Photoshop was developed in 1987 by the American brothers Thomas and John Knoll, who sold the distribution license to Adobe Systems Incorporated in 1988. Thomas Knoll, a PhD student at the University of Michigan, began writing a program on his Macintosh Plus to display grayscale images on a monochrome display. This program, called Display, caught the attention of his brother John Knoll, an Industrial Light & Magic employee, who recommended that Thomas turn it into a full-fledged image editing program. Thomas took a six-month break from his studies in 1988 to collaborate with his brother on the program. Thomas renamed the program ImagePro, but the name was already taken. Later that year, Thomas renamed his program Photoshop and worked out a short-term deal with scanner manufacturer Barneyscan to distribute copies of the program with aslide scanner; a "total of about 200 copies of Photoshop were shipped" this way. 

During this time, John traveled to Silicon Valley and gave a demonstration of the program to engineers at Apple and Russell Brown, art director at Adobe. Both showings were successful, and Adobe decided to purchase the license to distribute in September 1988. While John worked on plug-ins in California, Thomas remained in Ann Arbor writing code. Photoshop 1.0 was released on 19 February 1990 for Macintosh exclusively. The Barneyscan version included advanced color editing features that were stripped from the first Adobe shipped version. The handling of color slowly improved with each release from Adobe and Photoshop quickly became the industry standard in digital color editing. At the time Photoshop 1.0 was released, digital retouching on dedicated high end systems, such as the SciTex, cost around $300 an hour for basic photo retouching.

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