Pc Industry

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From the mid 1970’s the structure of the PC industry had experienced a huge growth and changed dramatically. In 2001, 40% of the PC shipments were accounted by the top four PC vendors namely: Dell, Compaq, Hewlett-Packard (HP) and IBM. Dell, a direct-sales pioneer, grew exponentially in the 1990s and emerged as the worldwide market leader in 2001. During 2001-2002 it was the most profitable among the market leaders. Compaq came up with a full range of PCs ranging between $1,000 and $10,000. Whereas, IBM, which at once had a market share of 30%, was at this time going through a dramatic restructuring to stop its market share and profits from deteriorating further. Whereas, HP maintained a comparatively smaller share in PC sales. Besides…show more content…
In 1998, Compaq moved into direct sales , a change from its dependence on a vast distribution network. Despite all these changes, Compaq continued to struggle financially, lost its shares to Dell and offered to sell the firm to HP. HEWLETT-PACKARD (HP): HP, a company which initially specialized in electronic instruments and medical instruments, added computers and related products to its portfolio. Around 43% of its sales were majorly generated from imaging and printing, and only 20% sales was generated from PCs. In the late 1990s, HP began to shift focus from its proprietary software towards open architecture and Wintel. They also moved into the highly fragmented IT services business which had a comparatively slower growth and lower margins. Later on, HP also considered acquiring Compaq in 2002. IBM: With sales of around $86 billion, in 2001 IBM was the world’s largest computer company. Major part of its revenue i.e., about 43% was generated from hardware sales, 38% from services, 14% from software sales and the rest was caught up by maintenance, financing etc. IBM’s trademark historically has been its horizontal and vertical integration, making them leaders in mainframe computers. However, IBM still faced failures in some areas- failed to secure the ownership of PC platform, losing its position of being number one in PC shipments and losing about 1 million in the PC business. IBM started streamlining its operations by assembling almost 30% of

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