Computers and Information Technologies are as ubiquitous in our lives today as the air we breathe. Computers have led to a third information revolution taking its place alongside agricultural and industrial revolutions. We see computers everywhere, in Desktop PC’s, PDA’s, cars, washing machines, ATM’s – everywhere. The resulting multiplication of humankind’s intellectual strength has affected our daily lives and also changed the way in which we search for new knowledge and resources. At a steady rate of around 11%, the last decade has seen an unprecedented boom in the computer industry – and nearly everyone is being affected by the phenomenon. This unprecedented growth rate has led to amazing technological progress since the inception of electronic computing in late 1940’s. By way of comparison, had the transport industry kept pace with the computer industry, today we could travel from coast to coast in about few seconds for roughly few pennies. Of course in almost any case, growth can lead to growing pains. In the case of the computer industry, the expectation that nearly everyone has a computer leads to the need for nearly everyone to own a computer.
The Internet as a Computer Sales Driver
The advent of the internet has certainly spurred on the success of the computer industry. The increase in the number of internet users worldwide has grown from 274 million in 1999 to 605 million in 2002 with a staggering growth of 119 percent. In the US alone, the number of Internet users has increased by 53 million (16 percent) with a penetration of 52 percent. The percentage of total population in the world with internet access has increased from 7 percent 1999 to 9 percent in 2002.
Explosive Growth In Computer System Sales
During the past 5-6 years, there has been explosive growth in the number of PC buyers – not only in developed countries like the United States and Europe but also in the Asia Pacific and other regions of the world. In fact, the Chinese computer industry grew a whopping 38 percent in 2004 almost dwarfing our growth rates of the United States , which has been 35.2 percent over the period of 1990-2000. Worldwide growth in the sales of Personal Computers has increased from 394 million in 1999 to 550 million in 2002. Total numbers of PC’s in US are 178 million which accounts for 62 percent penetration in US households. As an example, in the United States 625 people have PC per 1000 inhabitants. This high ratio is in contrast to the percentage of the total world population where only 9% of people have a personal computer. However this has been a radical increase from 1999 when only 5 percent of the world population had personal computers. Because of this explosive growth, the market competitors, in anticipation to tap this highly growing market are keeping their prices at rock bottom and producing in huge volumes thus effectively maintaining their profit levels despite of low margins.