HP is the current global leader in the Personal computer space by market share with about 1 out of 5 PCs sold today. Dell follows but constantly slipping further behind feeling the heat of Acer. Lenovo and Toshiba fill the other top 5 spots. Going further down the list, once upon glorious names such as IBM (handed the business to Lenovo), Compaq (swalllowed by HP), Bull, Olivetti, NCR, Wang, Commodore, Amstrad, Apricot are nowhere. Apple on the other hand sells quite well but some claim MACs are not PCs - something we have to disagree but will skip for the moment while a quite large % of the market is shared among hundreds of small local producers …
What is driving this change? In every industry we see large players fading away and eventually disappearing but here things are quite bold. In our opinion the reason is the lack of innovation in what the PC makers are left with to make… Every PC shipped carries 2 or more stickers. One says Ïntel (or AMD) inside”, the other “Designed for Windows …” - a 3rd sticker could refer to to the graphics card and accelerator… So the heart and the brain of every PC is made by someone else. If we look at a PC from the inside we will face plenty of “3rfd party” components as well such us the hard drive, the LCD panel, the DVD drive, the memory chips, the ethernet circuit, or the battery for laptops and so on. So what is left for HP, Dell, Lenovo, Acer and their peers?
Well the box, the selection of the specs, the selection of the suppliers, the efficiency and performance of the assembly line, the distribution channel, the packaging etc… In other words, commodity things factors that are controllable by the customer! In practice, when an educated customer wants to buy, will configure the desired specs on the web, will look for an affordable price and a convenient delivery lead time and so on. A customer with little experience will buy what the salesman suggests OR based on price. Thus the success of the global leaders may not be in the product innovation but just in Marketing … Consequently margins are very low and the industry cannot afford many serious players. Only few big ones and many many small local ones…
Finally, we want to make a remark on something quite interesting: There is no longer any European corporation among the major players in the PC industry …Packard Bell now belongs to ACER, British glorious names such as Amstrad, BBC Micro, Sinclair, Apricot have all vanished, Italian ex global giant Olivetti is now a subsidiary of Telecom Italia making Printers and Lottery terminals for the local and regional market, Germany’s Siemens is now out of the joint venture with Japan’s Fujitsu, while French once IT powerhouse Bull is active in local and French speaking countries supplying servers and storage … European brands such as Nokia and Ericsson are still key players in the mobile handset industry, but will it remain important to be making handsets that run Microsoft or Google’s operating systems?