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International Business Machines Corp. (IBM), The Future, The Past & More

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On this day in economic and business history…

International Business Machines Corp. (NYSE:IBM)On April 29, 1952, International Business Machines Corp. (NYSE:IBM) IBM president (and soon-to-be CEO) Thomas J. Watson, Jr. announced to the public that IBM would soon introduce “the most advanced, most flexible high-speed computer in the world.” It was called the Defense Calculator while in development, but International Business Machines Corp. (NYSE:IBM) later rechristened it the 701 Electronic Data Processing Machine — the company’s first commercially available scientific computer. It would be the symbolic bridge between two eras of IBM — from punched-card tabulators to digital computers and from the leadership of the first Thomas J. Watson to the second.

The 701 was one of the first, and also one of the last, vacuum-tube computers International Business Machines Corp. (NYSE:IBM)built, but it nevertheless represented a profound shift in the company’s strategy. Until that time, International Business Machines Corp. (NYSE:IBM) had been primarily known as a manufacturer of tabulating machines, but Watson, Jr. recognized the company’s need to push forward into the tumultuous new world of digital computing. It was a brutally primitive machine by modern standards, as it had a total memory of 2,048 words of 36 bits each, with a baseline memory access time of 12 microseconds. The 701’s calculation speed was actually competitive with the legendary ENIAC despite costing much less for an annual rental (about $144,000 per year, versus $400,000 for the ENIAC) and taking up far less space.

The 701 is also notable for its role in two other seminal events in computing history. It was the first computer to demonstrate the potential for artificial intelligence, a feat it displayed while running a self-learning checkers-playing program designed by Arthur Samuel. It was also the computer that spawned the legendary Watson misquote (attributed variously to both father and son), “There is a world market for maybe five computers.” Watson Jr. was speaking at a stockholder’s meeting when he said: “The machine rents for between $12,000 and $18,000 a month, so it was not the type of thing that could be sold from place to place. But, as a result of our trip, on which we expected to get orders for five machines, we came home with orders for 18.”

The market was never limited to just five computers. Five was simply a modest floor for International Business Machines Corp. (NYSE:IBM)’s expectations.

IBM’s transition from tabulation to computation also ensured its return to the Dow Jones Industrial Average (INDEXDJX:.DJI) in 1979 after its removal in 1939. It would have made more sense to leave International Business Machines Corp. (NYSE:IBM) in the Dow the entire time, as it returned a colossal 22,000% to shareholders in its four decades off the Dow. Much of that can be attributed to IBM’s dominance of the early computing era: Thomas Watson, Jr. doubled International Business Machines Corp. (NYSE:IBM)’s revenue in his first four years as CEO — an impressive feat for a company already pulling in nearly $1 billion in annual sales.

3-D for you and me, all the way from 1953
When was the first 3-D TV broadcast? You might be tempted to say it happened in the past few years, but the technology goes much further back — all the way back to April 29, 1953. That day, a half-hour episode of Space Patrol, broadcast exclusively in Los Angeles, offered viewers the opportunity to watch the world’s first experimental 3-D broadcast. To get the full experience, viewers had to pick up specially marked cereal boxes with 3-D glasses inside. It took many more years to push 3-D broadcasts to a larger audience, and even today the medium remains on the fringes of television popularity despite innovations that have promised to get rid of those goofy glasses once and for all.

The king of brewers
Despite coming in second in its own corporate name, the Busch family has historically been the driving force behind Anheuser-Busch InBev NV (NYSE:BUD). That central role became official on April 29, 1879, when Adolphus Busch and Eberhard Anheuser agreed to rename their thriving brewing company “Anheuser-Busch Brewing Association” from its earlier name of simply “E. Anheuser Company’s Brewing Association.”

The renaming was highly justified, as it was Busch who had built the regional brewer into one of the first companies to resemble a national enterprise. By the time the company was renamed, he had already established one of the earliest (and largest) refrigerated railroad car transport operations, with more than 40 railcars distributing pasteurized beer (also one of Busch’s successful early adoptions) to far-flung parts of the United States. The development of Budweiser, a refreshing pilsner-style lager, also helped the company overcome regional taste preferences. Busch was a prescient marketer as well, and he would help develop a number of popular advertisements and brand-awareness campaigns.

Despite the onset of Prohibition, Anheuser-Busch InBev NV (NYSE:BUD) survived by shifting to the production of goods using the basic elements of beer, such as yeast, malt extract, and even ice cream. Thanks to its superior national infrastructure, Anheuser-Busch InBev NV (NYSE:BUD) was well-positioned to bounce back once Prohibition ended, and the destruction of many small brewers enhanced the company’s market position. By the time Anheuser-Busch InBev NV (NYSE:BUD) became part of the InBev empire in 2009, it had become by far the largest brewing company in the U.S., with nearly half of the entire U.S. beer-drinking market consuming Anheuser-Busch InBev NV (NYSE:BUD) brands. This merger brought more than 100 years of Busch family control to an end.

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