IBM, which up to this time had been producing mainframes and minicomputers for medium to large-sized businesses, decided that it had to get into the act and started working on the Acorn, which would later be called the IBM PC. The PC was the first computer designed for the home market which would feature modular design so that pieces could easily be added to the architecture. Most of the components, surprisingly, came from outside of IBM, since building it with IBM parts would have cost too much for the home computer market. When it was introduced, the PC came with a 16,000 character memory, keyboard from an IBM electric typewriter, and a connection for tape cassette player for $1265.
By 1984, Apple and IBM had come out with new models. Apple released the first generation Macintosh, which was the first computer to come with a graphical user interface(GUI) and a mouse. The GUI made the machine much more attractive to home computer users because it was easy to use. Sales of the Macintosh soared like nothing ever seen before. IBM was hot on Apple's tail and released the 286-AT, which with applications like Lotus 1-2-3, a spreadsheet, and Microsoft Word, quickly became the favourite of business concerns.