Since its introduction in August, 1981 the International

          Business Machines Corporation's Personal Computer, the IBM PC,

          has come to dominate the microcomputer market.  In less than

          three years the IBM PC has rocketed to the position of the

          industry leader, and now comprises over one quarter of the market

          and generates over one third of industry revenues.[1]  This

          spectacular rise to industry leadership has been the result of

          various market and marketing factors which have combined to make

          the PC the most prefered machine for both home and business.  The

          PC has become the industry standard thanks to IBM's clout, and

          many within the industry now wonder what effect Big Blue's power


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          1. "Computer Stocks: Life After the PCjr", The New York Times, 20
                                                     ___ ___ ____ _____
          Nov.  1983, sec.  3, p.  10, cols.  3-5.



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          will have as the market matures.


               Reaction to the introduction of the PC was varied throughout

          the computer industry.  While many expected IBM to do well, few

          could have predicted the speed or scope of the PC's success.

          Some in the industry conceded a certain amount of the market to

          the computer giant, but others were sceptical about IBM's ability

          to compete in an area so distant from its traditional base.  As

          one Apple executive commented "Trying to dominate an established

          market as a newcomer isn't the way IBM usually does business.

          IBM knows as well as anyone the power of an established base.

          Now the shoe's on the other foot."[2]  Unfortunately for Apple,

          IBM has proved to be quite adept at maneuvering in this new

          market.


               Certain varied factors have contributed to the success of

          the PC. Primary among them has been a considerable commitment to

          research and development at IBM.  Since the mid-1970s the company

          has plowed between 16 and 20 billion dollars into new plant and
                             16 and 20 billion dollars

          equiptment facilities.[3]  At a period when many observers felt

          that the company had become sluggish, it was in fact gearing up

          for a major push into new technologies and new markets to carry

          it into the next century.  Thanks to this new infusion of

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          2. "IBM's New Line Likely to Shake Up The Market for Personal
          Computers", The Wall Street Journal, 13 Aug.  1981, sec.  2, p.
                      ___ ____ ______ _______
          21, cols.  4-6.

          3. "IBM: The Giant Puts It All Together", Duns Business Month,
                                                    ____ ________ _____
          Dec.  1982, p.  56-57.



                                        - 2 -










          capital, production capabilities have increased tremendously.  At

          times of peak demand for the PC, the Florida plant can turn out

          one unit every seven seconds.


               IBM's unaggressive behavior during the late seventies, due

          in part to the Justice Department's antitrust suit, fueled

          speculation about the ability of