A few years ago, some experts feared that IBM, one of the nation's most important companies, had slipped into a dangerous slump.

Its products were outdated and overpriced, and its payroll and cost structure too bloated to deal with a slowdown in computer industry sales, these critics said.Instead of its sales growing 15 percent or better a year as IBM predicted, annual growth averaged less than half that from 1984-89.

IBM's profit fell from $6.6 billion in 1985 to $3.8 billion in 1989, and its stock price slipped from as high as $173 a share in 1987 to a low of $93 a share in December 1989.

The downturn was troubling not just because International Business Machines Corp. is the nation's fourth-largest industrial company, but because IBM's health is a benchmark for the U.S. economy and its technical prowess.

Some said IBM - which employs more people than live in Minneapolis - was too big and bureaucratic to change.

But in the past year or so, the world's largest computer company appears to have executed a neat turnaround.

Its profit and stock price are on the rebound, its product lineup has been revitalized and thousands of unneeded employees are gone. IBM also has become more customer-oriented.

"In the mid-80s, other (computer) companies started to do well. IBM was marking time," said Barry Bosak, an analyst at Smith Barney, Harris Upham & Co. "Now, in 1990, IBM seems to be doing better in general than the computer industry.

"I'm impressed by the ability of IBM to make a good number of cutbacks and at the same time roll out what is a fairly extensive line of new computers," he added.

IBM had been losing ground in the product area to nimbler, younger competitors. Compaq Computer Corp. lured away corporate customers for personal computers, while Sun Microsystems Inc. outshined IBM in the fast-growing computer workstation market.