Computer Makers
Other Companies
Competition Profile
(click on company logo for corporate website)
Founded: 1984
Headquarters: Round
Rock, Texas, USA
CEO: Michael S. Dell
1999 Revenue: $25.3 billion
Employees: 36,500
in 34 countries
Product Range: desktops,
laptops, and workstations
Business Model: "business
direct", computers are made to customer specifications primarily via the
internet(70%)
Popular Laptop Models:
Latitude (small to large business) , Inspiron (all levels)
Founded: 1982
Headquarters: Houston, Texas,
USA
CEO: Michael D. Capellas
1999 Revenue: $38.52
billion
Employees: 67,100
employees in over 53countries
Product Range: desktops,
laptops, workstations, servers, data storage, networking, internet servieces,
and other computer accessories
Business Model: products
are sold primary through authorized Compaq retailing partners such as Comp-USA
but also directly over the Internet to the customer
Popular Laptop Models:
Presario (home/home office), Armada (small business), ProSignia (small-large
business), Notebook 100 (family)
Founded: 1976
Headquarters: Taiwan
CEO: Stan Shih
1998 Revenue: $6.7
billion
Employees: 28,000
in 37 countries
Product Range: desktops,
laptops, servers, internet solutions, wireless devices, networking devices
Business Model:
Popular Laptop Models: TravelMate
Series
Founded: 1876
Headquarters: Tokyo,
Japan
CEO: Taizo Nishimuro
1998 Revenue: $48.3
billion
Employees: 198,000
in over 100 countries
Product Range: everything
having to do with electronics and technology from computers to televisions
to refrigerators
Business Model: its
large range of production is overlooked by headquarters in Tokyo, laptops
are designed by Toshiba but produced by Asian subcontracters and then sold
worldwide through retailers both in-store and on-line
Popular Laptop Models:
Satellite (home, small to large business), Portege (business), Tecra
(medium to large business)
Founded: 1911
Headquarters: Armonk,
New York, USA
CEO: Lou Gerstner
1998 Revenue: $81.7
billion
Employees: 291,067
in over 100 countries
Product Range: techology
oriented including computers, servers, worstations, networking, peripherals,
software, storage, and e-business solutions
Business Model: large
company, most of production done abroad with IBM doing the design, notebooks
sold to consumers and businesses by IBM over the Internet and in stores
by partnered retailers
Popular Laptop Models:
ThinkPad Series (all consumers and businesses)
Founded: 1985
Headquarters: San
Diego, California, USA
CEO: Jeffrey Weitzen
1999 Revenue: $8.6
billion
Employees: 20,000
in 23 countries
Product Range: desktops,
laptops, internet service, and computer accessories
Business Model: the
company sources most of its production and distributes computers via the
Internet and company-owned retail outlets, "Gateway Country Stores"
Popular Laptop Models:
Solo Series (all consumers and businesses)
Founded: 1975
Headquarters: Cupertino,
California, USA
CEO: Steve Jobs
1999 Revenue: $6.13
billion
Employees: 10,000
in 15 countries
Product Range: desktops,
laptops, Macintosh operating system, multimedia software, internet software
Business Model: sells
computers via the internet and retail distrutors
Popular Laptop Models: Powerbook
family (all consumers and businesses), iBook family (home and small business)
The Intel Corporation holds
a virtual monopoly on the microprocessor segment of the laptop supply chain.
With its family of Pentium chips, it has cornered the market and thus has
been able to charge computer manufacturers exorbitant prices for the chips.
With 64,500 employees around the world and 1999 revenues of $26.27 billion,
Intel has undoubtedly become a dictating force in this industry.
Started by Harvard drop-out
Bill Gates in 1975, the Microsoft Corporation has grown to become the #1
and perhaps the only viable provider of desktop operating systems for laptops
and PC's. With its Windows operating system and various other software
applications such as MS Office and MS Outlook, Microsoft, like Intel, is
a price-maker and can sell its system to laptop manufacturers at virtually
any price. With 1999 revenues of $21.85 billion and a huge profit
margin, Microsoft rakes in monopoly level profits that have brought it
under fire from Federal Anti-Trust investigators.
The notebook computer industry has basically developed from scratch over the course of the past fifteen years. In 1986, Toshiba, a competitor in the PC market, came out with what could be called the first mass-marketed "laptop" computer, the Dynabook. The popularity of this model and the intense competition in the PC marketplace caused Toshiba to focus a lot of its energy on development of the notebook model. As first mover in this area, it began the decade and the industry with a substantial lead in market share. By the late 80's, though, other PC makers, had followed suit and joined Toshiba in the large-scale production of laptops. In the early 90's, Compaq, IBM, and Apple joined Toshiba as the leading producers of laptops. Although no material data is available since the industry was just getting started, it is suffice to say that these four were the biggest PC makers at the time and according to their websites, they were all heavily involved in laptops. Throughout the 90's companies such as Acer and Hewlett Packard have entered the market. The two newer companies with the largest impact on the laptop market have been Dell and Gateway. Due largely in part to their unique marketing and distribution schemes. The following charts and statistics show changes in the industry.
Source:
Computerworld.com
Source: Dataquest
The drastic change in market share for Dell from '97 to '99 is due to primarily to overwhelming popular "business direct" distribution model. Dell has is now setting the precedent for its competitors as others such as Compaq, IBM, and Gateway are beginning to sell direct on-line to consumers so that they don't lose customers to Dell.
Source:
Dataquest
Source: Dataquest
Although no world laptop data was available, the following data from Europe show a similar trend in the market. As you can see, Compaq, Dell, IBM, and Toshiba and the laptop leaders in both the United States and Europe; the two of the world's largest markets. In Asia, although no hard data was available, Toshiba and Acer claim to hold stronger positions (this could be expected since they are both based there). The growth rates in Europe over the period 1997-1999 show that the firms with the most aggressive marketing strategies (Acer, Apple, and Dell) have made the largest strides in terms of garnering customers in Europe.
The level of the competition in the global laptop industry has intensified exponentially over the past decade. This has driven laptop prices down and caused intense battles for market share. With margins being so low, companies have done everything possible to gain an advantage. The best way to do this seems to be an aggressive marketing and innovative distribution strategy (a la Dell). As a result of the competition, though, Intel and Microsoft have overtaken the actual laptop producers as the heavy hitters on the value chain. These two companies produce the components (Intel Pentium chips and Microsoft Windows--a.k.a "WinTel") that consumers are most interested having as part of their notebook. Therefore, the laptop producers are virtually forced to pay Intel and Mircrosoft whatever they command. In the future, the laptop producers who can find a way to innovate and produce cutting edge designs along with forming strategic alliances with Intel and Microsoft will be the most successful.
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