. Its 63.5 watt power supply could not run a hard drive.
• Buyers chose between the MDA card's crisp text and the CGA card's color graphics, though programs like AutoCAD let users install both and run two monitors at once.
• Ads featuring Charlie Chaplin's Little Tramp made the machine approachable. The team had forecast 220,000 units over three years, yet IBM sold more than 750,000 in 1983 alone.
• Compaq used clean room design to recreate the copyrighted BIOS legally, launching the clone market that eventually led IBM to sell its PC business to Lenovo.