Word: pc
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...most profitable corporation in the world, but lately IBM has been giving more than receiving. Without fanfare or explanation, the computer giant revealed last week that it was cutting wholesale prices on several of its personal computers, including its top-of-the-line PC-AT, as much as 18%. At the same time, sources within Big Blue's network of 2,500 dealers said that the company will now allow them to return unsold inventory without penalty, and that it will shoulder a larger share of their advertising and promotional costs...
...lack of official comment from IBM, the reason for its generosity was obvious: the company is trying hard to rebuild its dwindling share of the $10 billion-ayear personal-computer market. Only 14 months ago, IBM commanded 40% of sales, largely on the strength of the $1,995 PC, which had become an industry standard. Since then, however, a slew of small, feisty computer makers have stolen away a hefty chunk of IBM's business by building personal computers that run software written for IBM PCs but sell for a fraction of the cost. The sellers of these so-called...
...first personal computer in 1981, it designed the machine around two widely available components, the Microsoft Disk Operating System (MS DOS) and the Intel 8088 microprocessor chip. Reason: IBM wanted to use standard equipment so that software companies would write programs for its computer. The only element of the PC that IBM copyrighted was the integrated circuit called the Basic Input Output System (BIOS), which controlled how the software interacted with the hardware. But by building circuits that simulated the BIOS, enterprising computer jocks created machines that could legally run the same software as IBM's machine...
...makers of IBM-compatibles simply clone the features from the PC. Chatsworth, Calif.-based Tandon, which originally built disk drives for IBM, announced last week that it would begin marketing an IBM-compatible that features its own integrated circuit technology. Tandon, which expects to charge $1,155 for its new machine, is able to curb costs by manufacturing some of its components at plants in India...
...measures to compete with the clones. Although the company with its vast resources (1985 sales: $50 billion) depends on PCs for less than 10% of its revenues, IBM does not intend to abandon the market. Industry insiders believe that it is about to market a new version of the PC-AT, with improvements that competitors will have difficulty matching...