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Although some of you might be a little young to remember this,

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it wasn't that long ago when IBM was a player in the consumer PC space.

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It's for everybody, but it lives in your room. Successors to the original IBM PC were common sites in both homes and offices,

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and their ThinkPad line of laptops were positively iconic,

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and maintain a cult following to this day. But in 2005, IBM sold off their entire PC division to Lenovo,

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and these days Big Blue no longer makes personal computers, instead focusing on analytics, cloud computing, and selling mainframes to larger organizations.

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So what happened that led them to this? I mean, just imagine if Apple stopped making iPhones,

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McDonald's stopped serving up Big Macs, or Taylor Swift stopped dating people to provide fuel for her pop hits.

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Oh! That was rude.

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So it turns out the seeds of IBM's downfall in the personal computer space

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were sown well before the early to mid-2000s.

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Although the original IBM PC, released in 1980,

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was very successful due to its relative affordability and consumer's familiarity with the IBM name,

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it wouldn't take long for its own world-changing invention to start slipping from its grasp.

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You see, IBM originally developed just about all of the components in its PCs themselves.

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This allowed IBM to initially keep a stranglehold on the PC market,

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a far cry from what we're used to today, where you might find parts from dozens of manufacturers

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inside both home-built and store-bought computers.

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But as it became resource and time-consuming for IBM to do everything themselves,

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they started to include components from other companies,

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notably operating systems such as Microsoft's MS-DOS and CPUs from Intel.

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Now, IBM opening up their platform in this manner made it easier for other companies to start building systems they labeled IBM PC-compatible,

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often at a lower cost than Big Blue could do it.

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I like how we're calling IBM Big Blue. Big Blue!

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Soon enough, both PCs and their components were seen as commodity goods,

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instead of something special that consumers felt compelled to buy specifically from IBM.

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Once this happened, IBM's dominance began to evaporate.

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IBM's original business model, which relied on vertical integration,

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i.e., doing it all themselves, helped them become a dominant force,

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but was now actively working against them, especially in the PC space,

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as more successful companies were focusing on keeping their operations narrower.

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For example, specializing in only hard drives or processors

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instead of manufacturing complete systems. Of course, other companies such as Compact were also selling complete systems,

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but they enjoyed more success than IBM, as they didn't have to deal with the amount of sheer bloat

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that IBM took on from being such a vertically integrated business.

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And by 1990, many of IBM's divisions were operating on razor-thin margins,

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not just its PC operation. Making matters worse was that IBM wasn't exactly raking in the dough

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from other manufacturers licensing their technology for PC-compatible systems.

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Instead, competitors just ended up developing or adopting open standards that cut out IBM completely.

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As the 1990s dragged on, IBM felt even more pressure from companies like Dell,

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who marketed and sold directly to consumers cutting out the middleman.

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IBM PCs, on the other hand, were more commonly found in retail stores like Radio Shack.

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And like IBM's PC division, they also went the way of the dodo.

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By the time the mid-2000s arrived, it was even harder to make money selling pre-built PCs.

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As falling component costs and the perception that the PC was no longer an unattainable luxury,

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meant margins were slim for many manufacturers, but especially for IBM.

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Although Big Blue's CEO cited his opinion that they couldn't do much innovating in the PC space,

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they were also losing money hand over foot, leading them to sell off their PC operation to Lenovo after 25 years in the industry.

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But there's some good news for old IBM fans. Lenovo still sells the ThinkPad,

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complete with that little red mouse knob that'll take you on a nostalgia trip back to 1992.

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And confuse you a little along the way.