IBM, the seventh largest corporation in the country and the largest manufacturer of information processing equipment in the world, is currently prototyping a low-cost personal computer suitable for the consumer market, say informed industry sources and observers.
While IBM has make no definite plants to market a personal computer, industry analysts see such a move as inevitable.
"By Christmas of 1979, Americans will probably start to see facilities testing the IBM personal computer for home use," said Charles P. Lecht, president of Advanced Computer Techniques in New York. ACT is known for its intensive monitoring of developments in the computer field.
Ted Withington, a senior staff member of Arthur D. Little, a Cambridge, Mass.-based think tank, said, "IBM missed the minicomputer market and has come back with only moderate sucess. I think IBM is not going to miss this personal computer market - if anything they may be willing to move in early."
There is a consensus that if IBM will introduce a personal computer it will do so within the next 24 to 36 months.
Social observes ranging from philosphers to engineers have commented that a well-designed, highly-interactive personal computer could have the same societal impact on this country as the automobile and television have had.
Moreover, the market is potentially limitless and lucrative.
Gideon Gartner, an analyst at Oppenheimer & Co. who has been tracing the evolution of the IBM personal computer prototype over the past year, asserts in his client newsletter, "The potential market is so vast that it might represent as much as a point of annual growth rate to IBM spanning perhaps the 1982 to 1987 time period. Considering IBM's size and thirst for above-average growth, that ain't hay. We think home computation will mark IBM's long-delyed entery into the "consumer market."
Gartner and other analysts siad they feel that IBM has intensified market research in the personal computer area over the past six months.
IBM faces potentially stiff opposition in the personal computer market - Texas Instruments, the burgeoning giant of the calculator industry, plans to introduce a personal computer with color graphics capabilities in the $350-$450 price range early next year.
Tandy's Radio Shack division and its TRS-80 personal computer already has been selling successfully to both home and small business.
However, IBM's major concern is with AT&T and many industry people feel that the home computer will turn into yet another battleground for the two corporate behemoths.
"Data processing and communications technology, which people have talked of merging for the past 15 years, are right at the verge right now," said Robert Lablanc, an analyst for Salomon Bros.
By virtue of the phone network, Lablac said, AT&T has an inherent logistical advantage over IBM in establishing a personal computer market. Technology available to the company would allow it to modify phone terminals into microprocessor-based personal computers with both data manipulation and data transmission capabilities, and thus allow such options as electronic mail and electronic funds transfer.BM has consistently and vehemently opposed any laws or regulatory measures that would enable AT&T to exploit this natural advantage and has testified before various congressional committees stating their opposition, thus giving rise to speculation about IBM's own plans.
For at least the past 14 months, the special products department at IBM, a semi-secret development arm of the general business group, has been prototyping a personal computer and inviting well-known figures in the personal computer field to informal seminars.
The bulk of the department's work is being done in Boca Raton, Fla. and in White Plains, N.Y. Heavy emphasis is being placed on the development of high-density video discs - which are a form of data recording that can be used to put motion picturs on a screen. IBM is reportedly pursuing technology that would permit an interactive video disc eanabling the user to manipulate and alter the picture.
While the final configuration of the product is undetermined at this time. IBM is thought to be building a key-board with a microprocessor - a waterthin electronic chip imprinted with thousand of logic circuits - that can be hooked up to a television set. Thus the keyboard would serve as the input, the microprocessor would be the information processing unit, and the television set would serve as an output/display. The videodiscs would offer a memory-storage facility for this persoanl computer configuration that would allow for filing, updating, and erasing.
Theodor Nelson, author Computer Lib and a one-time consultant for Bell Telephone Labs and the Central Intelligence Agency, has consulted at least twice for IBM on the subject of personal computers in the past year. Once was for the general systsms division, which oversees the operations of the special product department, and for the SPD itself.
"IBM is definitely seriously interested in personal computers," said Nelson, "although I was given no idea as to the status of any project."
IBM has also held seminars on personal computing topics.Last year, the Rede Corp. of Rhode Island organised such a seminar for IBM and invited speakers, including people such as Nelson and educational reformer O.K. Moore, to participate. However, the speakers were not to know of Rede's affiliation with IBM and the speakers had to agree not to divulge the substance of the conference. This pattern exists for other seminars IBM has held on the subject.