12 August 1981: IBM launches the personal computer
IBM introduced the IBM Personal Computer, model 5150, with a starting price of about $1,565. It legitimized personal computers for business overnight. But to move quickly, IBM used an Intel processor and an operating system licensed from a small company called Microsoft, which kept the right to sell it to others. Clone makers followed, and the profits of the PC era flowed mainly to Microsoft and Intel rather than IBM.
The lesson: Inventing the product is not enough; capture the part of the value chain that others cannot copy.
What it meant for investors
$1,000 in IBM at the start of 1990 → $12,083 today, vs $19,429 in the S&P 500.
We start the clock at the start of 1990, the first year in our price data after the event. That is 12.1 times the money, but $7,345 less than a plain index fund made over the same years.
What IBM teaches: Buybacks cannot substitute for growth; IBM spent tens of billions shrinking its share count while revenue declined, and the stock went nowhere for years.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 1990 | $24.00 | $12,083 | $19,429 |
| 1995 | $18.00 | $16,111 | $14,783 |
| 2000 | $110 | $2,636 | $4,626 |
green = beat the S&P 500 · red = lost money
What if you bought IBM? Every starting year and the full story →
More IBM history
- 7 April 1964: IBM bets the company on System/360
- 11 May 1997: Deep Blue beats Kasparov
- 28 October 2018: IBM bets $34 billion on Red Hat
- 7 December 2004: IBM sells its PC business to Lenovo
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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