The Colossus That Works

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a twelve-member group in Boca Raton, Fla., led by Philip Estridge, a division vice president. The team was first assembled in July 1980 and told to develop a competitive and easy-to-use machine within a year. "Twelve-hour days and six-or 6½ day weeks were commonplace," recalls Estridge. The members made some key moves along the way that help account for the PC's enormous popularity. The planners decided, for example, to build the PC around a 16-bit microprocessor rather than an 8-bit one, which was at that time the industry standard. This move permitted the PC to run faster and handle more complex programs. Says Estridge: "We chose to up the power of the machine so that it could be used without too many changes for the next decade or so."

The group broke with tradition by setting up a so-called open-architecture scheme that makes the PC's technical specifications available to other firms. The idea was to permit outside companies and individuals to write software or build peripheral equipment for the PC and thereby expand its appeal.

The project, however, did not always unfold smoothly and without flaws. Early users discovered that the machine misplaced decimals in certain calculations, but the problem was quickly solved. Also, some owners complained that the keyboard had been poorly designed.

But those problems did not impede sales. "Within just a few months," says Morgan Stanley's Ulric Weil, "the IBM PC was the standard for the personal-computer market." Orders for the machine, which has a starting price, with standard accessories, of about $3,200, have been pouring in so fast that some buyers have had to wait several months to get one. Last year IBM sold an estimated 200,000 PCs, and this year sales of 800,000 or more are projected. In June, the Travelers Insurance ordered 10,000 PCs, to be delivered over the next two years. New companies with names like Compaq Computer and Eagle Computer have sprung up making machines that are modeled on the PC. The explosive growth of the IBM entry has set up a confrontation with Apple Computer. Executives of the California-based company, which introduced a fully assembled personal computer in 1977, profess not to be worried. They even greeted the PC the day after it was announced with ads that read "Welcome IBM. Seriously. Welcome to the most exciting and important marketplace since the computer revolution began 35 years ago." Whatever the intent of the message, some IBMers found it condescending.

Apple Chairman Steven Jobs claims that IBM has expanded the personal-computer market and that his company's share of it has gone on growing at the expense of weaker rivals like Tandy, which owns Radio Shack. Says he: "Apple has a higher market share than IBM, and we intend to keep it." Indicative of how serious Apple considered the challenge was its decision to hire Pepsi-Cola President John Sculley, a marketing expert, to serve as Apple's president and chief executive. "This is not a bruising fight for market share between Apple and IBM," says Sculley. "It's a sorting out of who the major participants will be."

Some observers are far less confident about Apple's prospects. Gene Amdahl knows IBM from the perspective of a rival and a former 13-year employee. Says he: "IBM waits until some brash young