Emergic: Rajesh Jain's Blog

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The State of the PC Industry

October 18th, 2002 · No Comments

Writes Fortune: “Their industry–one of the largest in the world, with annual sales of $150 billion and 125 million units shipped–is in terrible shape. Last year, for the first time since 1985, sales actually fell, dropping by 4%, according to Gartner Dataquest. That’s devastating in a business accustomed to 15%-plus annual surges. All indications are that this year will be just as bad. Corporations, once voracious buyers of all things tech, are spooked by the economy and have snapped their pocketbooks shut. People don’t feel compelled to buy PCs at home either. Only 11% of consumers say they want to buy a new PC, according to consumer technology research firm Odyssey. That’s the lowest level since 1995. A key metric of industry health, the average time before a buyer replaces a PC, has stretched to an unprecedentedly long 41 months for business desktops and almost five years for consumer machines.”

The article goes on to discuss what each of the leading players is doing to bring growth back into the market.

The reality is that the tech industry in the developed markets has matured. It is now an incremental, upgrade market. This is the reality which few are seeing. In Christensen’s language, what the industry needs to do is to get new growth markets through disruptive innovations. Instead, these are trying out sustaining technologies in a market that is already in overshoot.

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