THE CURVE OF GROWTH
The eruption of new industries is the prime mode of economic revival in all capitalist countries. In this historic process of industrial creation and transformation can be found the secret dynamics of pricing strategy, tax policy, and competitive struggle among nations and entrepreneurs.
In the late 1970s in the United States, the industry that erupted, as decisively as automobiles in the 1920s, radios in the 1930s, and housing and television after World War II, was computers, in all their forms and applications. The spearhead of this new growth-- the product that changed the industry from a provider of esoteric capital goods into a driving force in the consumer economy--was personal computers.
In 1982, Steven Jobs of Apple made the cover of Time, and in 1983, the personal computer usurped the entire human race and became Time's "Machine of the Year." Within sixteen months during 1981 and 1982, the number of computer retail outlets rose from several hundred to more than 35,000 and continued rising at an annual rate of about 30 percent. Radio Shack, Tandy's sometimes seedy vendor of consumer electronics, began opening more than 500 stores a year and took the lead among all mass retailers in gross margin on sales (59 percent). Commodore sold 1.2 million units of its Model 64 in 1983; in 1984 IBM began producing its various personal computers (PCs) at an annual rate of more than 5 million.
Creative destruction, however, plays no favorites. No sooner were computers anointed by Time and swamped with demand than a shakeout began. In the midst of the record year of 1983, computer companies and divisions began crashing on all sides