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Chapter 10 - Networking: Market Competition 1981-1983

10.21 AT&T Introduces CBXs and LANs

Even after the breakup, AT&T remained dominant in Customer Premises Equipment (CPE) - $4 billion of CPE assets were transferred to the new AT&T, hereafter AT&T, on January 1, 1984.16 Only CBXs had begun gobbling voracious bites out of AT&T’s market share beginning in the late-1970s. AT&T, free to begin competing after January 2, 1982, would take until 1983 before introducing their first CBX. The System 85 was designed for large applications: it could support up to 32,000 lines. A year later they introduced the smaller version System 75 that supported a maximum of 800 lines.17 They would continue to lose market share as shipping problems compounded already being late-to-market. Not until 1984 was AT&T nominally competitive.18

Equally, it took until June 1984 before AT&T introduced a customer-premises LAN.19 The Information Systems Network (ISN) did not provide for the sharing of cable as in Ethernet, for example, but was a star configuration with the wires running to terminals just like a PBX. Supporting speeds of up to only 19.2 kilobits/second, it would have no market impact.

This for all practical purposes ends the influence of AT&T on computer communications. The company that once controlled 100% of a market worth $10 million had fallen to declining importance in a $5 billion market.

  • [16]

    Intecom, Harvard Business School, 386-053, 1985, p. 9

  • [17]

    Bells Lab Technical Journal, January-March 2000, p. 6

  • [18]

    Smith Barney Research, AT&T, Oct. 10, 1985, p. 20

  • [19]

    “AT&T announces ISN local-area network scheme,” Computerworld, July 2, 1984, p. 5