Technology

Since the turn of the century, the use of PCs has continued to grow. Today, it is estimated that most consumers prefer PCs over desktops.  Market research shows that in 2007, the total sales for PCs outstripped Desktop sales, attracting more players to the market. Consumers have been looking for more mobility and flexibility in the PCs market, and the competition in the industry is currently pegged on innovation to satisfy changing consumer expectations (Hickins, 2009).  In 2007, notebooks accounted for a higher share of revenues for PC makers like Hewlett-Packard, Dell, Lenovo, and others who have since then engaged in innovation to come up with products that suits the market demand.  In the same year, the total industrial revenue from notebooks was 45.6 percent compared to 43.1 percent from desktop PCs (Ferguson, 2006).
The global notebook market is also on the rise.  Most consumers in the large markets like India are also showing preference for notebooks compared to Desktops.  In 2008, it was estimated that more than 221 million notebooks were sold up from 204 million notebooks which were sold in 2007 (Shah and Dalal, 2009, p. 7).  This represents an 8 growth in 2008. The market experienced the highest growth rate of 12.1 in 2007 which means since 2007, there more consumers using notebooks compared to previous years.
Shah and Dalal (2009, p. 6) asserts that the global PC industry generated more than 183.5 billion which was a 9.30 growth from 2006.  In 2008, the total revenue increased to 196.1 billions representing a 6.90. It is estimated that in 2009, the total revenues will increase to 206.7 billion, a 5.40 growth rate (p. 6). By 2012, Datamonitor estimates that notebooks will record a market share of 30 in the industry (Shah and Dalal, 2009, p. 6). However, due to erosion of prices, it is estimated that a 10 growth in notebooks will correlate to a 4 growth in dollar value. This means that increased production will result to erosion in prices as price walls grows. It is estimated that most companies are adjusting their business model in order to maintain profitability.
The increased sale of notebooks compared to Desktops has rekindled a bitter war in the market.  More and more players are entering the market owing to the perceived high revenues in the industry.  This has resulted to erosion of prices. For example in 2005, an average notebook PC was retailed at 1,289.60. However, this has dropped significantly to 1,007.20 (Research and Markets, 2009). This shows a 21.9 percent decline in the prices in a period of three years only.  Erosion in price has forced most manufacturers to focus on economies of scale but most important factor has been innovation to bring in more features.
The increased competition has turned into a price war between major players.  Analysts point out that the drive to produce low cost computers has become a competitive edge for most manufactures.  For example the recent OLPC project was aimed at encouraging consumers to purchase low cost computers and at the same time engage in promotion dabbed GOGO (Get One, Give One).  On the other hand, the major players in the industry are also facing competition from companies like Zonbu and Everest who have preparing a notebook that will retail at 299 (Hruska, 2008). It is aimed at providing mobility at an affordable price than what is currently offered in the market. As a result major player are also coming up with strategies to fight the rising competition. For example, recently Dell which holds sizable share of the market entered into an alliance with Best Buy in an initiative that is aimed at putting notebooks in front of consumers.
The major players in the industry are competing on their ability to satisfy consumer needs.  It is estimated that the top five firms had a market share of 2007 and in 2008 they increased this share to 60 owing to their increased investment in innovation to satisfy consumer demands (Shah and Dalal, 2009, P. 4). The main top five competitors include Hewlett-Packard, Dell, Acer, Lenovo, and Toshiba in their descending order.  These are the main players who constitute share about 60 of the global market (Shah and Dalal, 2009, 2009, p. 4). In the global market, Hewlett-Packard leads with 18.9, followed by Dell with 16.4, Acer with 9.5, Lenovo with 7.9, and Toshiba with 4.5, while others share the remaining 42 of the market share (Shah and Dalal, 200, p. 9). Notable in the notebook industry has been Apple which has gained substantial market share especially in U.S as compared to Windows notebooks mainly based on Apples brand reputation (Martin, 2009). In terms of profitability, Apple leads other companies. Apple has been able to retain its consumers for along period compared to the rest of the company.  Consider a four year period Apple has retained 71 of users, Dell 55, HP 47, Toshiba 51, Compaq 42, Gateway 41, Acer 43, and Sony 49 (Shah and Dalal, 2009, p. 7). This indicates that Apple notebooks are preferred by consumers due to their strong brand. However, research also shows that Apple consumers have a higher level of income compared to other users which means Apply could be the brand of choice for upper income consumers.
PCs industry is becoming one of the most competitive industries in the global market. There are more and more new entrants in the market which is growing at an unprecedented rate.  The growth has been fueled by increased demand for high quality PCs that can perform different functions with mobility.  The PC notebook industry is dominated by five major players including Hewlett-Packard, Dell, Acer, Lenovo, and Toshiba who share about 60 of the market.  The increased demand of PCs has rekindled a price war that has seen erosion in the average price of a PC notebook. Future forecast shows that there will be more growth in this sector in line with changing consumer demand but competitive advantage will be based on the ability of the notebook to satisfy consumer needs especially in regard to mobility and efficiency.