IBM's first home computer was the PC, released in 1981. Within two years the PC had created a large new ecosystem of hardware and software, nearly leading the home computer market with 26% of all microcomputers sold in 1983, second only to the much less expensive
Commodore 64. For a year before the PCjr's announcement, the computer industry discussed rumors of a new IBM product, code named "Peanut", that would repeat the PC's success. The rumors described Peanut as a home computer with of memory that would be
IBM PC compatible, benefit from IBM's service network and, at to , be less expensive than the
Apple IIe. IBM repeatedly denied these rumors, By September 1983, books and magazine articles on Peanut were ready for publishing, with only a few changes needed once the still officially nonexistent computer appeared. Software companies prepared to market products as "Peanut compatible" with the computer of which, rumors said, IBM would produce 500,000 units in the first year.
Adweek estimated that IBM would spend on marketing, including an alleged license of
Charles Schulz's
Peanuts characters.
Smalltalk magazine in August published a detailed article on the computer, stating that it would cost plus for a disk drive, use a color TV as a display, and have a standard typewriter keyboard.
Announcement IBM announced the PCjr on November 1, 1983, at its
New York City headquarters with an enormous amount of advance publicity, including live news coverage of the event. Experts predicted, according to
The Washington Post, that the PCjr would "quickly become the standard by which all other home computers are measured" and estimated sales of one million or more in 1984, expecting the PCjr to change the home-computer market in a similar way to how the IBM PC had changed the business-microcomputer market. They predicted that the PCjr would extend IBM's dominance, with customers able to use the company's computers in the home and in the office.
Texas Instruments left the market four days before IBM's announcement, after losing in nine months against Commodore by selling its
99/4A for as low as . Developers began creating PCjr software in 1982.
Sierra On-Line,
SPC, and
The Learning Company were among those that produced games, productivity, and educational software as
launch titles, using detailed IBM production outlines under a policy of strictly enforced security. The PCjr's graphics and sound features were superior to the PC's, and
PC Magazine speculated that "the PCjr might be the best game machine ever designed". Prominent among launch titles was Sierra's
graphical adventure ''
King's Quest I'', much of whose budget was paid by IBM.
Release and reception The PCjr was released in March 1984, missing the 1983 Christmas sales season due to production delays. Even prior to release, anticipation of the machine was mixed.
Ziff Davis, publisher of the successful
PC Magazine, printed the first issue of
PCjr Magazine before the first units shipped, and competing
computer magazines included
Peanut,
PCjr World,
jr, and
Compute! for the PC and PCjr. However, as new information became available about the machine, retailers became deeply concerned about its marketability. When the PCjr became widely available in March 1984 sales were below expectations. Consumer interest was reportedly high until demonstration machines were available, at which point interest dropped steeply. Dealers reported that consumers disliked the price, keyboard, and limited memory, and retailers that sold primarily to business customers did not know how to market it. The press soon reported that the PCjr could embarrass IBM, with executives reportedly worrying about demand. Stores began discounts while vendors slowed plans to release products. IBM admitted that demand for the PCjr was not growing as rapidly as expected. By May 1984 it had only sold 10,000 units, while other companies were reported to be slow in developing software for the system. In response to the surprising lack of interest, IBM began early discounts of up to in June, lowering the two models' prices to and , but many of its dealers could not sell their initial shipments of 25 computers each. IBM allowed them to postpone paying for inventory for 180 days, but inventory continued to pile up. By August the PCjr was being described as a flop.
Issues One of the most significant complaints about the PCjr was its chiclet keyboard, which was described as unsuitable for serious typing and "nearly useless." The lack of direct function keys was a pain point for word processing.
Cost The PCjr's cost was its biggest disadvantage, even more so than the keyboard. and dealers to prepare for the product. The price was perceived as targeting a market that did not exist. IBM was surprised to learn that many of the initial customers for the PCjr were not home users as they assumed, but instead businesses who wanted a cheaper PC that took less space on a desk. IBM failed to recognize that many consumers wanted a computer more sophisticated than those that cost less than , but did not want to spend more than . The PCjr offered no compelling reason to spend that much. The PCjr cost more than twice as much as the C64 and the
Atari 8-bit computers, while inferior to both for videogames. Spinnaker, a game developer, stated that they discontinued development for the PCjr when they learned of the actual price. Consumers were reportedly much more excited about the also-new
Macintosh 128K, which was more sophisticated but only cost more, with accessories and software. The Macintosh reportedly outsold the IBM product during their first two months on the market. The PCjr's price was close to that of the Coleco Adam, but the Adam also included a
tape drive, a printer, and software. A realistic cost including peripherals was and other configurations cost $3,000 or more. Apple IIe was the PCjr's most direct competition. Although the PC outsold it Apple sold almost 110,000 units in December 1983, in part to customers who had waited until details of the PCjr became available. Apple estimated that 80% of its dealers sold IBM and Apple computers, and many visitors who were disappointed by the PCjr, or curious about the Macintosh, reportedly left with a IIe instead. The latter was so popular that a shortage occurred in early 1984. The PCjr model compared favorably to a IIe also with and no floppy drive, In April 1984 Apple introduced the
Apple IIc, a portable version with a more compact form factor, of RAM, and a floppy drive. Although the PCjr's CPU was superior, the IIc—which Apple did not describe as a home computer, to avoid the "game machine" connotation—had an excellent keyboard and was compatible with the Apple II's enormous software library.
Not completely PC compatible By early 1984, PC compatibility was vital for any new, non-Apple computer's success. IBM had expected that most customers in the market would be new to computers, but 75% of PCjr customers used an IBM PC at work. Three quarters of the market were familiar with computers and wanted to run business software on the PCjr. An important market was executives who took data home to work on applications such as
Lotus 1-2-3 and Peanut had been rumored to be fully PC compatible, so many customers visited stores believing that the PCjr could run most PC software. IBM's intent was for the PCjr to be perceived as a unique platform, like most other home computers, and their documentation stated it was "a different computer than the PC", but with "a high level of programming compatibility." Nonetheless, potential customers perceived it as a variant of the PC, not a unique platform. While many PC applications do run on PCjr, compatibility issues exist with software that use more than 128K of RAM or require more than one floppy disk drive. Thousands of PC applications do require more than 128K of memory and two disk drives, making the PCjr incompatible with about 60% of software by some measures, including the popular word-processing program
WordStar and Lotus 1-2-3, IBM's own DisplayWrite was released as a unique PCjr version. A four-line BASIC program that runs on the IBM PC can crash PCjr, mystifying even
Peter Norton. These compatibility limitations made the computer unsuitable for taking work home, although a PCjr variant of 1-2-3 was eventually released. Ultimately, the PCjr was perceived as not having a
killer app to make up for these limitations. Software incompatibility made it inadequate as a business machine, but poor performance with arcade-style games made it inadequate as a games machine.
Limited hardware expansion Computer dealers quickly identified the PCjr's limited hardware expansion capability as another major disadvantage. ROM cartridges have small storage capacity, requiring, for instance, two cartridges and a floppy disk for the PCjr version of Lotus 1-2-3, which also has difficulty fitting complex spreadsheets into 128K of RAM. IBM published technical details for the PCjr as it had done for the IBM PC to encourage third parties to develop accessories, but did not offer a second floppy drive, hard drive,
Response to poor sales By mid-1984, the PCjr had experienced months of bad publicity, and dealers were panicking. Sales were poor and falling each month before rising slightly with the June discounts, and each dealer sold an average of 15 units total in the first half of the year. Apple sold almost as many IIc computers on its first day as PCjr since introduction. IBM downplayed complaints about the keyboard, but in July announced that it would replace the chiclet keyboards, for free, with a new model with conventional typewriter-style keys. This was perceived as unusually generous even for IBM, especially within the computer industry. By spending $5 million to replace 60,000 keyboards IBM acknowledged that the original models were a mistake, and confirmed the computer's poor sales compared to original estimates. In August 1984, IBM began a massive advertising campaign which ran through the end of the year. They reduced the PCjr's list price, offering a US$999 package meant to be superior to the comparably priced Apple IIe and IIc, and they introduced new IBM-made memory expansion options to bring the machine to 512 KB. As part of $32.5 million in advertising for the computer during 1984, it began what the company described as the most extensive marketing campaign in IBM history, in which 98% of Americans would see at least 30 PCjr advertisements in the last four months of the year. Three simultaneous
bundled software promotions, a sweepstakes with
Procter & Gamble, and direct mail to more than 10 million people marketed the redesigned computer, while deemphasizing the PCjr's role as a home computer and emphasizing PC compatibility. Advertisements listed the new price, "new typewriter-style keyboard", standard 128 KB of memory and expansion options, the PCjr version of 1-2-3, and the ability to "run over a thousand of the most popular programs written for the IBM PC". A $500 rebate to dealers let them include a free color monitor with the discounted PCjr. Despite widespread skepticism, what became known as the "Save-the-Junior campaign" succeeded in the short term. Sales rose every month from June (1.9 units sold per store) to September (4.2) and many dealers reported selling more in the weeks following the changes than in the previous seven months. The more expensive model now cost the that had originally been expected prior to release. With the new hardware options and lower prices consumers could buy a PCjr for less than a comparable PC, and slightly less than an Apple IIe. The PCjr reportedly became the best-selling computer, outselling the Apple IIe and IIc by four to one in some stores and even the C64. As sales reached an estimated 50 per store in December dealers increased inventories, and Tecmar resumed production of PCjr peripherals after retailers suddenly began ordering its products again.
Discontinuation By January 1985, IBM had sold an estimated 240,000-275,000 PCjrs, 200,000 of which were sold in the fourth quarter of 1984. When the discounts ended, however, sales decreased abruptly and inventories began to stack up again. By this time, three PCjr-specific magazines had ended their publications with significant losses. IBM was unable to meet the demand for its new
PC AT business microcomputer, but the home-computer market was in decline and the company was likely unable to make a sufficient profit when selling the PCjr at a discount. IBM discontinued the PCjr on March 19, 1985, stating that "The home market didn't expand to the degree I.B.M. and many observers thought it would". The surprise decision by IBM's CEO
John Akers astounded software developers, some of which only made PCjr products. Rumored to have 100,000 to 400,000 unsold PCjrs despite not having ordered new microprocessors from Intel since summer 1984, the company offered large discounts to its employees, schools, and the public. Inventory remained through Christmas 1985, and IBM used discounts as well as radio and full-page print ads to try to sell off remaining stock. Dealers said that they would not accept IBM's unusually attractive
payment terms, because stores already had large inventory they were unable to sell. ==Legacy==