When IBM decided to take over the personal computer market, they didn't do 
their homework very well.
Intel convinced them to use the 8088, to have a gateway into 16 bit, instead of 
building a true 8 bit machine.
One of the IBM people had seen a "Microsoft Softcard" (a Z80 co-processor plus 
CP/M for Apple][).

On Thu, 14 Jul 2016, Guy Sotomayor Jr wrote:
IBM chose the 8088 because the bus was close enough to the 8085 that the peripherals from the S/23 could be re-used with minor tweaks (in many cases just a re-layout). They wanted something that would allow > 64KB of RAM without having to go through the pains of what was done on S/23 (it was an 8085 system that has 192KB of ROM and upto 128KB of RAM) and none of the 8-bit micros could do that.

It makes sense to me. Hardware would be same as for an ordinary 8 bit machine, but lots more (1MB!!) memory map. Since nobody could possibly need more than 10 times the current RAM, big chunks of space could be used for memory mapped I/O, such as both a text display AND an amazing 640x200 graphics display.

IBM had looked at the PC market for a while. It was actually TJ Watson Jr that instructed that a “skunk” team be formed to see how quickly a PC with an IBM logo could be produced. He was afraid of Apple making inroads into IBM’s traditional markets and wanted to prevent that. It was never envisioned to be a huge market for these things…it was viewed only as a hobbyist thing that had the potential to take away business from IBM’s traditional machines.

They assumed [correctly] that they could, with trivial ease, simply step in and dominate that "home computer" market. Particularly useful if anybody was crazy enough to take in a home computer to work and use it for some minor office tasks.

I'm glad that Apple survived IBM's entry and presence in that market.

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