the chart shows, Compaq sold more units than Dell, IBM, Packard Bell-NEC, and Hewlett-Packard. ?Figure 1. World Wide PC Vendor Market Share for 1998 It is forecasted that additional consolidation & shakeouts will leave 70% of the market share with the top five vendors by the early 2000s.(3) The PC industry's growth has been boosted by the sub-$1000 PC. It is anticipated that the average desktop prices will drop below $1400 by the year 2000. The means used to sell PCs also can have a positive/negative affect on PC pricing. Direct sellers traditionally have been able to underprice indirect sellers.(3) The reduction in prices is mostly due to the drop in major component parts of PCs. All of the competitors listed above offer standard PCs that contain mostly the same components. Therefore, there is little differentiation between the various competitors PCs.(3) The reliance on the component suppliers does present risk for the PC industry. Most computer components are standardized and the industry relies on one or two suppliers for two critical components: the CPU and motherboard. Approximately 85% of the worlds CPUs include an Intel Processor and Intel has been able to significantly increase its share of the motherboard market. This gives Intel a significant control on which and at what cost a PC vendor can provide a computer with its CPU and motherboard.(3) The packaged software market has always been the fastest growing segments of the computer industry. The packaged software industry consists of three general market segments: application solutions, application tools, and systems software. Applications software performs specific industry or business functions and currently this market provides over $56 billion in sales and is expected to grow to a $98 billion dollars by 2001. Application tools provide data management, manipulation, access, and retrieval. It currently provides over $31 billion dollars in sales and is expected to grow over ...
