It retained the IBM PC's 8088 CPU and BIOS interface, but provided enhanced graphics and sound, ROM cartridge slots, built-in joystick ports, and an infrared wireless keyboard.

The internal floppy drive was a half-height Qume 5.25" unit; IBM also used these drives in the PC Portable, but the PCjr units were specially equipped with a small fan to prevent overheating since the computer did not have a case fan.The front of the PCjr exposes a pair of cartridge slots in which the user can insert software on ROM cartridges, as was common with other home computers.

[3] A number of patches from various vendors are included on a single "combo-cartridge", licensed and sold by PC Enterprises, to support add-on hardware, bypass certain limitations of design, and keep up with changing OS requirements.

Unlike the IBM PC, which required a separate video card, the PCjr display hardware was built in to the system board.

Additional external DRAM (in sidecar expansion modules) is refreshed independently and never affected by a video mode switch.

The PCjr's sound is provided by a Texas Instruments SN76496 which can produce three square waves of varying amplitude and frequency along with a noise channel powered by a shift register.

The original keyboard included with the PCjr was a wireless design using infrared line-of-sight communication, which IBM initially marketed as the "Freeboard.

Instead, several permanently mounted, proprietary connectors provide attachment to many built-in hardware capabilities, which replaced many of the features that PC expansion cards provided, including: Internally the PCjr did have expansion slots to support specific upgrades: a RAM upgrade, a modem, and a floppy drive.

Software that tried to perform direct, low-level disk access (mainly utilities, but also the occasional game such as Dunzhin: Warrior of Ras) would not work unless it was rewritten for the PCjr.

Within two years the PC had created a large new ecosystem of hardware and software, nearly leading the home computer market[19][20][21][22] with 26% of all microcomputers sold in 1983, second only to the much less expensive Commodore 64.

[23] 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.

IBM repeatedly denied these rumors,[24][22][25][26] but customers visited stores attempting to buy the product and rivals' revenue, product plans, and share prices reacted to the officially nonexistent computer in what the press called "Peanut Panic" or "The Great Peanut Roast".

[19][27][28] 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 $75 million 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 $600 plus $400 for a disk drive, use a color TV as a display, and have a standard typewriter keyboard.

[29] 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.

[33][21][31] Texas Instruments left the market four days before IBM's announcement, after losing US$223 million in nine months against Commodore[20][22][34] by selling its 99/4A for as low as $99.

[42] Dealers reported that consumers disliked the price, keyboard, and limited memory,[48] and retailers that sold primarily to business customers did not know how to market it.

[53] In response to the surprising lack of interest, IBM began early discounts of up to US$370[54] in June, lowering the two models' prices to $599 and $999,[55] but many of its dealers could not sell their initial shipments of 25 computers each.

[52] 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.

[77] While many PC applications would run, specific compatibility issues existed with software that used more than 128K of RAM or required more than one floppy disk drive.

[59] These compatibility limitations made the computer unsuitable for taking work home,[17] although a PCjr variant of 1-2-3 was eventually released.

[32] 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.

[15][17] 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".

The surprise decision[92][26] by IBM's CEO John Akers[74] astounded software developers, some of which only made PCjr products.

[90] Rumored to have 100,000 to 400,000 unsold PCjrs[90][94][95] despite not having ordered new microprocessors from Intel since summer 1984,[96] the company offered large discounts to its employees[97] and consumers.

[61] The failure was so great that it was compared to the Edsel and New Coke,[98] and IBM reportedly created a Chiclet rule, requiring human factors testing for future products.

[103] As PC clones became widely available at prices as low as $600, less than the price of the Apple IIc, consumers began purchasing DOS computers for the home in large numbers, and these inexpensive clones succeeded with consumers where the PCjr had failed, by being as fast as, or faster than the IBM PC while still being highly compatible.

[105] Other manufacturers provided support items for PCjr fans, such as hard drive attachments and specialized sidecars that the user could use to enhance the system.