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27 February 2004

The tumbling price of calculators

by Forrest M. Mims III

Thirty-five years ago, electronics magazines predicted the arrival of digital calculators so small they could be carried in a pocket. They would cost less than $400!

These predictions were of high interest to MITS, Inc., a small company in Albuquerque, NM, that was building and selling desktop calculators for only a few hundred dollars. I was a co-founder of MITS and wrote the manuals for those early calculators.

By the early 1970's, Sharp, Texas Instruments and Hewlett-Packard introduced electronic calculators small enough to hold in a hand. These amazing machines could add, subtract, multiply and divide. Even more amazing was they cost only several hundred dollars.

MITS tried to keep up by designing a line of handheld calculators. But the competition soon became vicious.

An electronics magazine ran a contest that offered a Sharp calculator as the prize. I entered and won a tiny calculator that was much fancier than the ones being sold by MITS.

I told my friends at MITS that the end was near. It didn’t look like MITS could survive.

Meanwhile, Hewlett-Packard introduced its famous HP-35, the first scientific calculator. Besides the four basic arithmetic tasks, the HP-35 featured keys for trigonometry, logarithms and other advanced features. The cost was $395.00.

Prior to the HP-35, scientists and engineers used slide rules to solve complicated equations. The slide rule resembled a white ruler packed with neat rows of tiny digits and index markers. The center section of the rule could slide back and forth along tracks in the main body of the rule. Problems were solved by carefully lining up numbers on the slide with those on the fixed part of the rule.

Slide rules required time to master and could provide only approximate answers. The HP-35 provided nearly perfect results, and it was very easy to use. The HP-35 put the slide rule companies out of business.

The HP-35 seems terribly primitive and overpriced by today’s standards. Last night I spotted a calculator with the same features as the HP-35 hanging on a rack in a local department store. The price was $3.76!

Nearby was a display of light-powered calculators selling for only $1 each! That’s less than the price of a soft drink at a gas station.

Back in the 1970s, everyone involved with the scientific calculator business knew calculators would revolutionize the way people and businesses do arithmetic and math. But no one predicted that calculators would someday sell for only a dollar.

Nor did anyone realize that the calculator disaster that almost forced little MITS into bankruptcy would lead to the development of something far more powerful than electronic number machines. Ed Robert’s, the company’s president, decided to transform lemon into lemonade by converting his calculator production line to make the Altair 8800, the first mass-produced personal computer.

The Altair 8800 attracted the interest of Paul Allen and Bill Gates, a pair of young computer geeks in Boston. They moved to Albuquerque and set up a tiny company at MITS to write software for the Altair. They named their company Microsoft.


Forrest M. Mims III and his science are featured online at http://www.forrestmims.org/.

This feature was originally published in Forrest Mims's weekly science column in the Seguin Gazette-Enterprise, Seguin, Texas. The column is written for a general audience.