The Computer Hardware industry is a growth industry that includes companies that design and manufacture personal and large-scale computers, as well as other information technology devices. The increased use of the Internet has led to increased growth and spending in this industry, and the computer hardware industry is projected to grow 8.4% between 2009 and 2014 (“Computer hardware industry,” 2010). With a promising future and strong supplier bargaining power, it is an intelligent strategic move for companies to enter the computer hardware industry.
Structure of the Industry
The Computer Hardware industry is defined as an industry that includes companies that design and manufacture personal and large-scale computers, peripheral devices, data storage systems and networking equipment (“Computer hardware industry,” 2010). This U.S industry accounts for 32.8% of the global computer hardware market value. Widespread use of the Internet has stimulated demand for information technology (IT) products and services, resulting in increased spending. Currently, total spending on computer hardware represents one-fifth of the worldwide spending on information technology (“Industry profile,” 2010). The industry is broken down into three main segments: computers, peripherals and devices, and storage devices. The computers segment consists of desktops and laptops, while the peripherals and devices segment includes computer peripherals, PDAs, organizers, calculators and satellite navigation systems. The storage devices segment includes memory sticks, CD packs, hard disks and other data storage devices (“Computer hardware in the united states,” 2010). Key Categories
The United States Computer Hardware industry had total revenue of $63.3 billion in 2009, and computer sales proved to be the most profitable, with revenues of $27.4 billion. Peripherals and devices generated revenues of $24.8 billion, while storage devices had revenues of $11.1 billion. As shown in the chart above, computers accounted for 43.3% of the market share, peripherals and devices accounted for 39.2% of the market, while storage devices accounted for 17.6% of the market. Key Companies
The key companies that contribute to most of this industry’s revenue in the United States include Acer Inc., Apple Inc., Dell, Inc. and Hewlett-Packard Company (“Computer hardware industry in the united states,” 2010). Acer, Inc. recorded revenue of $17,347 million in 2009, which was an increase of 5.1% from 2008. Its net income was $343 million for the same year, displaying a 2% profit margin. Acer’s major brands include Acer, Gateway, Packard Bell, eMachines, Aspire, Veriton, Altos and TravelMate (“Acer, inc. company profile,” 2010). Apple, Inc. recorded revenues of $42,905 million in 2009, which was a 14.4% increase from the previous fiscal year. Its net income was $8,235 million in 2009; a 19.2% profit margin for the company. Apple’s major brands include Apple, Macintosh, Mac, iPhone, iPad, iPod, iTunes, iTunes Store, QuickTime, Apple TV and MobileMe (“Apple, inc. company profile,” 2010). Dell, Inc. had revenues of $52, 902 in 2010, which was a decrease of 13.4% when compared to the $61,101 million of revenue in 2009. Dell, Inc. had a profit margin of 2.7% in 2010, and 4.1% in 2009. Dell’s major brands include Alienware, Dimension, Inspiron, Latitude, Optiplex, Precision, Vostro, XPS, PowerEdge and PowerConnect (“Dell, inc. company profile,” 2010). Hewlett-Packard Company (HP) recorded revenues of $114,552 million in 2009, which was a decrease of 3.2% compared to 2008. The company’s net income was $7,660 million in 2009 and their profit margin was 6.7% for...