Today in 1971, the RCA Board of Directors announced its decision to close its computer systems division writing it off as a $490 million company loss.
Founded in 1919, RCA was the dominant electronics and communications firm in the United States for over five decades. It entered the computer market in the 1960s. David Sarnoff, RCA president and chairman, said in a 1964 speech to the Joint Computer Conference:
Eventually, a global communications network handling voice, data and facsimile will instantly link man to machine—or machine to machine—by land, air, underwater, and space circuits. [The computer] will affect man's ways of thinking, his means of education, his relationship to his physical and social environment, and it will alter his ways of living. ... [Before the end of this century, these forces] will coalesce into what unquestionably will become the greatest adventure of the human mind.
RCA joined six other companies in challenging IBM in the mainframe computer market—Honeywell, Control Data Corporation, Univac, Burroughs, NCR, and General Electric. Having failed to alter IBM’s market dominance, they became known as the “Seven Dwarfs.”
RCA had only a 4% market share in 1971. IBM probably had at the time between 60% and 70% of the market for computers.
The word on the street was that RCA wasn’t really interested in computing. This wasn’t helped by cost overruns… RCA was simply not up to the chore of making computers efficiently. While it had a lot of licensing deals with the likes of Bull, Siemens, Hitachi, Philips and Telefunken, it didn’t seem to have what it took to be a player and it abandoned the business completely in 1971. It’s hard to say that its poor showing in the computer industry was a turning point down for the company. But it was never again a player like it was in the 1930’s.