Electronic Computers

SIC 3571

Companies in this industry

Industry report:

Included in this industry are digital computers, analog computers, and hybrid digital/analog computers. Establishments primarily engaged in manufacturing machinery or equipment that incorporate computers or a central processing unit for the purpose of performing functions such as measuring, displaying, or controlling process variables are classified based on the manufactured end product.

Industry Snapshot

The computer industry is segmented by product category. Different kinds of computers contain differing components, varying performance and price levels, and, to a certain extent, service different functions and markets.

According to figures from Dun & Bradstreet's Industry Reports, the overall electronic computer manufacturing industry in the United States generated annual revenues of $215.8 billion in 2009. About 63,300 workers were employed at 2,150 industry-related establishments. Although only about eight percent of these businesses employed more than 50 people, these establishments accounted for 98 percent of total industry sales. Employees were concentrated in states where the largest computer firms resided: California and Texas. The top four computer makers in the United States in 2010 were Hewlett-Packard, International Business Machines (IBM), Dell, and Apple, and the outlook for the industry as a whole looked positive. According to Jay Chou of IDC, as stated in July 2010 in eWeek, "The PC market remains robust and in a recovery phase, despite challenges to a broader economic recovery, such as slow job growth and a more conservative outlook in Europe and Asia/Pacific."

Organization and Structure

At the most fundamental level, electronic computers can be categorized as either analog or digital. Analog computers are electromechanical devices whose operation is based on continuously variable quantities such as lengths, weights, or voltages. Digital computers, by contrast, operate by processing discrete quantities of digits or characters and offer greater flexibility in programming. Thus, almost all computers today are digital, and analogs represent a very small portion of industry production and sales. For this discussion, the term "computer" refer to digital devices unless noted otherwise.

General-purpose computers are traditionally categorized by size, function, and processing power. These main categories are supercomputers, mainframes, midrange systems and servers, and microcomputers (PCs and workstations). While some have advanced formal definitions of each category, in practice the boundaries between each class are vague; for example, there may be little or no difference between a low-end server and a high-end microcomputer.

Supercomputers are high-speed number crunchers that allow scientists, engineers, and government researchers to process and manipulate massive amounts of data very quickly. Their performance is typically measured in terms of billions of floating point operations per second, or gigaflops, as opposed to millions of instructions per second (MIPS) assigned to most other types of computers. The fastest supercomputers reach processing speeds in the teraflops, or trillions of floating point operations per second. These technological taskmasters are used to complete complex feats, such as forecasting weather, designing ships and automobiles, conducting nuclear research, and carrying out advanced simulations. In the late 2000s, IBM developed a supercomputer called the Roadrunner for use at the Los Alamos National Laboratory. The Roadrunner was the first computer that surpassed the 1,000 teraflops threshold, entering the realm of pentaflops, or quadrillion floating point operations per second. IBM expected to have a system ready for U.S. government use by 2012 that would reach 20 petaflops, or roughly 10 times the performance of the most powerful system available in 2009. Computer companies continued to strive for more speed and performance. According to a 2009 IBM press release, supercomputers' capability "improves by a factor of 1,000 every decade."

An important distinction exists between traditional high-powered "vector," and low-powered "parallel" supercomputers. The newer parallel devices join as many as tens of thousands of cheap microprocessors to accomplish what vector systems achieve with a handful of more expensive processors. Though usually less expensive, systems that use massively parallel processing (MPP) technology can perform many tasks faster than traditional vector systems. Because supercomputers are such specialized devices-- usually regulated by the U.S. government--they are mostly used in defense and limited academic research settings.

Mainframe computers generally offer less raw computational power than supercomputers and are most often used to handle large volumes of large enterprise or institutional applications. Mainframes are also used by large Internet and e-commerce companies to meet the high-volume, high-reliability requirements of such firms. Traditionally, users accessed mainframes through satellite terminals, but mainframes are now commonly accessed by a variety of different devices over corporate networks. Some mainframes also offer add-on features that make them competitive with low-end supercomputers. As of 2010, the fastest mainframe was IBM's zEnterprise, which contained 96 microprocessors running at 5.2Ghz and was capable of executing more than 50 billion instructions per second.

Midrange Systems.
Midrange computers, also called minicomputers and servers, serve anywhere from a few to several hundred users, either locally or at remote locations. Small to medium-sized businesses, company departments, and manufacturing facilities commonly use midrange systems for communications processing, automation, reporting, and networking. Midrange systems often employ vendor-developed proprietary applications that are tailored to the organization's needs. Newer "open systems," though, allow the use of standardized operating systems and applications. Midrange computers can range in price from $10,000 to approximately $1 million.

Midrange systems include the diverse array of servers that are used in local area networks (LANs) and other networking arrangements. These servers are similar to midrange or mainframe computers in function because they serve multiple users with shared data yet are similar to personal computers in structure because they are based on microprocessors. In fact, the lowest-end servers are merely high-end personal computers or workstations configured with the necessary software and telecommunications hardware. High-end servers often contain multiple microprocessors and have cut into the market traditionally served by computers based on more advanced processors.

By far the industry's largest product segment, microcomputers, divided between personal computers (PCs) and workstations, are single-user, self-contained units. They offer the least raw computing power of any segment of the industry but provide the greatest amount of flexibility, diversity, and portability. This segment includes laptop and notebook computers.

Workstations are a special class of high-powered microcomputers. Many workstations are capable of performing intensive research, engineering, and graphics tasks that allow them to compete with low-end supercomputers and mainframes. High-performance microprocessors allow many workstations to employ high-resolution or 3D graphic interfaces, sophisticated multitask software, and advanced communication capabilities. Workstation prices can range from $3,000 to more than $100,000. The traditional definition of workstations is microcomputers based on reduced instruction set computing (RISC) microprocessor design, but the distinction between workstations and personal computers is becoming increasingly blurred.

Background and Development

The first mechanical calculating devices were built in Europe in the seventeenth century. The English mathematician Charles Babbage carried that concept a step further in the nineteenth century with the design of the Analytical Engine, the first digital computer. The Engine design showed how programs could be stored on punched cards similar to those used by French looms. Although the Analytical Engine was never built, it influenced the first digital mechanical computers and helped pave the way for the computer revolution that changed the world.

The few computers in existence in the 1940s were primarily used to grind out tables of complex mathematical functions. Researchers that understood the potential of more advanced devices, however, were successful in securing sizable U.S. government and military grants to fund further development. The first general-purpose electronic computer, ENIAC, was completed in 1946. ENIAC, which stands for "electronic numerical integrator and calculator," required partial rewiring in order to program it for different tasks. The first operational stored-program electronic digital computer, similar in function to computers of today, was completed in 1949 at the University of Cambridge. Although various analog devices were also developed and tested in the 1930s and 1940s, analog computers played a relatively minor role in the development of the industry.

The electromechanical computers of the mid-1940s had already been replaced by the early 1950s with more powerful and flexible electronic versions. The UNIVAC system, developed for the U.S. Bureau of the Census, and a similar system, used by the General Electric Company, were two of the first commercially viable electronic computers put into use. By the end of the 1950s, business, government, and scientific communities began to view the computer as a dependable and potentially effective tool for an enormous variety of tasks.

Timesharing systems, pioneered at the Massachusetts Institute of Technology, allowed public and private entities to gain extensive access to large, expensive mainframe computer systems in the 1960s. Timesharing allowed several users at remote locations to simultaneously use a single machine. Users were charged for the amount of time that they were actually connected to the computer by cables or telephone lines. Although timeshare technology was first used primarily for scientific and technical endeavors, business and industry participants soon learned that they too could benefit from access to centralized processors.

By the end of the 1960s, the computer industry was poised for rapid growth. Computers in the 1960s were already up to 100 times faster than their counterparts of the 1950s--and computer memory and speed continued to rise at an increasing rate. Furthermore, the first minicomputer was installed in 1965, breaking ground for an entirely new segment of the industry. The number of digital computers had increased from less than 15 in 1950 to more than 40,000 by the late 1960s. Going into the 1970s, however, all sectors of society were beginning to seek the computational power offered by supercomputers and mainframes to handle labor-intensive tasks. In addition, industry leaders were continually striving to expand their market by increasing computer access to end-users, rather than only trained computer professionals.

Development of the microprocessor in 1971 allowed the entire central processor of a computer to be placed on a single silicon chip. It was this development that led to subsequent rapid expansion and transformation of the industry. In addition to the proliferation of supercomputers, mainframes, and midrange systems that took advantage of new chip technology, workstations and PC devices began to emerge. By the early 1980s, more than 500,000 general-purpose computers had been installed in North America. Furthermore, the market was growing at an annual rate of about 20 percent.

In the early 1980s, the computer industry consisted of several niches, each dominated by one or two manufacturers that had been the first to successfully exploit an opening in the market. International Business Machines (IBM), Sperry, Wang, Unisys, and Digital Equipment Corporation (DEC) were among the many companies that generated immense revenues during the decade. For the most part, these companies succeeded by developing proprietary hardware and operating systems that effectively prohibited customers from switching to a competitor's product.

Manufacturers often enjoyed profit margins of 70 to 90 percent on sales of various mainframe and minicomputer installations. Demand ballooned throughout the decade, as business, industry, and the public sector invested billions of dollars to computerize and automate information management, manufacturing, computationally intensive research, and other activities. As many mainframe companies settled into their respective niches, however, the rapid advancement of microprocessor technology caused a market shift that took many industry leaders by surprise.

Many industry participants failed to foresee the dominance of PCs, workstations, and some midrange systems. Within a period of a few years, in fact, technological innovations turned the slow and limited microcomputer of the early 1980s into a relatively low-cost, powerful, and speedy contender. Furthermore, by networking these smaller devices, users were able to develop cost-effective systems that could handle tasks previously performed only by mainframes and powerful minicomputers.

Although the demand for mainframe and supercomputer sales advanced throughout most of the decade, manufacturers that focused solely on those products and failed to respond to the inevitable dominance of workstations and PCs found themselves in serious financial trouble in the mid-1980s. The number of PCs purchased by Americans rose from fewer than 500,000 in 1980 to approximately 7 million in 1984. By 1989, annual PC sales approached 10 million. Sales of RISC workstations grew at a rate of more than 110 percent annually between 1986 and 1988. As PCs increased their share of the entire computer-related market revenues from 10.6 percent in 1987 to 15.2 percent in 1991, the share of the market held by large-scale systems fell from 12.6 percent to 9.5 percent.

Many companies that led the computer industry in the 1980s suffered massive financial losses in the early 1990s, as the industry realized a serious reduction in the overall growth of domestic demand and companies either retrenched or shifted their focus. In addition to the global recession of the early 1990s, manufacturers were beginning to confront the fact that the U.S. computer market was becoming saturated. Also, the shift from high-profit, large-scale proprietary systems to low-margin, open architecture, desktop computers was reducing profit opportunities. Wang Laboratories, for instance, declared bankruptcy after posting an $11 million loss on $1.2 billion in sales and was later purchased by Getronics of the Netherlands. IBM accrued more losses in 1992 than most industry leaders generated in sales revenue.

Indeed, inexpensive personal systems that offered computing power similar to that offered by the mainframes of the early 1980s were now viewed as a commodity by many consumers. Rather than purchasing a PC system from a retail outlet at a price of $4,000 or $5,000, many customers in the early 1990s began purchasing more advanced systems through the mail or at discount warehouses for approximately $1,000 to $2,000. This trend only accelerated in the mid- and late 1990s with the explosive growth of Internet shopping (often direct from manufacturers) and the advent of sub-$1,000 PCs.

By most measures, the computer industry had a phenomenal run in the 1990s. Based on estimates by International Data Corp. (IDC), between 1992 and 1999 annual PC shipments worldwide skyrocketed 280 percent, including a 295 percent leap in U.S. shipments. Although global unit growth slipped to single-digit percentage gains in the early 1990s, the late 1990s saw consecutive years of 15 percent or greater increases, culminating in a torrid 20 percent unit rise during 1999.

Still, the financial picture was less triumphant. U.S. industry revenues stalled in the $50 billion to $55 billion range in the mid- and late 1990s, as price cuts all but washed out gains in unit volume. In 1998, for example, U.S. shipments rose about 14 percent, but revenue only treaded water with a one percent uptick, according to a published assessment by Forrester Research.

In the early 2000s, the industry struggled with a weak economic climate that presented challenges in business and consumer markets alike. According to the U.S. Census Bureau, after a sharp increase from $56.9 billion in 1998 to $64.7 billion in 1999, electronic computer shipment values fell in 2000 to $62.9 billion. As the economy took a turn for the worse, shipment values plunged to $49.3 billion in 2001. This affected virtually every product segment within the industry, including servers and workstations. Along with values, actual unit shipments also declined, falling from 27.2 million in 2000 to 22.7 million in 2001.

A number of factors were causing consumers to delay purchases of new computers in the early 2000s. The terrorist attacks that occurred on September 11, 2001, shook already-declining levels of consumer confidence. By late 2002, rising unemployment and a possible war with Iraq served to further exacerbate the average consumer's outlook. Thus, many were content to get by with existing personal computer (PC) technology in the short-term, saving discretionary tech purchases for items like DVD players, MP3 players, and digital cameras.

In the corporate sector, these same conditions led to a temporary slowdown in technology spending, as companies awaited better times. According to several industry analysts, the wave of year-2000-related new equipment purchases that took place at the end of the 1990s, as well as the availability of quality used equipment from bankrupt Internet companies in the early 2000s, also had a negative impact on the corporate market for new electronic computers.

Global competition among computer makers favored nimble, low-cost producers, and many of these were U.S. firms. In fact, according to International Data Corp. (IDC), the four largest U.S.-owned computer makers--Dell, Compaq, Hewlett-Packard, and International Business Machines (IBM)--controlled almost 40 percent of world PC shipments in 2007.

Although price pressures eased somewhat in parts of 1999 and 2000, when a shortage of chips left PC makers struggling to keep up with demand and gave an opportunity to firm up prices, by 2002 the electronic computer market was characterized by fierce price competition. Beginning in the late 1990s, the industry's pricing climate became relatively unstable. From 1998 to 2000, reported IDC, average PC prices worldwide skidded 18 percent, to $1,543 a machine. According to IDC, average desktop system prices fell 12 percent in 1999, 7 percent in 2000, and almost 10 percent in 2001. By late 2002, all leading computer manufacturers offered complete systems that cost less than $1,000. Price competition also was fierce in the market for laptops, where good values also could be found for less than $1,000.

Aside from pricing worries, in the longer term the PC segment faced a slowdown, particularly in the United States, as the market for conventional PCs grew saturated and as other kinds of devices like wireless Internet appliances gained favor. In the home market, replacement PCs and second or third PCs for existing users were possible sales boosters, but again, other, more specialized devices began to encroach on PCs in these areas. In addition, the economic recession of the late 2000s caused people to curb their spending habits, and consumers were more likely to get by with what they had.

Also contributing to a more fragmented market were handheld computing devices like the Palm Pilot as well as Internet-enabled phones. Although these devices were poised to wrest some market share from traditional PCs in the early 2000s, Business Week, noted their limitations in 2002, explaining, "New hybrid voice and data communicators may pack a lot into them, but there's no single device that does everything really well. Each one is missing a feature, whether it's a color screen, an integrated phone, or a keyboard." Indeed, one of the trends in the late 2000s was the integration of communications and processing equipment technologies so a single device could act as a computer, phone, answering machine, video and still camera, TV, and more.

In the early to mid-1990s, mainframes were roundly derided as archaic beasts, but by 1996, these high-powered creatures found redemption. For one thing, mainframe makers like IBM labored to bring prices down. In the early 1990s, mainframe power cost a steep $100,000 per MIPS of processing power. By 1997, prices were drastically lower, around $10,000 per MIPS, and by 2000, they had plunged to $2,270. As prices spiraled downward, steady demand sustained manufacturers. IBM, the U.S. mainframe leader, experienced as much as 60 percent annual growth during the late 1990s in mainframe demand as measured in MIPS--but this barely kept sales level amid tumbling prices. As companies rushed into e-commerce and other Internet activities, they found they needed mainframes' vast processing speed, storage capacity, and reliability more than ever.

By 2002, some information technology (IT) managers still favored the use of centralized mainframes, citing a number of advantages, including lower human administrative and support costs. However, many organizations were moving away from mainframes, opting instead for network-based and client-server arrangements. This was leading to hefty annual price reductions--in the 35 to 40 percent range--and was forcing manufacturers like IBM to produce newer mainframe systems that were more cost effective and easier to use. Adding to the move toward mainframe alternatives was a growing shortage of workers who were familiar with them.

Much larger than mainframes in terms of revenue, servers are also one of the industry's most diverse categories. By various definitions, anything from a $3,000 souped-up PC to a $1-million mainframe can qualify as a server, depending on how it is marketed and used. Low-end servers, used to power small LANs and low-volume Internet sites, were the fastest-growing segment in the early 2000s; nevertheless, the server market suffered along with the rest of the electronic computer industry. Sales fell almost 20 percent in 2001, according to IDC. However, according to eWeek, by November 2002, IDC indicated that the server market had stabilized. At this time IBM had the greatest market share (29.8 percent), followed by Hewlett-Packard (27.2 percent), Sun Microsystems (12.1 percent), and Dell (8.7 percent).

In 2002, the leading server manufacturers were marketing new "blade servers." As described in the November 26, 2002, issue of InternetWeek, blade servers are "designed to help IT managers cut costs by cramming more computing power into limited space in expensive data centers. Server blades are very thin, rack-mounted servers without onboard storage or power supplies. They're designed to save users costs in real estate, power, and by making storage usage more efficient."

Current Conditions

By the late 2000s, newer devices, especially the tablet PC, were threatening traditional PC sales. These devices, which cost about $2,000 when introduced in late 2000 but had dropped to under $1,000 by 2009, were lightweight, pen-based computers with handwriting recognition capabilities. Although features varied by model and manufacturer, these devices rivaled low-end laptops and notebooks in the areas of performance and Internet connectivity.

One of the most popular tablets in 2010, Apple's iPad, was providing serious competition for other computer makers. Apple sold 3 million iPads within three months of the device's release in April 2010, according to eWeek, and the firm predicted sales of 20 million units in 2011. Research firm iSuppli estimated that the iPad held 84 percent of the tablet market in July 2010. Ben Reitzes of Barclays Capital stated in eWeek that "this category will have a negative impact on overall PC unit volumes, pushing out and even replacing some notebook sales," especially low-end notebooks.

HP responded to Apple's challenge in the tablet market by creating the PalmPad, which was still in development as of July 2010. The PalmPad would use the Web OS platform, acquired by HP when it bought out Palm Inc. in mid-2010 for $1.2 billion. HP also had plans to launch the Slate, a tablet that runs Microsoft Windows 7. Dell, not to be left out of the mix, launched its Android-based Streak tablet PC, which included two gigabytes (GB) of internal storage, a five inch touch screen, a five megapixel camera with LED flash, a front-facing camera for video chat, and wireless Internet and Bluetooth capabilities.

In the overall tablet industry, IDC predicted that worldwide sales would reach 46 million units in 2014. Despite the tablet's initial popularity, however, not everyone thought they were set to take over the industry. Forrester Research predicted that because tablets were less conducive to business applications than larger units, less than a quarter of personal computers sold by 2015 would be tablet-style.

Industry Leaders

Hewlett-Packard (HP), founded in 1938 and based in Palo Alto, California, is a leading company in PCs, workstations, servers, notebooks, and handheld computers, in addition to being one of the leading U.S. manufacturers of computer printers. HP is a leader in Unix operating system-based workstations and computers in general, for which it has designed its own microprocessor chips and developed a version of the Unix software. According to IDC, HP was the largest seller of PCs in the world in 2010, with 18.1 percent of the global market.

In May 2002, HP made waves in the industry by acquiring Compaq Computer Corporation. Before the merger, Compaq recorded 2001 revenues of $33.6 billion and held more than 11 percent of the world PC market. With premerger revenues of $45.2 billion, HP held eight percent of the world PC market. The merger created a new industry heavyweight that competed in a variety of corporate and consumer segments, including digital imaging, digital publishing, infrastructure solutions, and IT services. By 2009, HP was recording annual revenues of $114.5 billion with 304,000 employees.

Prior to the merger, Compaq Computer Corp. introduced its first IBM-compatible PC in 1982. It managed to pull ahead of the competition through a strong capital base and superior marketing. By the late 1990s, Compaq had become the largest PC maker in the world, surpassing IBM. Compaq traditionally focused sales through dealers and distributors, but in the face of rising competition, it began expanding its direct sales efforts in 1997. Compaq produced computers in the desktop, laptop/notebook, and server categories. The company's midrange and low-end server lines proved highly competitive with those of IBM and others, and in 1999, Compaq became the dominant maker of entry-level servers.

Dell Computer Corp., of Round Rock, Texas, first gained its place in the computer industry as a direct seller of discounted IBM-compatible PCs to businesses. By the late 1990s, Dell had started to embrace the consumer market as well, vigorously pushing its web site as a convenient way for companies and individuals to order the exact system they wanted. In addition to desktop models, Dell makes notebooks, lower-end servers, data storage systems, printers, Ethernet switches, and peripherals. In the early 2000s, it began to offer Internet hosting and related services, which carried higher profit margins than some of its hardware lines.

Legendary for its efficient inventory and production systems, Dell climbed its way from being the world's seventh largest PC maker in 1992 to become the world's second largest producer (behind HP) in 2010. In 2009, the company's revenue totaled $52.9 billion, up from $31.1 billion in 2002. Dell had also grown in employment, from 34,600 workers in 2002 to 96,000 in 2009. In addition to its headquarters in Texas, Dell operated headquarters in Japan, Europe, and Singapore, as well as manufacturing facilities in Brazil, China, Ireland, Texas, Tennessee, and Malaysia. About half the company's sales come from outside the United States.

Dell experienced a slight setback when it was sued by the Securities and Exchange Commission (SEC) in 2010. The SEC claimed that three executives of the company had engaged in "fraudulent accounting" and that the firm had not disclosed to investors the fact that some of its revenues had come from payments from Intel Corporation, which had paid Dell to not use central processing units made by Intel's rival,Advanced Micro Systems. Dell agreed to pay $100 million in fines; key executives charged in the case were also fined several million.

Based in Armonk, New York, IBM remains a mammoth in the global computer hardware, software, and services industries. The company, founded in 1910 as Calculating-Tabulating-Recording (CTR), got its start by producing punch-card tabulating machines. IBM grew quickly by stressing large-scale, custom-built systems, and by leasing, rather than selling, its products to most of its customers. Government contracts were largely responsible for the company's rapid growth during the 1940s. It was during this period that IBM developed the Mark I, the first computer capable of retaining a set of rules that could be applied to information that was input at a later time.

By the mid-1960s, IBM owned 65 percent of the U.S. computer market. IBM's mainframe models, the S/360 and S/370, generated massive profits for the company during the 1970s. Although IBM continued to grow through the mid-1980s, the company began to lose focus, and its hesitation in taking the PC market seriously was only belatedly seen as a miscalculation. Between 1985 and 1992, IBM dismissed 100,000 employees and restructured its operations several times.

After a period of losses in the early 1990s, when breakup rumors were rampant and its mainframe business was thought dead, IBM staged a turnaround in the mid-1990s under its new chief executive, Louis V. Gerstner Jr. It branched further into software, high-end consulting, and systems management services to diversify its revenues. Moreover, it made all its hardware businesses--from mainframes to PCs--more competitive on price and features. In the late 1990s, its strategy also included aggressive courting of Internet and e-commerce customers and offering web-oriented servers, like the Netfinity model, and e-commerce services to help other companies build and manage their sites.

Though it lost market share to Compaq and others in the lower-end hardware markets in the early 2000s, IBM's annual revenues in 2009 were in excess of $95 billion, with about half coming from the services sector. The firm had also grown its software business, especially middleware, and commanded 32 percent of the software market based on revenues in 2010. Employees numbered almost 400,000.

Apple Inc. is well known for being the most visible dissenter to the Windows/Intel standards that dominate the PC business. Apple, based in Cupertino, California, was a pioneer in PC technology when it was founded in 1977 and, after several short-lived models, introduced its immensely successful Macintosh line of computers in 1984. From the beginning, Apple's marketing efforts were aimed at the school, college, and home markets. It was never as successful in the business market. By the 1990s, the position of the rival PCs based on Intel microprocessors and DOS/Windows operating systems had become solidly entrenched, and Apple's market share began to decline.

Apple finally decided to license its MacOS operating system in 1995 to spur the development of Macintosh clones, but the move failed to reverse the company's bad fortune. The computer maker's turning point came in 1997 when cofounder Steve Jobs was brought back as interim chief executive. Jobs halted Mac clone licensing, narrowed the company's sprawling product lines, revamped product marketing, and endorsed new product initiatives like the iMac.

By its fiscal 1998, Apple was turning an annual profit once again and riding on the success of the iMac. The popular model, which featured a simple, colorful design aimed at the consumer and education markets, sold about 1.8 million units in the company's fiscal 1999, almost half of all Apple's unit sales. In the early 2010s, the company's other products included the Mac mini, MacBook, Mac Pro, and MacBook Pro, all of which ran Apple's OS X operating system. With the introduction of the iPod and iTunes, the company's sales jumped from about $6 billion in 2002 to almost $43 billion in 2009, at which time the firm employed about 36,800 workers.

Oracle Corp. of Redwood City, California, stepped into the computer business when it acquired former industry leader Sun Microsystems for an estimated $7.4 billion in 2010. Annual revenues for Oracle were $26.8 billion in 2009 with 105,000 employees. Sun had become the leader of the workstation industry segment only five years after the company was founded in 1982 and only six years after the first workstations appeared on the market. Sun also pioneered the open system, Unix-based workstation, as opposed to those that ran only proprietary software. Open standards allowed the sharing of software and hardware components among competing workstation manufacturers. Sun had also been a leader in developing computers based on the RISC microprocessor chip architecture. It developed its own improved version of RISC called SPARC (scalable performance architecture), and it licensed the technology to chip manufacturers. Sun's SPARCstation workstation computer, introduced first in 1989 and based on the SPARC technology, became the most popular workstation model.


The computer industry employs large numbers of electrical engineers, programmers, assemblers, and technicians. In fact, these occupations represent about 30 percent of the industry total. Companies also hire large numbers of people for miscellaneous management, sales, and clerical positions.

Despite the sharp uptrend in the industry's output, U.S. employment in computer manufacturing has been declining since its peak in 1984. Between 1984 and 1995, the computer manufacturing industry lost 32 percent of its workforce, an average annual rate of 3 percent. The computer industry is one of the more highly automated manufacturing industries, and many manual assembly jobs have been eliminated. Other manufacturing and assembly work has been relocated overseas.

According to the U.S. Census Bureau, computer manufacturing employed 92,600 workers in 2008, about 38 percent of whom were production workers who earned $20.31 an hour.

Given the ongoing pressure on computer makers' revenues and profits, companies were expected to continue to introduce labor-saving automation and to outsource manufacturing activities to low-cost foreign producers. Furthermore, corporate alliances will likely moderate the demand for research and development professionals. Also, while the demand for programmers in the industry was expected to rise slightly, the demand for other occupations, including engineers and technician and engineering management jobs, was expected to fall, according to the Bureau of Labor Statistics. Manufacturing jobs, especially, will disappear. Management executive positions were also expected to decrease, although the demand for systems analysts and computer scientists was predicted to increase.

America and the World

U.S. computer companies solidified their lead in the global computer industry in the 1990s, aided by aggressive marketing, a strong U.S. economy, and weakness in parts of Asia and Latin America. According to IDC, in the early 2000s, the four largest U.S.-owned computer makers--Dell, Compaq, Hewlett-Packard, and IBM--controlled almost 40 percent of world PC shipments.

Import value continued to exceed exports in the U.S. computer manufacturing industry in the late 2000s. According to the Supplier Relations US, the United States shipped $10.5 billion worth of computers to 207 countries in 2009. Imports from 108 countries, on the other hand, totaled $37.4 billion. Asia was the largest source of imports, with Japan, Singapore, Taiwan, China, and Malaysia as leading Asian sources, whereas Canada was the strongest export market. China was growing as an export market as well, as Dell expected to record $5 billion in sales from that country in 2010.

Research and Technology

The computer industry has historically benefited from considerable government funds in research and development. This was especially the case during the Cold War. In the 1990s, government funding of research in high technology industries declined, and, according to a study by the Institute for the Future, the industry's own investments in research were not as great to make up the difference. Furthermore, in the early and mid-1990s, computer companies actually decreased the percentage of their revenues that they invest in research and development (R&D). Computer companies still invested considerable resources in new product research and development, but this was mostly for the short term. Long-term basic research in entirely new technologies was not funded as well as it was in the past. Shorter product life cycles and a commoditization of the computer industry contributed to this trend.

In 2010, however, some noted a trend toward more R&D spending. IDC estimated global spending on technology would increase almost 4 percent to $1.5 trillion in 2010, after falling by 4.2 percent in 2009. However, the computer industry remained very technology-driven, and many of the technological innovations that impact the computer industry were being developed in other, related industries. These included faster and more powerful microprocessors developed by the semiconductor industry, the capacity for more memory storage developed by the computer storage device industry, the support of more detailed graphic and video developed by manufacturers of computer monitors and displays, faster communications capabilities between computers developed by the telecommunications equipment industry, and more robust operating systems and sophisticated applications developed by the computer software industry. A trend toward smaller, faster, cheaper machines with greater memory was expected to continue.

One continuing trend that is common among all these aspects of computers and related devices is miniaturization. Beginning with the invention of the microprocessor chip in 1971, and followed by the ability to store more data on smaller data storage media, the development of flat-panel displays, and computer system designs that better conserve space, computers have been getting smaller while retaining or increasing their processing power.

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Mena Report; September 10, 2017; 303 words
Electronic auction: supply of electronic computers and components for the needs of the administration of the ramenskoye municipal district The initial (maximum) contract price...
International Electronic Competition for the Supply of Electronic Computers and Scientific Equipment for the Educational Needs of Auth Stations (No. 397/2017)
Mena Report; August 26, 2017; 402 words
Contract notice: International Electronic Competition For The Supply Of Electronic Computers And Scientific Equipment For The Educational Needs Of Auth Stations (No. 397/2017). Total quantity or scope: supply constitutes...
Auction in Electronic Form for the Supply of Components and Consumables to Electronic Computers, Peripheral and Organizational Equipment
Mena Report; October 1, 2017; 311 words
Electronic auction: auction in electronic form for the supply of components and consumables to electronic computers, peripheral and organizational equipment The initial (maximum) contract price: 1698163.14 russian ruble Major organization...
On the Purchase of Personal Electronic Computers (Pc)
Mena Report; August 5, 2017; 293 words
Tenders are invited for On the purchase of personal electronic computers (PC) Eligibility Criteria : Participants are allowed in accordance with articles 14 and 16 of the Law of the Republic of Belarus...
Sector 5 Gets SEC Approval to Change Its SIC Code to Electronic Computers
Manufacturing Close-Up; September 12, 2016; 344 words
...change its Standard Industrial Classification (SIC) code from 2330 Woman's, Misses, and Juniors Outwear to Electronic Computers SIC Code 3571 effective immediately."Changing our SIC code emphasizes the change of Sector 5 to a consumer electronics...
Sector 5 Secures SEC Approval to Change Its SIC Code to Electronic Computers
Entertainment Close-up; September 16, 2016; 368 words
...change its Standard Industrial Classification (SIC) code from 2330 Woman's, Misses, and Juniors Outwear to Electronic Computers SIC Code 3571 effective immediately. "Changing our SIC code emphasizes the change of Sector 5 to a consumer electronics...

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