This opinion began being felt on Feb. 16th when Hewlett-Packard Co. and Dell Computer Corp. announced quarterly results were down. That disappointed Wall Street and their stock prices were punished. Many research continues to point out that this industry might be on its way down, in terms of financial gain. T
he industry will always be alive and kicking, but as prices continue to drop, profits will drop as well. That is a good thing for consumers, but a bad thing for businesses. Although the research continues to point out the decline, nobody is predicting this to be a long-term slowdown or a significant fall in demand for high tech gear. Corporate demand for PC’s is dwindling, therefore in order for companies to sell, they must lower their prices.
The price for a top of the line PC continues to drop. Every time Intel produces a new processor, they freeze the market. When Intel introduced its new Pentium III, they advertised it cheaper than their previous Pentium II. Consumers seeing that won’t pay top dollar for PC’s anymore. That is one of the main reasons the industry is at a lull. The only companies that seem to be prospering are those whose main focus is the Internet. Those companies will continue to prosper as the Internet becomes (already is) the This article can relate to class many different ways. Not only in different ways, but also areas.
The fact that the computer industry profit margin is at a low, is supported by a lot of research. This research is quantitative in that, it is given in percentages and statistics. For example, A survey for top corporations by market research firm Forrester Research Inc, shows they plan to raise information technology spending by just 1% this year, down from 4% in 1998. This quantitative research that is shown throughout the entire article is also primary data. Unlike the law of diminishing demand which relates to most of the business world, the demand for computers is falling, as is the price.
The graph on the first page on the article clearly shows that the first-quarter PC sales is down half compared to 1996. Then in the article it says the pricing pressure is spreading where sub $1000 PC’s are ruling. Pentium also shows an example of a product line. Their Pentium II and Pentium III processors are only a few in a line of 10 or so. Finally, the last thing that relates to class is how Intel acts as a reference group and/or group leader to the entire market. It says in the article that when Intel releases a new processor, the entire market freezes.