Introduction of the Personal Computer (PC) - Struggle For Control In The Pc Industry

Compaq's sales exceeded $1 billion in 1987. That year, Packard Bell introduced its first PC. The following year, Apple filed suit against Microsoft, alleging that the firm had used the appearance of the Macintosh operating system as the basis for its Windows program. Apple's lawyers requested that Microsoft either pay royalties or simply stop selling Windows. By then, Microsoft had grown into the leading U.S. maker of PC software, and by the end of the decade more than 2 million copies of Windows 3.0 had been sold. In 1989, PC sales throughout the world exceeded 100 million, and the number of U.S. computer users reached 50 million. The increased speed offered by Intel's 386 and 486 microprocessors helped to fuel the PC's growth, as did the decision by firms like Packard Bell to market PCs via discount chains, electronics centers, and other mass retail outlets.

Revenues exceeded $1 billion at Microsoft for the first time in 1990. Tension between Microsoft and IBM worsened, resulting in a price war between Microsoft's DOS 5.0 and IBM's competitor to DOS, OS/2. In 1991, in what was viewed by many analysts as a plan to wrest market share back from Microsoft, IBM and Apple forged an alliance to develop a new operating system that would not only make computers easier to use, but also facilitate compatibility between IBM and Apple machines. By then, roughly 90 percent of worldwide PCs used the MS-DOS platform, and Apple had broadened its litigation against Microsoft. In 1992, Microsoft won the case against Apple after a judge decided that the appearance of the Macintosh operating system was not protected by Apple's copyrights. Therefore, Microsoft's Windows platform, though very similar to Macintosh in appearance, was not in violation of copyright law. Apple unsuccessfully appealed the decision. Meanwhile, another PC upstart, Dell Computer Corp., had made the Fortune 500 list, just eight years after its inception. By the end of 1993, Dell had become the world's fifth-largest PC maker with sales of more than $2 billion. The worldwide PC industry continued to grow at a rapid pace, and PCs themselves continued to increase in speed and capacity.