The divergence of Windows and OS/2 is reflected in the share prices of the two longtime collaborators. In the decade following OS/2’s first announcement, Microsoft Corporation (NASDAQ:MSFT) gained 3,400%, but IBM’s share price grew only 25% — a dire underperformance during a period in which the Dow Jones Industrial Average grew 180%. During this period, International Business Machines Corp. (NYSE:IBM) suffered one of the most dramatic declines in its century-plus history, losing more than $15 billion through 1992 and 1993 as Microsoft was really starting to catch fire. Microsoft Corporation (NASDAQ:MSFT)’s focus on Windows and abandonment of OS/2, is one of the biggest reasons for this divergence, which would bring Microsoft into the Dow in 1999.
IBM has long since ceased development of OS/2, but it hasn’t died. You may even use it every day without realizing it, particularly if you live in the Northeast. New York City’s subway card access system runs on OS/2, as do the checkout systems at Safeway Inc. (NYSE:SWY) supermarkets. Some other city subways and supermarket chains also use OS/2, as do certain bank ATMs. This is far from the success International Business Machines Corp. (NYSE:IBM) had originally hoped for in 1987, when Windows was still just a rough-hewn upstart and DOS was a highly flawed default choice.
An electric debut for a new industry
The first permanent motion-picture theater in the world opened its doors to the public on April 2, 1902. Tally’s Electric Theater of Los Angeles offered early moviegoers much the same establishment that modern moviegoers now enjoy as a matter of course: comfortable seats, quality sound, pleasing decor, and professional ushers. Its popularity was so overwhelming that the initial evening showings were quickly augmented with matinees. Soon, people across the country were enjoying movies at theaters like the Electric thanks to a vibrant film industry that was quickly expanding in the Los Angeles area.
There are more theaters operating in the U.S. today than the Electric Theater’s proprietors could have imagined more than 110 years ago. At last count, some 40,000 indoor theater screens entertained patrons throughout the U.S., resulting in nearly $11 billion in gross ticket revenue. The largest operator, Regal Entertainment Group (NYSE:RGC), maintained nearly 7,000 of those screens at last count. No other country has quite so many theaters, but China is fast catching up — at last count, the Middle Kingdom boasted more than 36,000 screens.
The article Remember When Even IBM Couldn’t Compete With Microsoft? originally appeared on Fool.com and is written by Alex Planes.
Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology.The Motley Fool owns shares of International Business Machines (NYSE:IBM). and Microsoft.
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