Computer of the Year, or Machine of the Century?

On this day in economic and financial history...

The importance of Time's Person of the Year award may have been diminished in recent years, but the magazine's annual selection was still prestigious enough to cause a stir in the 1980s. On Dec. 26, 1982, Time's editors selected the first non-human recipient since the award's inception when it named the personal computer "Machine of the Year" for 1982.

An estimated 2.8 million personal computers, worth $4.9 billion, were sold in 1982, and people were already predicting the dramatic gains in computing power and efficiency that are now expected as a matter of course. "One computer expert," writes the Time feature piece, "illustrates the trend by estimating that if the automobile business had developed like the computer business, a Rolls-Royce would now cost $2.75 and run 3 million miles on a gallon of gas."

There were also incredible productivity gains to be had through early networks:

The 1,450 data bases that now exist in the U.S. range from general information services like the Source, a Reader's Digest subsidiary in McLean, Va., which can provide stock prices, airline schedules or movie reviews, to more specialized services like the American Medical Association's AMA/NET, to real esoterica like the Hughes Rotary Rig Report. Fees vary from $300 an hour to less than $10.

Telecommuting, painted in pastoral colors with the phrase "electronic cottage" coined by futurist Alvin Toffler, also featured as one of the computer's exciting opportunities. Time's phone poll, conducted to support its selection, found that 73% of the respondents thought computers would allow more people to work at home -- but only 31% said they'd rather do so.

No single manufacturer dominated the market at the end of 1982. The Commodore 64 topped out around a 40% share the following year, but was quickly surpassed by easily cloned IBM (NYSE: IBM  ) PCs by 1984. IBM, a Dow Jones Industrial Average (DJINDICES: ^DJI  ) component then and now, beat the famed index in 1984 by nearly 5 percentage points. The release of Microsoft's (NASDAQ: MSFT  ) Windows 1.0 in 1985 began the process that firmly established the basic IBM PC design as the world's overwhelming choice for its computing needs, and although IBM abandoned its PC efforts in later years, the Microsoft-Intel (NASDAQ: INTC  ) standard controlled over 90% of the computing market for more than two decades after.

In 2002, two decades after Time's selection, 132 million personal computers were sold around the world. Computer sales nearly tripled by 2011 -- sextupled, if you count all smartphones sold that year as well. Although much of Time's writing is quaint and quite dated, its big-picture analysis was surprisingly spot-on. You can read the entire feature story here if you have a subscription to the magazine.

Land of the rising automobile manufacturer
On Dec. 26, 1933, the Jidosha-Seizo Kabushiki-Kaisha automobile company was formed in Japan, combining DAT Motors with Tobata Casting, a Nippon Sangyo subsidiary. If these names seem unfamiliar, you might be more acquainted with the name this company adopted the following year: Nissan Motor Company (NASDAQOTH: NSANY  ) . For many years, Nissan was best-known for its Datsun line of small cars until a hugely expensive name change converted its badges and advertising to the Nissan name that the world is now familiar with.

Nissan has taken a more prominent role in the global auto industry in recent years. Its sales nearly doubled from 1998 to 2011, and as of 2011, Nissan was the sixth-largest automaker in the world, ranking ahead of Honda (NYSE: HMC  ) , which had been Japan's second-largest automaker for many years.

Perk me up
It can take many people time to get back up to speed after the holidays. For many, a good strong pot of coffee is essential, and for nearly 100 years, the predominant brewing method was the percolator, a device that James Mason of Massachusetts first patented on Dec. 26, 1865. It was crude by modern standards, as it lacked the upflow system that later became standard. That upflow method relied on water heated to steam in a lower chamber and condensing at the top of the pot, recirculating through the coffee grounds multiple times before the resulting brew was ready. Mason's pot, by comparison, was more like a simplified drip coffeemaker of modern times, relying on water poured through an upper chamber filled with grounds.

Within a couple of decades, Mason's percolator was replaced by these upflow percolators. General Electric (NYSE: GE  ) got on board the coffee-brewing movement after the turn of the century with electric versions, and you might still be able to find GE percolators for sale online if you look hard enough. Percolators dominated the American morning until the 1970s, when electric drip coffeemakers took over kitchen counters everywhere.

Patents have again become an important consideration in the coffee industry, thanks in large part to a movement away from standard electric drip devices and toward more complex machines built by Green Mountain Coffee Roasters (NASDAQ: GMCR  ) and others. Today, two-thirds of all American adults have had a cup of coffee within the past 24 hours, which is higher than soft drink and water consumption rates. Coffee is a $100 billion global industry today, and 500 billion cups are served each year. With so many options to choose from, Green Mountain's K-Cup sales, worth nearly $3 billion this year, can hardly be credited to patent protection alone.

Foolish final thoughts
Microsoft rode the PC to massive success, but its future has never been as uncertain as it is today. The smartphone and tablet revolution has many investors worried that Windows is a thing of the past. Don't give up on Microsoft before you dig deeper, because there are a lot of moving parts to this global powerhouse. The Motley Fool's premium research reports have the information you need to make the right decision on Microsoft's stock -- whether you want to buy, to continue holding, or possibly even short a company without a future. You'll find plenty of unbiased research, and will gain access to regular updates for a full year, when you subscribe. Click here to subscribe today.


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