Industry OverviewThe computer hardware industry include establishments engaged in manufacturing, trade, distribution and retailing of computers (ranging from supercomputers to portable hand held devices), peripheral equipment (monitors, storage devices, terminals, printers, scanners, etc.), and local area network (LAN) switches, routers and modems. This industry segment has a high concentration of small- and medium-sized enterprises, however, large manufacturers account for employment and market share.
According to a 2005 market study, the world computer hardware market has rendered total revenues of around $366.9 billion that represents a compound annual growth rate (CAGR) of 4.8% for the five-year period from 2001-2005. A major reason for this overall lucrative growth is the sales of computer hardware apart from the PCs that have yielded total revenues of $208.2 billion, which is equivalent to 56.7% of the overall market value.
The growing market, with an expected CAGR of 5.9% for the five-year period 2005-2010 is anticipated to drive the market to a value of $489.1 billion by the end of 2010.
The United States is the world's largest market for computer hardware. In 2006, U.S. spending on computer hardware reached $136 billion, which was about one-third of the world trade, according to International Data Corporation (IDC) estimates. Of this total spending on computer hardware, computer systems accounted for 56 %, followed by networking equipment at 19 %, peripheral equipment at 16 %, and storage hardware products at 9 %.
The main segments of computer hardware market include -
Competitive Landscape
The computer hardware industry is increasingly competitive and the consistent requirement to develop new products and introduce new technologies is intensifying. In this scenario, scale advantages are increasing. Though the computer market has always been pushed by successful new products that necessitate substantial investment in production and marketing - the amount of investment required is increasing, mainly as a result of the rising costs related with the development and marketing of new products. Accordingly, the availability of substantial financial resources is becoming an increasingly competitive, a major factor in the industry.
Major MarketsUKAs per the 2004 reports, the total UK computer hardware market was worth �11.82bn at end-user prices which was a rise of 5.6% on 2003. The market had declined in value terms between 2000- 2003, as the business sector experienced difficult trading conditions such as shortening of planning cycles shortened & canceling of major large-scale strategic projects. However, in 2004-2005, the market started experiencing more new projects from firms to enhance their systems, in terms of both applications and infrastructure.
For generating the required volume sales, major vendors are focusing on the small-& medium-sized enterprise (SME) market, which comprises the mass of UK businesses. Vendors are introducing lower-cost servers & storage systems aiming at the SME sector. With the sector becoming an increasingly competitive market, there is a constant need to launch new products & development of new technologies which has in turn risen the scale advantages. Although the market has always been driven by successful new products, the amount of investment needed is growing, primarily as a result of the rising costs associated with the development and marketing of new products. And accordingly, the availability of significant financial resources is becoming an increasingly competitive, discriminating factor in the industry.
UK's computer hardware market is entering into a mature growing phase where consolidation & a struggle for market share features as key pointers. The increment of New product development (NPD) costs will lead to the growth of pressure on companies in order to gain in either scale or niche focus, ultimately helping the bigger companies to manifold while the smaller ones gradually go unnoticed.
CANADA
Canadian computer hardware market size stood at $15.5 billion in 2007. The market represents 38% of the total Canadian Information Technology (IT) market. It is expected that over the next three years, hardware industry would grow with an average rate of 3.5% annually, with sales reaching $16 billion by 2010.
Opportunities in the Canadian Computer Hardware market
- The PC market will remain the largest sub-sector of the computer hardware market. Of this segment, notebooks will have the largest share.
- For the multi-user hardware or server market, the volume server spending will be the key growth under this category.
- In the storage area, network attached storage and storage area networks will be the main growth areas.
- Overall, the hardware sector has many opportunities in the �Green IT�, booming especially in power conserving technologies such as heat and lighting sensors, video conferencing devices and global positioning systems.
USA The computer hardware market size of the United States in 2006 was $136 billion � about one-third of the global total. Spending on computer systems accounted for 56 percent of this total, followed by networking equipment at 19 percent, peripheral equipment, 16 percent, and storage, 9 percent.
The computer hardware sector includes companies engaged in manufacturing computers peripheral equipment and local area network (LAN) switches, routers and modems. This industry sector has a high concentration of small- and medium-sized enterprises that account for the majority of the establishments in the U.S. hardware sector, but large manufacturers account for more than 70 percent of industry employment and over 80 percent of shipments.
U.S.-based computer equipment shipments fell down by 2 percent in 2006, to $76.6 billion. However, domestic demand was strong for smart handheld devices and networking equipment. Overall shipments for peripheral equipment remained moderate, with printer sales increasing, stimulated in part, by growing consumer interest in digital
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