leading American computer manufacturer, with a major share of the market both in the United States and abroad. Its headquarters are in Armonk, N.Y.

In 1933 IBM purchased Electromatic Typewriters, Inc., and thereby entered the field of electric typewriters, in which it eventually became an industry leader. During World War II, IBM helped construct several high-speed electromechanical calculators that were the precursors of electronic computers (computer). But the firm refrained from producing these electronic data-processing systems until Watson's son, Thomas Watson, Jr., became president of the company in 1952 and sponsored an all-out push into that field. Having entered the computer field, IBM's size allowed it to invest heavily in development. This investment capability, added to its dominance in office-calculating machines, its marketing expertise, and its commitment to repair and service its own equipment, allowed IBM to quickly assume the predominant position in the American computer market. By the 1960s it was producing 70 percent of the world's computers and 80 percent of those used in the United States.

IBM's specialty was mainframe computers—i.e., expensive medium- to large-scale computers that could process numerical data at great speeds. The company did not enter the growing market for personal computers until 1981, when it introduced the IBM Personal Computer. This product achieved a major share of the market, but IBM was nevertheless unable to exercise its accustomed dominance as a maker of personal computers. New semiconductor-chip–based technologies were making computers smaller and easier to manufacture, allowing smaller companies to enter the field and exploit new developments such as workstations, computer networks, and computer graphics. IBM's enormous size hindered it from responding rapidly to these accelerating rates of technological change, and by the 1990s the company had downsized considerably. In 1995 IBM purchased Lotus Development Corporation, a major software manufacturer.