Released on August 12, 1981, it was created by a team of engineers and designers at International Business Machines (IBM), directed by William C. Lowe and Philip Don Estridge in Boca Raton, Florida.

The market for personal computers was dominated at the time by Tandy, Commodore, and Apple, whose machines sold for several hundred dollars each and had become very popular.

The microcomputer market was large enough for IBM's attention, with $15 billion in sales by 1979 and projected annual growth of more than 40% during the early 1980s.

Mion felt that, if IBM wanted to compete in the microcomputer market, it would need to: That plan made its way up the chain of command but was ultimately rejected in the fall.

In January of 1980, Tandy released their Annual Report and, as was predicted in Mion's plan, it confirmed that their 1979 shipments had exceeded 100,000 TRS-80s (about $50 million worth).

In 1980, IBM president John Opel, recognizing the value of entering this growing market, assigned William C. Lowe and Philip Don Estridge as heads of the new Entry Level Systems unit in Boca Raton, Florida.

The idea of acquiring Atari was considered but rejected in favor of a proposal by Lowe that by forming an independent internal working group and abandoning all traditional IBM methods, a design could be delivered within a year and a prototype within 30 days.

The prototype worked poorly but was presented with a detailed business plan which proposed that the new computer have an open architecture, use non-proprietary components and software, and be sold through retail stores, all contrary to IBM practice.

[16][17] This swayed the Corporate Management Committee, which converted the group into a business unit named "Project Chess", and provided the necessary funding and authority to do whatever was needed to develop the computer in the given timeframe.

The team received permission to expand to 150 people by the end of 1980, and in one day more than 500 IBM employees called in asking to join.

[20] The IBM 801 RISC processor was also considered, since it was considerably more powerful than the other options, but rejected due to the design constraint to use off-the-shelf parts[dubious – discuss].

[21] IBM chose the 8088 over the similar but superior 8086 because Intel offered a better price for the former and could provide more units,[22] and the 8088's 8-bit bus reduced the cost of the rest of the computer.

[27][failed verification] Because none of the functional components were designed by IBM, they obtained only a handful of patents on the PC, covering such features as the bytecoding for color monitors, DMA access operation, and the keyboard interface.

Pricing started at $1,565 for a configuration with 16 KB RAM, Color Graphics Adapter, keyboard, and no disk drives.

More than 190 ComputerLand stores already existed, while Sears was in the process of creating a handful of in-store computer centers for sale of the new product.

The IBM PC was highly expandable and upgradeable, but the base factory configuration included: The PC is built around a single large circuit board called a motherboard which carries the processor, built-in RAM, expansion slots, keyboard and cassette ports, and the various peripheral integrated circuits that connected and controlled the components of the machine.

[57] PC mainboards were manufactured with the first memory bank of initially Mostek 4116-compatible,[58] or later 4164-compatible[59] DIP DRAMs soldered to the board,[60] for a minimum configuration of first just 16 KB, or later 64 KB of RAM.Memory upgrades were provided by IBM and third parties both for socketed installation in three further onboard banks, and as ISA expansion cards.

While most home computers had built-in video output hardware, IBM took the unusual approach of offering two different graphics options, the MDA and CGA cards.

The software and hardware of the PC, at release, was designed around a single 8-bit adaptation of the ASCII character set, now known as code page 437.

[64] The floppy drives require a controller card inserted in an expansion slot, and connect with a single ribbon cable with two edge connectors.

As was common for home computers of the era, the IBM PC offered a port for connecting a cassette data recorder.

Unlike the typical home computer however, this was never a major avenue for software distribution,[66] probably because very few PCs were sold without floppy drives.

[68] Although official hard drive support did not exist, the third party market did provide early hard drives that connected to the floppy disk controller[citation needed], but required a patched version of PC DOS to support the larger disk sizes.

The Model F was initially developed for the IBM Datamaster, and was substantially better than the keyboards provided with virtually all home computers on the market at that time in many regards - number of keys, reliability and ergonomics.

"[64] At release, IBM provided a Game Control Adapter which offered a 15-pin port intended for the connection of up to two joysticks, each having two analog axes and two buttons.

Some publications highlighted IBM's uncharacteristic decision to publish complete, thorough specifications of the system bus and memory map immediately on release, with the intention of fostering a market of compatible third-party hardware and software.

Third-party software support grew extremely quickly, and within a year the PC platform was supplied with a vast array of titles for any conceivable purpose.

[62] Two years after its release, Byte magazine retrospectively concluded that the PC had succeeded both because of its features – an 80-column screen, open architecture, and high-quality keyboard – and the failure of other computer manufacturers to achieve these features first: In retrospect, it seems IBM stepped into a void that remained, paradoxically, at the center of a crowded market.

Shortly thereafter, clone manufacturers began to make improvements and extensions to the hardware, such as by using faster processors like the NEC V20, which executed the same software as the 8088 at a higher speed up to 10 MHz.

The clone market eventually became so large that it lost its associations with the original PC and became a set of de facto standards established by various hardware manufacturers.