IBM PC compatible refers to a class of computers which make up the vast majority of smaller computers (microcomputers) on the market today. They are based (without IBM's participation) on the original IBM PC. They use the Intel x86 architecture and are capable of using interchangable commodity hardware.
The origins of this platform came with the decision by IBM in 1981 to market a personal computer as quickly as possible in response to Apple Computer's rapid success (50% marketshare) in the burgeoning PC market. In licensing an operating system from Microsoft, IBM's agreements allowed Microsoft to sell MSDOS for non-IBM platforms (the IBM version was called PC-DOS). Also, in creating the platform, IBM used only one proprietary component: the BIOS.
Columbia produced the first IBM PC compatible in 1982. Compaq Computer Corp produced an early IBM PC compatible a few months later in 1982. Compaq could not directly copy the BIOS as a result of the court decision in Apple v. Franklin, but it could reverse-engineer the IBM BIOS and then write its own BIOS using clean room design. Compaq became a very successful PC manufacturer, and was bought out by Hewlett-Packard in 2002.
Manufacturers such as Xerox, Digital and Wang have been widely criticized for introducing PCs that were not hardware-compatible with IBM. It is not always appreciated just how fast the rise of the IBM clone was, and the degree to which it took the industry by surprise.
Microsoft's intention, and the mindset of the industry circa 1980-1981, was that application writers would write to the API's in MS-DOS, and in some cases to the firmware BIOS, and that these components would form what would now be called a hardware abstraction layer. Each computer would have its own OEM version of MS-DOS, customized to its hardware. Any piece of software written for MS-DOS would run on any MS-DOS computer, regardless of variations in hardware design.
MS-DOS provided adequate support for character-oriented applications, such as those that could have been implemented on a minicomputer and a VT-100 terminal. Had the bulk of commercially important software fallen within these bounds, hardware compatibility might not have mattered. However, from the very beginning, many significant pieces of popular commercial software wrote directly to the hardware, for a variety of reasons:
At that time, MS-DOS was sold only as an OEM product. There was no Microsoft-branded MS-DOS, MS-DOS could not be purchased directly from Microsoft, and the manual's cover had the corporate color and logo of the PC vendor. Bugs were to be reported to the OEM, not to Microsoft. However, in the case of the clones, it soon became clear that the "OEM" versions of MS-DOS were virtually identical, except perhaps for the provision of a few utility programs.
By 1983, buyers began to regard PCs as commodity items, and became skeptical as to whether the security blanket of the IBM name warranted the price differential. Meanwhile, of course, the incompatible Xeroxes and Digitals and Wangs were left in the dust. Nobody cared that they ran MS-DOS; the issue was that they did not run off-the-shelf software written for IBM compatibles.
Since 1984, IBM PC compatibles have conquered both the home and business markets of commodity computers so that the only notable remaining competition comes from Apple Macintosh computers with a market share of only a few per cent. Meanwhile, IBM has lost ground in the market for IBM PC compatibles; currently (as of 2003) major market players besides IBM include Dell and Hewlett-Packard (market leader).
Despite advances in computer technology, all current IBM PC compatibles remain very much compatible with the original IBM PC computers, although most of the components implement the compatibility in special backward compatibility modes used only during a system boot.