Computer Industry Analysis

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Definition of the Industry
The computers and peripherals industry is comprised of manufacturers of personal computers, servers, mainframes and workstations, electronic computer components, various types of peripheral equipment, and ATMs. While many of the major players in this business operate in various sectors of this industry, the primary computers and peripherals industry is defined under the SIC Code 35771. This industry is growing globally due to innovations in technology components and increased consumer spending in China, India, and Africa, and many of the major players in the industry are refocusing their marketing efforts to these places. While the U.S. market is fairly saturated and mature, new markets in developing countries provide the industry with renewed purpose; thus, the international value of this sector is expected to reach $620.4 billion in 2011, up from $492.4 billion in 2006. The most successful market for the computers and peripherals business is in Asia Pacific, which counts for 33.4% of the industry’s global revenues, and this area is expected to provide the most future growth because of its large untapped customer base. Following the largest segment is the United States market which is more mature and accounts for 31.8% of the total sales. The third largest revenue area for this industry is Europe which covers 27.9% of the industry, and the rest of the sales, 6.9%, come from smaller regions of the world. Major Companies in the Industry2:

Company Market ShareRevenues (2007)Details
Hewlett-Packard 16%$104,286 millionSpecializes in personal computers, imaging, printing, access devices, consulting, and IT infrastructure Dell Computer Corp9.7%$61,133 millionPersonal computers, computer systems International Business Machines (IBM)7.8%$98,786 millionLeader in innovation, development, and manufacture of information technologies Toshiba 5.2%$60346.6Personal and professional computers, telecommunications and medical equipment, industrial machinery, consumer appliances, electronic components, semiconductors

While the major players in this industry are large companies that are diversified in other industry segments, 61.4% of the computer and peripheral’s industry is made up of smaller ventures that reflect the industry’s fragmented construction. Companies like HP and Toshiba have managed to enter many of the different sectors within the computer technology industry, but others have specialized their efforts like Cisco Systems which focuses on IP networking systems2. The industry can be defined in two separate but interrelated components: the computer hardware sector which accounts for 75.2% of the industry and the computer storage & peripherals sector which represents the other 24.8%2. This report will focus on the computer hardware section of the industry which includes computers and the components that make up the technology. The progression of the computer hardware sector has been steady in recent years due to the continual increase in global home computer sales, along with other emerging trends that will be discussed later in this paper. Hewlett Packard and Dell Computer have been market leaders in this area by developing personalized home computers that appeal to consumer’s individual tastes and needs, but each firm differentiates itself based on unique marketing efforts. The following sections will discuss the Computer Hardware sector of the larger Computers and Peripherals Industry and will examine the trends that have shaped the industry and continue to direct the motives of its major players.

Review of Industry History- Computer Hardware Sector
Some strategically important trends that are currently shaping the computer hardware sector of the industry include: Broadband penetration: The increase in internet availability and access for consumers around the world has led to online shopping, bill pay, research, and hundreds of other functions that are enabled by faster...
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