High Sales with Low Margins: Notebook PC Makers' New Success Formula?



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Code :BSM0027

Year :
2005

Industry : Engineering, Electrical and Electronics

Region : Global

Teaching Note:Not Available

Structured Assignment :Not Available

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PC Industry Overview The first desktop size system designed specifically for personal use called 'Altair 8800' was made by Micro Instrumentation Telemetry Systems (a US based company that manufactured calculators), in 1974. However, the first company tomanufacture and sell PCs was Radio Shack Corporation, a Texas based company, that introduced its model 'TRS-80' in 1977. The demand for these computers being vast, new companies such as Apple computers started entering the market; Apple launched its PC called Apple II. The success of this model established Apple Computers as the main player PC industry...

Upgradations in Technology In addition, with the continuous in flow of new products like, HP's 'Omnibook 300' and Apple Computers' 'Newton Message Pad' in 1993 and Dell's 'Latitude XPi' in 1994, price reductions were offered by vendors to push the existing inventory of the oldmodels. Bruce Stephen, an analyst at IDC remarked, "This ismore of a product cycle transition, lowering prices to clear out inventory". With the introduction of Pentium II by Intel in 1997, major players like IBM, Compaq and Toshiba reduced prices of their older Pentium MMX35 models foreseeing more demand for the newer Pentium II models...

Taiwanese Manufacturers Another major reason for falling notebook prices was considered to be the Taiwanese manufacturers. Asian companies, specifically Taiwanese companies produced most of the components. In 1995 Taiwanese products constituted 64 to 72%of the computer components like motherboards, mouse, and keyboard produced worldwide.Analysts felt that as many of components are made in Taiwan, it enjoyed a competitive advantage manufacturing notebooks in Taiwan itself...

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