The 80186 was to be installed in the PC,Jr as part of Estridges big plan.  
Early on he planned the PC as the starter machine, then the PC,Jr as the home 
machine and the PC-AT as the workplace machine.  His gameplan also called for 
the IBM creation of an 80286 chip that included a correction of the Real to 
Protected / Protected back to Real mode problem.  Unfortunately MBA types 
heard about another method that did not cost money. So that part of Estridges 
plan was shelved - resulting in much unrealized IBM profits.
  One must remember the days on which the IBM PC, et al were built.  Back 
then you did not plan a computer and have the chips designed for it.  The 
8086 was designed in Isreal in 1976.  Computers were assembled by looking at 
what currently existed, then building them.  The 8088 was not 'designed' for 
the PC.  The 8088 existed, and therefore was selected for the PC.
  The 80186 had a software problem that made it slightly incompatible with 
the 8086 series.  The rule then was that DOS was created, therefore any new 
hardware item had to work with the current DOS.  Therefore the 80186 could 
not be used - it would have required minor software changes including changes 
to DOS.
  In those days, the 80x86 series was never considered part of any embedded 
computer.  the 804x and 805x series were the embedded processors of the Intel 
line.  The target market for those embedded computer chips was traffic 
lights. But the word embedded was not the jargon of the time.  Later, Intel 
separated the 8051 and 8096 series processors from the 80x86 line.  But the 
80186 was assigned to the embedded processor group.  By this time, Intel 
competitors were taking the 8085 and 8086, building full computers on a chip, 
and selling the embedded systems.  NEC V-20, V-40 etc should be familiar.
  Also at that time, some agressive competitors of Intel were just beginning 
to put the 80286 and other parts of a PC on a single chip.  Intel moved on.  
Their major task then was to make the 80386 faster and get chip sets built 
that would support the 80486.
--- Maximus 3.01
---------------