Computers
SIC 3571
NAICS 334111
The industry produces digital computers that may be in such configurations as mainframe computers, super computers, and personal computers. This diverse class of machines shares these common abilities:
they store the processing programs and data necessary to execute programs
they can be freely programmed in accordance user requirements
they perform arithmetical computations specified by the user
they execute—without human intervention—a processing program requiring them to modify execution by logical decision during a processing run
Three mature world markets—Japan, the United States, and Europe—accounted for the majority of global production and sales of computers and related products during the early 2000s. Between 2003 and 2005, the worldwide computer market grew 11.3 percent annually, and during the first quarter of 2005 alone, growth was 10.3 percent.
In the mid-2000s, Dell remained the worldwide market leader, with 18 percent of sales. HP commanded 16 percent, IBM garnered 7 percent, and Fujitsu had 4 percent. In the United States, Dell led with 33 percent of the market, followed by HP with 19 percent, Gateway and IBM with 6 percent each, and Apple with 4 percent. Prices were shrinking, largely due to market maturity and technological advances driving parts costs down. Two new companies entered the top ten ranks, as reported by Gartner: Aver Corp. and Lenovo Group Ltd.
The trend toward digital technology was set to explode in the mid- to late 2000s with digital convergence, whereby technologies from different tech industries were merging. According to Business Week, the tech industries were poised for a "Big Bang" as the computer, consumer electronics, and communications industries merged technologies and products, forming new alliances and partnerships as well as new competitors.
The electronic computer industry can be divided into three categories: supercomputers, mainframes, and personal computers. Each category is distinguished roughly by the speed with which a computer can process instructions and data.
Supercomputers are the most powerful class of computers with extremely high bandwidth to provide users with the greatest possible capability for complex uses by scientists, security experts, mapping professionals, theorists, and economics experts. Medical researchers use them to conduct research in cell studies and other uses that may save lives and prevent or reverse disease. A variety of professionals benefit from conducting theoretical and applied research enhanced with digital imaging. In the 1980s, the manufacturer Cray built powerful supercomputers and to this day has an enviable reputation for building complex, high-end supercomputers favored by many scientists and engineers. During the 2000s, supercomputers were used for weather forecasting and in engineering research related to aerospace, automobiles, and nuclear science. In 2005, IBM was near completing its latest supercomputer, the Blue Gene/L. Housed at the Department of Energys Lawrence Livermore National Laboratory, the Blue Gene/L ran at 135.3 trillion floating-point operations per second (TFLOPS) in March 2005. Engineers at the laboratory expected the machine to achieve 270 TFLOPS that summer, as reported in Popular Science, five times as fast at its nearest competitor. About 50 times smaller in size than previous supercomputers, the Blue Gene/L was used for nuclear weapon simulations as well as biochemical applications. Collectively, 2005 supercomputers were about 1,000 times faster than their 1995 predecessors.
Mainframe computers are used to process high-volume general business applications where increased performance is required. These are large and powerful machines, albeit with less bandwidth capacity than a supercomputer, that can hook up with other computers or terminals to allow dozens or even hundreds of employees to work at low security risk stations. The term in the early days of computers referred to the "main frame" or "central processor unit" of a so-called batch computer.
A personal computer (PC) is a system with imbedded processing capabilities that primarily is intended for a single user. All are based on the microprocessor—manufacturers use technology to put an entire central processing unit or "CPU" on one silicon chip. Businesses rely on personal computers for a variety of functions, including word document creating, accounting, desktop publishing, and for running spreadsheet and database management applications. Microsoft typically sells all these functions in a single software package that many computer hardware sellers either install on the machine or sell to customers with the PC.
Personal computers first appeared in the late 1970s. One of the first and most popular personal computers was the Apple II, introduced in 1977 by Apple Computer. In the next four years, new models and competing operating systems seemed to appear daily and some disappeared overnight. Then, in 1981 IBM became competitive with a personal computer, quickly dubbed a PC. The IBM PC sold well, and attracted so-called IBM "compatible" machines or "clones" by makers such as Kaypro. Kaypro and others eventually went into rummage sale lots, but Apple Computer remained, and many so-called "Mac Addicts" attached loyalty to the brand which by 2002 relied on a popular operating system called the MAC OS X.
In the twenty-first century, one's personal computer is either a "Mac" or a PC that is a distant, cousin of that first IBM PC. As distinctions fade, the newer, more powerful, video card-enhanced personal computers in the workplace and classroom have replaced what used to be slightly higher-end models called "workstations." Today, off the shelf or with an upgrade, Macs and PCs are used for work and recreational uses such as playing video games with startling real graphics, downloading music (leading to cries of copyright infringement from the music industry), and providing space to load information and entertainment on DVDs and CDs.
The United States and Japan were the largest supercomputer manufacturers with the largest markets. Japan—although the second-largest global market—purchased most of its supercomputers from domestic sources, primarily from industry leaders NEC, Fujitsu, and Hitachi. Foreign suppliers had difficulty making advances in Japan's supercomputer market for three primary reasons: Japan's government greatly supported its domestic industry; Japanese industry's own tendency to purchase from domestic manufacturers; and Japanese industry's investment in Japanese-manufactured proprietary equipment and software. Almost all foreign imports to Japan came from the United States, which accounted for 25 percent of Japan's computer hardware sales, approximately US$40 billion.
Due to the rise and development of client/server technology in the late 1980s and 1990s, mainframe sales decreased sharply. For example, U.S. mainframe sales were about US$12.4 billion in 1992 and fell to US$11.3 billion in 1993. However, the demand for mammoth repositories of information generated by the Internet has created renewed interest in mainframe systems. Industry leader IBM still held 80 percent of that market, and mainframe revenues were growing. Sales of IBM's zSeries mainframes were up 14.9 percent from 2003 to 2004. IBM was being challenged by Japanese leaders Hitachi and Amdahl (recently acquired by another major player, Fujitsu). U.S. leader Dell also claimed US$312 million of the mainframe market in 1997 and showed itself increasingly competitive in the 2000s.
In 1997 the midrange systems market was showing renewed growth, especially in foreign markets. As the economy strengthened and the role of midrange systems in client/server technology grew, sales began to increase. According to a report in VARBusiness, midrange systems were slated to become the hottest market in computing during the late 1990s. Major players in the industry included IBM and Hewlett-Packard. IBM was still the leader in midrange systems, and during the mid-2000s focused on making its platform competitive with other systems, such as Linux, and with other companies in terms of operational and development cost. Hewlett-Packard was a strong competitor, partnering with Intel to facilitate its growth in the market and using its economic clout to merge with Compaq for wider capabilities and marketing clout.
Worldwide revenues for the server market grew 6.2 percent in 2004, and the market was valued at more than $49 billion. Between IBM and Hewlett-Packard, the two companies accounted for 60 percent of sales. In terms of revenue, IBM remained the market leader, but HP shipped more servers. Total number of units shipped grew 19.3 percent in 2004. IDC reported a declined in the mid-range and high-end server sectors, but other servers were realizing steady market growth, including Unix, Windows, and Blade servers. Linux servers remained the highest growth segment of the market, worth $1.3 billion in the fourth quarter of 2004.
Environmental concerns also played a major role in the electronic computer industry. In 1993 a collaborative report—A Workstation Life Cycle Environment Study —produced by several...
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