The earliest floppy disks, developed in the late 1960s, were 8 inches (200 mm) in diameter; they became commercially available in 1971. These disks and associated drives were produced and improved upon by IBM and other companies such as Memorex, Shugart Associates, and Burroughs Corporation. The term "floppy disk" appeared in print as early as 1970, and although in 1973 IBM announced its first media as "Type 1 Diskette" the industry continued to use the terms "floppy disk" or "floppy".
In 1976, Shugart Associates introduced the first 5 1⁄4-inch FDD. By 1978 there were more than 10 manufacturers producing such FDDs. There were competing floppy disk formats, with hard and soft sector versions and encoding schemes such as FM, MFM and GCR. The 5¼ inch format displaced the 8-inch one for most applications, and the hard sectored disk format disappeared. In 1984, IBM introduced the 1.2 MB dual sided floppy disk along with its AT model. IBM started using the 720 kB double density 3.5" microfloppy disk on its Convertible laptop computer and the 1.44 MB high density version with the PS/2 line in 1986. These disk drives could be added to older PC models. In 1988 IBM introduced a drive for 2.88 MB "DSED" diskettes in its top-of-the-line PS/2 models but this was a commercial failure.
Throughout the early 1980s, limitations of the 5 1⁄4-inch format became clear. Originally designed to be more practical than the 8-inch format, it was itself too large; as the quality of recording media grew, data could be stored in a smaller area. A number of solutions were developed, with drives at 2, 2 1⁄2, 3 and 3 1⁄2 inches (and Sony's 90.0 mm × 94.0 mm disk) offered by various companies. They all shared a number of advantages over the old format, including a rigid case with a sliding write protection tab, protecting them from damage; the large market share of the 5 1⁄4-inch format made it difficult for these new formats to gain significant market share. A variant on the Sony design, introduced in 1982 by a large number of manufacturers, was then rapidly adopted; by 1988 the 3 1⁄2-inch was outselling the 5 1⁄4-inch.
By the end of the 1980s, the 5 1⁄4-inch disks had been superseded by the 3 1⁄2-inch disks. By the mid-1990s, the 5 1⁄4-inch drives had virtually disappeared as the 3 1⁄2-inch disk became the predominant floppy disk. The advantages of the 3 1⁄2-inch disk were its smaller size and its plastic case which provided better protection from dirt and other environmental risks while the 5 1⁄4-inch disk was available cheaper per piece throughout its history, usually with a price in the range of one third to two thirds of a 3 1⁄2-inch disk.
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