, an IBM PC compatible computer running
AutoCAD under
MS-DOS was the first PC to feature an
Intel 386 microprocessor, marking the first time that a major component of the IBM PC
de facto standard was updated outside of IBM. processor processor and
Windows 95 OptiPlex with an Intel
Pentium 4 processor In February 1984
Byte wrote that "IBM's burgeoning influence in the PC community is stifling innovation because so many other companies are mimicking Big Blue", but
The Economist stated in November 1983, "The main reason why an IBM standard is not worrying is that it can help competition to flourish". By 1983, IBM had about 25% of sales of personal computers between and , and computers with some PC compatibility were another 25%. The president of a company that sold compatibles for $2000 wholesale told
PC that they could still be profitable at $1000 wholesale. As the market and competition grew IBM's influence diminished. Writing that even "IBM has to continue to be IBM compatible", in November 1985
PC Magazine stated "Now that it has created the [PC] market, the market doesn't necessarily need IBM for the machines. It may depend on IBM to set standards and to develop higher-performance machines, but IBM had better conform to existing standards so as to not hurt users". Observers noted IBM's silence when the industry that year quickly adopted the
expanded memory standard, created by Lotus and Intel without its participation;
PC said that the company would not be able to introduce its own standard "without creating utter chaos in the market", and
PC Tech Journal wrote, "This must be embarrassing ... IBM didn't deliver. Intel and its partners did". In January 1987,
Bruce Webster wrote in
Byte of rumors that IBM would introduce proprietary personal computers with
a proprietary operating system: "Who cares? If IBM does it, they will most likely just isolate themselves from the largest marketplace, in which they really can't compete anymore anyway". He predicted that in 1987 the market "will complete its transition from an IBM standard to an Intel/MS-DOS/expansion bus standard ... Folks aren't so much concerned about IBM compatibility as they are about Lotus 1-2-3 compatibility". By 1992,
Macworld stated that because of clones, "IBM lost control of its own market and became a minor player with its own technology".
The Economist predicted in 1983 that "IBM will soon be as much a prisoner of its standards as its competitors are", because "Once enough IBM machines have been bought, IBM cannot make sudden changes in their basic design; what might be useful for shedding competitors would shake off even more customers". After the
Compaq Deskpro 386 became the first 80386-based PC,
PC wrote that owners of the new computer did not need to fear that future IBM products would be incompatible with the Compaq, because such changes would also affect millions of real IBM PCs: "In sticking it to the competition, IBM would be doing the same to its own people". After IBM announced the
OS/2-oriented PS/2 line in early 1987, sales of existing DOS-compatible PC compatibles rose, in part because the proprietary operating system was not available. In 1988,
Gartner Group estimated that the public purchased 1.5 clones for every IBM PC. By 1989 Compaq was so influential that industry executives spoke of "Compaq compatible", with observers stating that customers saw the company as IBM's equal or superior. A 1990
American Institute of Certified Public Accountants member survey found that 23% of respondents used IBM computer hardware, and 16% used Compaq. After 1987, IBM PC compatibles dominated both the home and business markets of commodity computers, with other notable alternative architectures being used in niche markets, like the
Macintosh computers offered by
Apple Inc. and used mainly for
desktop publishing at the time, the aging 8-bit
Commodore 64 which was selling for $150 by this time and became the world's bestselling computer, the 16-bit
Commodore Amiga line used for
television and
video production and the 16-bit
Atari ST used by the music industry. However, IBM itself lost the main role in the market for IBM PC compatibles by 1990. A few events are important in retrospect: • IBM designed the PC with an
open architecture which permitted clone makers to use freely available non-proprietary components. • Microsoft included a clause in its contract with IBM which permitted the sale of the finished PC operating system (
PC DOS) to other computer manufacturers. These IBM competitors licensed it, as
MS-DOS, in order to offer PC compatibility for less cost. • The 1982 introduction of the
Columbia Data Products MPC 1600, the first 100% IBM PC compatible computer. • The 1983 introduction of the
Compaq Portable, providing portability unavailable from IBM at the time. • An Independent Business Unit (IBU) within IBM developed the IBM PC and XT. IBUs did not share in corporate
R&D expense. After the IBU became the Entry Systems Division it lost this benefit, greatly decreasing margins. • The availability by 1986 of sub- "Turbo XT"
PC XT compatibles, including early offerings from
Dell Computer, reducing demand for IBM's models. It was possible to buy two of these "generic" systems for less than the cost of one IBM-branded
PC AT, and many companies did just that. • By integrating more peripherals into the computer itself, compatibles like the Model D have more free
ISA slots than the PC. • Compaq was the first to release an
Intel 80386-based computer, almost a year before IBM, with the
Compaq Deskpro 386.
Bill Gates later said that it was "the first time people started to get a sense that it wasn't just IBM setting the standards". • IBM's 1987 introduction of the incompatible and proprietary
MicroChannel Architecture (MCA)
computer bus, for its
Personal System/2 (PS/2) line. • The split of the IBM-Microsoft partnership in development of
OS/2. Tensions caused by the market success of
Windows 3.0 ruptured the joint effort because IBM was committed to the 286's protected mode, which stunted OS/2's technical potential. Windows could take full advantage of the modern and increasingly affordable 386 / 386SX architecture. As well, there were cultural differences between the partners, and Windows was often bundled with new computers while OS/2 was only available for extra cost. The split left IBM the sole steward of OS/2 and it failed to keep pace with Windows. • The 1988 introduction by the
Gang of Nine companies of a rival bus,
Extended Industry Standard Architecture, intended to compete with, rather than copy, MCA. • The duelling expanded memory (EMS) and
extended memory (XMS) standards of the late 1980s, both developed without input from IBM. Despite popularity of its
ThinkPad set of laptop PC's, IBM finally relinquished its role as a consumer PC manufacturer during April 2005, when it
sold its laptop and desktop PC divisions (
ThinkPad/
ThinkCentre) to
Lenovo for . As of October 2007,
Hewlett-Packard and
Dell had the largest shares of the PC market in North America. They were also successful overseas, with
Acer,
Lenovo, and
Toshiba also notable. Worldwide, a huge number of PCs are "
white box" systems assembled by myriad local systems builders. Despite advances of computer technology, the IBM PC compatibles remained very much compatible with the original IBM PC computers, although most of the components implement the compatibility in special
backward compatibility modes used only during a
system boot. It was often more practical to run old software on a modern system using an
emulator rather than relying on these features. In 2014 Lenovo acquired IBM's x86-based server (
System x) business for . ==Expandability==