The IBM PC will celebrate its 25th birthday this Saturday.

Over 1.6bn units have been sold since IBM launched its first PC on 12 August 1981. It has spawned an IT industry that today tops annual revenues of $200bn, according to data from Gartner.

The analyst firm attributed the PC's success to its open and extensible platform, allowing it to quickly adapt to new trends. Initially it harnessed software and later became the premier device for accessing the internet.

The term 'personal computer' indicates that the device is suitable for personal use, differentiating it from the mainframe systems that dominated the IT industry prior to its launch. A mainframe's processing units were shared by many users through so-called minicomputers.

Xerox PARC is credited for developing the first PC with the Alto in 1972. The system never made it to a commercial product, but it is said to have inspired early systems for Apple and Sun Microsystems.

The first IBM PC model 5150 sold for $1,565. It used off-the-shelf components such as a 4.77Mhz Intel 8088 processor, up to 640Kb of memory and ran Microsoft's MS-DOS 1.0 operating system.

Its open nature allowed competing manufacturers to copy IBM's design. This allowed for a volume market to evolve that has been successful at fending off competitors like the thin client. However, several of today's IT trends could erode the PC's market domination.

Smartphones are often viewed as a potential PC replacement, but they are generally more limited in their functionalities.

System management costs for enterprises, however, have been rising as users are demanding additional functionalities and online security has been deteriorating.

PC boot times are also considered too slow for the consumer market, and as competition between manufacturers is increasing, profit margins have reached record lows.

Meanwhile hosted applications are gaining popularity, increasingly challenging the PC's domination. But the computers could once again put their flexibility to their advantage to address new markets by embracing up and coming technologies such as virtualization, Gartner predicted.