Part 13 - A walk in the PARC
Just 2 years after the introduction of the IBM PC, Business Week magazine ran a cover story in October 1983 declaring IBM the Winner of the race for the PC marketplace. 1983 was a bad year for many other computer companies which had drastically reduced earnings or went bankrupt. Even Apple computer had its problems, falling behind in sales to IBM and having what looked like a dismal new product failure in its Lisa computer - which coupled high technology with a high price that noone was buying. This disappointment followed the Apple III, another product failure. The future certainly looked rosy for IBM, and many business analysts and reporters thought that IBM had really won the battle.
But IBM had never gone for a walk in the PARC, as had Apple's Steve Jobs, and Microsoft's Bill Gates, and so IBM had not seen the future of computing.
PARC stands for the Palo Alto Research Center, created by the Xerox Corporation in the early 1970's as a think tank for computer research. Unfortunately for Xerox it was only - that - a think tank. Xerox never capitalized on the major PC technologies thought up and made into working prototypes at the PARC. They had created what some people say was the true first personal computer - the Alto - back in 1972, and from this Think Tank came most major PC world technologies, including the concept of a Graphical User Interface with Icons, the handheld mouse, object oriented programming, pc networking, desktop publishing and laser printing.
In 1979 Apple Computer allowed Xerox to buy a million dollars of Apple stock in exchange for allowing a few key Apple people - including Steve Jobs - to view inside the Xerox PARC and talk to the think tank people for a limited time. Jobs and his Apple associates were literally amazed at the technology they viewed, but they were more amazed that Xerox wasn't doing anything with it. To the Xerox scientists, the Apple people were the first people they had talked to who understood what they were doing. Some of these scientist who worked at the PARC later went to work for Apple and Microsoft, or started their own companies.
From this brief visit, Apple's perception of what a personal computer should be was changed instantly, and they began planning to produce a new computer which would be based on the ideas they had seen at the PARC. In 1980, Microsoft's Bill Gates also had an opportunity to see what was inside the magical kingdom. In these early days of the microcomputer revolution, Apple and Microsoft actually worked very closely together on many projects.
So when IBM announced its personal computer in 1981, the Apple people were dismayed both at how bad it was technically - and how well it sold. Even Microsoft - who had come up with the operating system for it and the Basic language, also knew at the time how much better a personal computer should really be.
In 1983 Apple introduced its first computer based on PARC technology - the Lisa - which sold for over ten thousand dollars, and which used a mouse. It went nowhere - based more on its price than its capability. Things had changed internally at Apple by this time. The company had become a corporation. Steve Wozniak had been injured in a plane crash and had gone into semi-retirement. Apple had hired Pepsi-Cola's John Sculley as its president to lead the company to market domination, and Steve Jobs was fighting for his own survival in the corporate power structure. Jobs took over a secret division that Apple insiders referred to as the "pirates" and moved forward on a secret mission.
During the 3rd quarter of the Super Bowl in 1984, people saw an advertisement which left people saying "What was that ?" and which marked the introduction of the Apple Macintosh computer, a smaller and better version of PARC technology, reasonably priced at $ 2495, and portable - a computer which Apple advertising said was "For the rest of us.."
The Mac was an immediate success in many areas. Bill Gates even said it was finally a computer his Mom could use. It drew a cult following of technology junkies and IBM haters, despite the fact that it was somewhat underpowered and radically different from all the other pc at the time. The Mac soon developed powerful niche market segments. Meanwhile, IBM had stumbled with its PC Jr, and the Mac rained all over IBM's introduction of its 80286-based Advanced Technology computer later that year.
But even more important, was that fact than now there were some clear choices in the emerging PC marketplace as to how computers should actually work, and next week we'll examine the saga of Microsoft and IBM's stormy relationship, and how IBM managed to lose the PC marketplace as quickly as it had almost won it.
On to Segment 14, "Send in the Clones Again - Freud would have said GUI-Envy"
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