Issue #0526/3 - Falling hardware prices are a familiar sight. IT manufacturers have their work cut out to maintain financial growth.
Even though prices in the IT market, for PCs and printers in particular, have steadily plummeted over the past two decades as technology becomes more pervasive and cheaper to produce, printer companies are succeeding in growing on the financial level.
Much has been made in the press recently about Dell’s ‘disappointing results’ but this doesn’t mean that the company hasn’t been working hard - shipping ever increasing numbers of units. The results are not ‘poor’, they are just not as high as the financial sector has come to expect from Dell.
What it means is that the IT market in general still has enough volume potential to counteract the effects of the falling prices, keeping large suppliers in business, but not enough to sustain the massive financial growth that Dell in particular has known in its prime growth years.
Likewise with Hewlett-Packard’s IPG, even though the company has posted fiscal third quarter results showing significant unit growth (between 8% and 67%), value growth for the group was a mere 5%. The best illustration is the highly competitive home consumer market where unit growth was 8% but value growth was only 1%.
Looking to the future, it is only the advancement of technology that will maintain the market potential for companies like Dell and Hewlett-Packard. This is why research and development is so vital to the industry.
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