Inventing the Electronic Century: The Epic Story of the Consumer Electronics and Computer Industries, with a new preface (Harvard Studies in Business History)

342 Pages·2005·0.95 MB·English

by  Alfred D. Chandler Jr.

harvard studies in business history, 47
PublishedwiththesupportoftheHarvardBusinessSchool
EditedbyThomasK.McCraw
IsidorStrausProfessorofBusinessHistory
GraduateSchoolofBusinessAdministration
GeorgeF.BakerFoundation
HarvardUniversity

Inventing the
Electronic Century
t h e e p i c s t o r y o f t h e
c o n s u m e r e l e c t r o n i c s a n d
c o m p u t e r i n du s t r i e s
With a New Preface
Alfred D. Chandler Jr.
withtheassistanceof
TakashiHikinoandAndrewvonNordenflycht
HarvardUniversityPress
Cambridge,Massachusetts
London,England
2005
Copyright©2001byAlfredD.Chandler,Jr.
Prefacecopyright©2005byAlfredD.Chandler,Jr.
Allrightsreserved.
PrintedintheUnitedStatesofAmerica
LibraryofCongressCataloging-in-PublicationData
Chandler,AlfredDupont.
Inventingtheelectroniccentury:theepicstoryoftheconsumerelectronicsand
computerindustries:withanewpreface/AlfredD.ChandlerJr.,withtheassistanceof
TakashiHikinoandAndrewvonNordenflycht.
p.cm.—(Harvardstudiesinbusinesshistory;47)
Includesbibliographicalreferencesandindex.
ISBN0-674-01805-2(pbk.:alk.paper)
1.Electronicindustries. 2.Computerindustry. 3.Competition,International.
I.Hikino,Takashi. II.VonNordenflycht,Andrew. III.Title. IV.Series.
HD9696.A2C43 2005
338.4′7621381—dc22 2004060901
To Anne and Fay

Acknowledgments
Oftheseveralpersonswhomadepossiblethewritingofthisbook,themost
importantwerethetwotowhomIhavededicatedit—AnneO’Connelland
mywife,FayChandler.Anne,forthepastdecade,hasbeentranscribingmy
garbled, dictated, handwritten copy into smooth readable typescript, at the
sametimekeepingthenumerousvariationsofthetextandtheendnotesin
their proper place and order. As critical was Fay’s constant encouragement
and support, which becomes increasingly valuable as I begin life’s ninth
decade.
Nor would the book have been written without the assistance of Takashi
Hikino and Andrew von Nordenflycht. Before Takashi had to return to his
homeland, Japan, his assistance was essential in getting what has become
twobooksunderwayaswellasinthewritingoftheinitialdraftsofthechap-
ters. Andrew played as critical a role in the completion of the book, for his
computerskillsandhisknowledgeofthecomputerindustryhelpedtomake
up for my limited technical knowledge. His committed work on the final
draftmadepossiblethecompletionofBookOneonschedule.
NorcouldthebookhavebeenwrittenwithoutthesupportoftheHarvard
Business School. I am grateful to both Dean John H. McArthur and Dean
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viii | Acknowledgments
KimB.Clarkforthecontinuingsupportofmywork.Iamparticularlygrate-
ful to John McArthur for his establishment of the Senior Faculty Center,
which provides facilities and personnel essential for emeritus professors to
continue to write and publish. At the Center, Jan Simmons, Paula Alexan-
der, and, most of all, Eileen Hankins provided essential secretarial and li-
braryservices.AttheSchool’sWordProcessingCenter,AimeeHamel,inas-
sisting Anne O’Connell, became an expert in developing and updating the
book’stablesandappendices.Atthefrontdeskinmyapartmentbuildingat
1010 Memorial Drive, Teresa Hardy faxed messages and correspondence
andassistedinotherways.
I’mindebtedtoAliceAmsden,JamesCortada,MichaelCusumano,Mar-
garet Graham, Thomas McCraw, and Pasquale Scopelliti for reading and
making essential comments on original drafts of chapters. Nathaniel Mar-
shall,aformerRCAmanager,providedaninsidepictureofthatenterprise.
John Akers, of IBM, pointed me in the right direction as I started on the
project. As in my earlier studies, I benefited greatly from Max Hall’s essen-
tial copyediting, which he did for all but the last chapter, when the dead-
lines prevented rereading. I’m grateful, too, to Alexander Gourevitch, who
helpedmemakeafinalreadingofthecompletedtextagainunderthepres-
sure of the final deadline. Finally, I am grateful to Robert Wallace of the
Free Press for his constant enthusiasm and support of the work and his ar-
rangements that made it possible for the final completed typescript to be
publishedonschedule.
Finally, I want to express my gratitude to the editors of Datamation for
providing an unsurpassed source of information on the evolution of the
computer industry in its annual review of the activities of the top 100 reve-
nue producers in computers and then in the broader information technol-
ogy industry. Particularly valuable were the reviews of the 1980s and early
1990s.
Manyhavecontributedtothisbookbutthefinaltextismine,andforitI
takefullresponsibility.
—AlfredD.ChandlerJr.
Cambridge,Massachusetts
May2001
Contents
PrefacetothePaperbackEdition xi
1 Introduction:ConceptsandApproach 1
2 ConsumerElectronics:TheUnitedStates—
TheCreationandDestructionofaNationalIndustry 13
3 ConsumerElectronics:Japan’sPathstoGlobalConquest 50
4 MainframesandMinicomputers:TheComputerIndustry
CreatedintheUnitedStates 82
5 TheMicroprocessorRevolution:TheComputerIndustryRecastinthe
UnitedStates 132
6 TheNationalCompetitors:Europe’sComputerIndustriesDie,Japan’s
IndustryChallenges 177
7 TheConsumerElectronicsandComputerIndustriesastheElectronic
CenturyBegins 216
8 TheSignificanceoftheEpicStory 238
Appendices 259 Notes 275 Index 307
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