Provenance the electronic Magazine ISSN 1203-8954 - Vol.1, No.2 - March 1996

Clock speed: A Provenance retrospective on two decades of personal computing

Part I: Revolution and maturation- From Altair to Apple


For most of us, the personal computer has become an indispensable aid to work and leisure. Many of us directly owe our jobs to personal computers and there are few occupations which have not been affected in some way. At home personal computers are a major educational and entertainment resource and where connected to networks, an important communications tool. In brief, there are few aspects of our lives which have not been touched in some way by the personal computing revolution.

In 1995, the personal computer industry celebrated its twentieth anniversary. It has come along way since the release of the Altair 8800 which began the revolution and this journey is one of the great technological odysseys of the twentieth century. In this two part article, Provenance contributor Mark Brogan of Edith Cowan University's Department of Library and Information Science, describes and analyses two decades of innovation in personal computing. Mark's investigative method employs concepts derived from the theory of innovation and microeconomics which can be used to explain the success or failure of firms working in this dynamic and competitive industry.


Most people think of the programmable computer as a modern innovation. But the computer had its genesis in the concept of a programmable general purpose calculator first developed by Charles Babbage and Ada Lovelace in the 1830s. This work was pioneering in a scientific sense, but did not result in innovation
[1] . For widespread application, computers required the development of modern solid state electronics. Inventions in the form of the transistor (1948) and the microprocessor (1971)[2] enabled the development of large digital computers, and more recently smaller personal computers.

Since their inception in the 1970s, personal computers have been defined by architecture and by the characteristics of size and affordability. Employing Freeman's economic definition of innovation cited by Clark (1985) and building on the idea of innovation as a destroyer of equilibrium, the history of the personal computer can be thought of as commencing in 1975, with the development of the Altair 8800 kit computer based on the Intel 8080 8 bit microprocessor. The history of personal computers that began with the Altair has been conceptualized by Microsoft Chairman Bill Gates[3] as consisting of pre and post (IBM) PC periods. On closer examination, it is possible to distinguish three periods characterised by similar, but different technological trajectories, products and markets:- Clock speed analyses history of the personal computer since 1975 with reference to the key innovations concepts of:- technological trajectories;
demand pull v. technology push; and
Schumpeter's idea of short term monopoly as a causal explanation of innovation.
This anniversary retrospective concludes in Part II with an analysis of the forces that have shaped the development of the industry during two turbulent decades of innovation and are likely to be important in its future.

I The Altair Revolution: The First Personal Computers 1975-1979

When the Altair 8800 shipped on 26 March 1975, a young Bill Gates persuaded its skeptical makers that he could produce an interpreter BASIC for the new machine. Gates was one of only handful of computer experts who recognized the Altair's real significance. Outwardly, with its Intel 8080 central processing unit (CPU), a 256 Byte RAM card and selling price of $400, the Altair seemed a toy. But Gates recognized that key technological innovations such as the Altair's revolutionary S100 bus, offered the potential for expandability [4]enabling increased power and the development of genuine functionality. With improvements in I/O technology, the future Chairman of Microsoft Corporation declared that the microcomputer would usher in a new and exciting era in computing.

Today it is plain that the Altair 8800[5]introduced a new technological trajectory into the computing industry. Before the Altair, the computing industry had been driven by the information technology paradigm of large, expensive mainframe machines. The Altair 8800 suggested a new technological trajectory (Nelson and Winter, 1977) and spawned a new kind of computer industry. The essential features of the new trajectory were:
  • smaller machines (large, mainframe machines incorporating networks of dumb terminals would cease to be the dominant paradigm);
  • increasing affordability; increasing intelligence and power (measured in RAM, CPU speed and word size, expandability etc);
  • more powerful user enabling software tools (beginning with applications development tools such as early fourth generation languages. For example, BASIC[6] became available for the Altair 8800 shortly after its release.)
  • Machines which conformed with the trajectory established by the Altair and enjoyed early market success were the 8 bit TRS-80, Apple II and Commodore PET. The trajectory for microcomputers changed with the arrival of 16 bit computing in the early 1980s.

    II 1981-1992 Maturation of the Technology

    Nelson and Winter's contention that trajectories function as a non-market selection method in innovation derives some credence from the shake out which followed the introduction of the PC in 1981. The technological trajectory established by the Altair 8800 changed with the advent of the IBM PC (1981) and Apple Macintosh (1983). The new trajectory added the components of :-
  • visual computing (added by the Macintosh in 1983); and
  • inter-operability (added by the IBM after 1981)
  • Whereas the period 1975-1980 had been characterised by considerable product differentiation, the arrival of the IBM PC in 1981 heralded substantial movement in the opposite direction. The IBM PC introduced affordable 16 bit computing based on an Intel 8086 microprocessor developed in 1978. The arrival of IBM on the personal computer scene fundamentally changed the microcomputer industry. The principal reasons for this can be found in the market power exercised by IBM and its decision to make its operating system (OS) non-proprietary. This system (MS DOS) was to be sourced from a third party provider, Bill Gate's Microsoft.

    At the time IBM was a highly successful mainframe vendor which controlled a substantial part of the business computing market. It was, therefore, favourably positioned to deliver a machine to business, and applications development for business would henceforth be the primary focus of the software industry. The magnitude of market power exercised by IBM was such that its arrival in the personal computing market place would exert significant pressure on other firms to imitate its technology or disappear. By virtue of IBM's profile in business computing, and the likelihood of a substantial business software base, imitation also offered the possibility of expansion into new markets. Imitation was facilitated by the nature of IBM's OS agreement with Microsoft which did not restrict Microsoft's rights to sell MS DOS to other hardware manufacturers. Because of its inability to control chip and OS distribution, success with the PC became a hydra like monster for IBM.

    According to Polsson (1995) the first PC clone emerged in June, 1982. By the mid 1980s a vibrant 'clone industry', had grown up around the PC specification and by the end of the decade, imitation had dramatically eroded IBM's share of the market. The release of the PC also brought about a decline in product differentiation at hardware level in the desk top market. By the late 1980s, hardware offerings had shrunk to Intel 80x86 and Motorolla 680x0 architecture machines. Product differentiation focussed on bundled software applications and size. The pace of innovation also slowed. Innovation was stymied by :-
  • market acceptance of the PC which created a de-facto standard based on Intel type CPUs' and MS-DOS;
  • the requirement for backwards compatibility with earlier generations of software (with inter-operability, a requirement imposed by business).

  • In Great Microprocessors of the Past and Present, John Bayko (1992) refers to the relative technical inferiority of the 8086 chip, compared with its competitors -the Texas Instruments TMS 9900 and Motorolla 68000. So why did IBM choose the 8086 series when most of the alternatives were so much better? Bayko (1992) comments:

    "Apparently IBM's own engineers wanted to use the 68000, and it was used later in the forgotten IBM Instruments 9000 Laboratory Computer, but IBM already had rights to manufacture the 8086, in exchange for giving Intel the rights to it's bubble memory designs. Apparently IBM was using 8086s in the IBM Displaywriter word processor."

    An outcome from the arrival of the PC was the entrenching of a relatively inferior technical standard for PC's which lasted a decade. In terms of the industry, re-structuring proceeded rapidly with the disappearance of firms which had failed to anticipate or could not respond to the impact of the PC and the new technological trajectory. A notable survivor from this shake out was Apple Computer.

    In 1983, Apple changed the technological trajectory of microcomputing with the introduction of an object oriented operating system (OS), totally unlike its command line MS DOS IBM counterpart. Apple bundled its OS with Macintosh, a machine Apple hoped would set a rival/hardware software standard to the PC. However, in 1984-85 the machine struggled to establish market share and seemed destined to fail. In his account of the history of the Macintosh, Stephen Levy (1995) describes the decision making which enabled Apple to survive in the post PC era, where others failed -Atari, Commodore, Osborne, Wang, Apricot to name but a few. Significantly, the licensing of Apple's OS to third party hardware manufacturers was contemplated but rejected because (Levy, 1995, p.224)

    "The experience of IBM had shown that when competitors, especially the Japanese and Korean hardware companies, could produce clones of your computers, most of your customers would abandon you for the cheaper goods."

    Similarly, price cuts were rejected, a decision which Levy (1995, p.225) considered in hindsight to have cost Apple market leadership and relegated it to

    "be forever the other computer, with no more than a small but significant plurality of users."

    Apple survived, firstly, because of its strategic alliance with Aldus, a software house specialising in publishing software. From 1986, this alliance tied the fortunes of Macintosh with another major innovation- desktop publishing. Desktop publishing was a major innovation in printing with vertical market characteristics- it could be used in offices to create small circulation high quality printed copy in conjunction with a high quality printer called a LaserWriter, or in large printing houses to produce mass circulation copy using Linotronic type machines. Together with its object oriented interface, desktop publishing enabled Apple to differentiate its product from its competition and enjoy Schumpeterian type monopoly for its innovation. Secondly, Apple survived because its object oriented OS enjoyed a sustained period of monopoly (the technology was not successfully imitated until the release of Windows 3.0 by Microsoft in 1990). Key questions for Apple as the decade came to an end, were whether it could continue to change the technological trajectory through new innovation and how long the existing object oriented interface monopoly could be sustained.


    Acknowledgements: Thanks to Tom Carlson and Bob Bacus for permission to use pictures of the Apple 512K and PCXT. Thanks to Max Lockwood for permission to use Jim Lockwood's picture of the Altair. Thanks also to the Obsolete Computer Museum from which these images were sourced.


    [1] The first successful 'Analytical Engine' based on Babbage's original design was eventually constructed at the Science Museum, London in 1990.
    [2] An application in large scale integration of logic circuits based on the transistor.
    [3] vide Allison, David (1993). Bill Gates Interview. [Transcript of a Video History Interview with Mr. William "Bill" Gates for the National Museum of American History, Smithsonian Institution]. At WWW: http: //
    [4] Main memory could be exapanded to 16K.
    [5] Shipped on 3/26/75.
    [6] BASIC- acronym for Beginners All Purpose Symbolic Instruction Code.


    Allison, David (1993). Bill Gates Interview. [Transcript of a Video History Interview with Mr. William "Bill" Gates for the National Museum of American History, Smithsonian Institution]. At WWW: http: //

    Bayko, John (1992). Great Microprocessors of the Past and Present. Available at WWW:

    Howarth, C. (1994) The Role of Strategic Alliances in the Development of Technology. In Technovation vol. 14 no 4 pp. 243-257

    Kingston, W. (1984). The Political Economy of Innovation. Martinus Nijhoff. The Hague. pp. 37-76.

    Levy, Steven (1995) Insanely Great: The Life and Times of Macintosh, the Computer that Changed Everything. New York. Penguin Books. 312p.

    Lodewijks, J.K. (1990) Market Structure and Industrial Innovation. In Promotheus vol.8 no.1, June, pp.108-128

    Nelson, R and Winter, S (1974). Neoclassical vs Evolutionary Theories of Economic Growth: Critique and Prospectus. In Economic Journal, December 1974, pp.886-905

    Polsson, K. (1995) Chronology of Events in the History of Microcomputers. Available at WWW:

    Schumpeter, J. (1928). The Instability of Capitalism. In The Economics of Technical Change. N. Rosenberg (Ed.) Penguin Books, Harmondsworth, 1971. pp. 13-42

    Mark Brogan

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