The 650 Magnetic Drum Data Processing Machine
While IBM's more direct response to the UNIVAC was the 701 (and later the 702), it also was working on a lower-end machine known as the 650 Magnetic Drum Data Processing Machine (so named because it employed a rotating drum that spun at 12,500 revolutions per minute and could store 2,500 10-digit numbers). It was positioned somewhere between the big mainframes like the 701 and UNIVAC and the punched-card machines used at the time, the latter of which were still dominating the market.
While the 701 generated most of the excitement, the 650 earned most of the money and did much more to establish IBM as a player in the electronic computer industry. Costing $3,250 per month (IBM didn't sell computers at that time, but only leased them), it was much less expensive than the 701 and UNIVAC, but was still considerably more expensive than the punched-card machines so prevalent at that time. In total, over 2,000 of these machines were built and leased. While this greatly exceeded the 701's and UNIVAC's deployment, it was paltry compared to the number of punched-card accounting machines that IBM sold during the same period. Although very reliable by computer standards, it still used vacuum tubes and thus was inherently less reliable than IBM's electromechanical accounting machines. On top of this, it was considerably more expensive. Finally, the peripherals for the machine were mediocre at best. So, right up to the end of the 1950s, IBM's dominant machine was the punched-card Accounting Machine 407.
To be able to usurp the IBM Accounting Machine 407, a whirlwind of changes were needed. The computer would need better peripherals and had to become more reliable and faster, while costing less. Our next machine is not the computer that finally banished the 407 into obsolescence--at least not directly--but many of the technologies that were developed for it did.