In Short
In 1951, Chinese-born physicist An Wang stood at a crossroads. After immigrating to the United States following World War II, he earned a doctorate in applied physics at Harvard University in 1948 and began working at its Computational Laboratory. There, he invented the magnetic pulse memory core, a breakthrough that powered computer development for the next two decades.
When Harvard closed the lab in 1951, Wang had just $600 in savings. He used it to pursue his vision of building specialized electronic and digital equipment around his invention. From this modest beginning, Wang Laboratories grew into a $2-billion global technology leader that helped shape the information age. Yet by 1992, financial troubles forced the company into Chapter 11 bankruptcy protection, where it remained for years.
The Early Years
Wang’s first milestone came in 1952 with a contract to design a counting device for a small electronics company. By 1955, Wang Laboratories was officially incorporated.
A year later, after four years of tense negotiations, Wang sold the magnetic pulse memory core design to IBM for use in its calculators. Ironically, the sale occurred just weeks before he was awarded the patent. Later, Wang suggested that IBM had pressured him into the sale by challenging his patent rights—an episode that left him with a lasting distrust of IBM.
By the late 1950s, Wang was fulfilling government contracts, including a U.S. Air Force project that led to the creation of a transistor-based angular encoder to measure cloud cover. This innovation was adapted into automated control systems for machine tools, becoming Wang’s first major commercial product, the Weditrol. With sales of $50,000 and just 20 employees, the company showed clear promise.
Around the same time, Wang patented a semi-automated hyphenating phototypesetting machine that boosted newspaper productivity. However, poor licensing negotiations stripped him of exclusive rights. By 1959, in need of capital, Wang sold 25% of his company to Warner & Swasey for $150,000—a decision he later regretted, feeling he had given up too much control for too little.
These early wins and missteps foreshadowed the challenges that lay ahead.
Wang Rises to Prominence
“It was very upbeat, very exciting…There were lots of new, bright, young people. We were in the eye of the storm. Just to be there, to walk around, was a very heady feeling.” — Karen Smith Palmer, former Wang Laboratories employee
The 1960s brought rapid expansion. With a growing sales force and new headquarters, Wang broke the $1 million sales mark in 1964. The following year, the company introduced the LOCI, an electronic scientific calculator that launched the desktop calculator market—one Wang dominated for the next five years.
By 1967, Wang was preparing to pivot from calculators to minicomputers. That same year, the company went public, though An Wang retained majority control. International offices soon followed, and by 1970 Wang employed more than 1,000 people with annual revenues exceeding $25 million, largely from calculator sales.
The 1970s saw both expansion and turbulence. The Wang 2200 minicomputer and the 1200 BASIC word processor debuted in 1973, just as the energy crisis hit the company’s core market of automobile dealers. This downturn led to Wang’s first losses and layoffs.
Yet in 1976, Wang rebounded by entering the office automation market with a CRT-based word processing system. Over the next four years, it launched the VS computer line, Office Information systems, and Integrated Systems products, positioning itself as a serious challenger to IBM. Aggressive television campaigns openly targeted IBM, and acquisitions bolstered Wang’s capabilities. Fueled by resentment over IBM’s earlier treatment, An Wang proclaimed that by the mid-1990s he would surpass IBM as the world’s leading computer company.
Growth and Decline
Between 1979 and 1984, Wang grew tenfold, with revenues climbing 61% annually. Its word processors offered lower-cost alternatives to IBM’s. Yet a critical decision in 1980 shaped its future: when his son Fred suggested developing a personal computer, An Wang dismissed the idea as “the stupidest thing he had ever heard.”
By 1981, IBM had seized the personal computer market. Wang scrambled to respond, introducing its own PC in 1982. Technically superior and faster than IBM’s, it nevertheless ran on proprietary software, which limited adoption. Even as sales surpassed $2 billion, structural weaknesses surfaced.
An Wang continued to serve simultaneously as President, CEO, and head of research—a “benevolent dictatorship.” In 1983, John Cunningham was appointed president, but resigned in 1986 when it became clear Wang intended to hand leadership to his son Fred. By then, cracks in service quality and customer support were also damaging the brand.
The late 1980s were disastrous. Losses mounted—$70 million in 1987, $92 million in 1988, and $424 million in 1989. Heavy reliance on debt financing compounded the crisis, with liabilities exceeding $1 billion. Analysts had warned years earlier that such leverage would prove fatal if growth faltered.
In 1989, creditors forced leadership changes, replacing Fred Wang with Richard Miller, a former GE executive.
The Turnaround That Almost Was
Miller imposed strict financial discipline, cutting bureaucracy and steering products toward industry-standard systems. When An Wang died in 1990, Miller also assumed the CEO role. His efforts paid off briefly: bank debt was eliminated and the company posted its first profit in nearly two years.
But momentum faded. By 1991, Wang recorded a $385 million loss, its third in a row. New ventures in voicemail and office networking failed to restore profitability. In August 1992, Wang Laboratories filed for Chapter 11 bankruptcy protection, ending its run as one of the most ambitious challengers in the computer industry.
