Word: pc
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...price war, though, is only a symptom of more fundamental transformation taking place in the industry, not all of which will be to the advantage of the U.S. As the PC has changed from a magic black box to a run-of-the-mill commodity like a television set or a radio, so has the economics of the business. Since there is no mystery to the technology, PCs can be manufactured as well as priced like any other commodity. That fact has helped make computers a more global business, but it has also played into the hands of copycat...
...price war may have strengthened U.S. computer leadership in some key markets. American firms, which feared a takeover by Japanese firms during the 1980s, have exported their cutthroat pricing to Tokyo with stunning success. Led by IBM, Dell and Compaq, U.S. companies sent shock waves through the Japanese PC establishment by trimming prices up to 30%. While Japanese domestic manufacturers, such as Fujitsu and NEC, have responded with deep discounts of their own, they have been unable to shake off the Americans, much to the delight of Japanese consumers...
Still, more victims than victors are expected as falling prices and changing economics force many U.S. PC makers to re-evaluate the market. To compete in the future, say analysts, PC makers must bring unique products to market in order to stand out from the pack. As a result, many companies are placing big bets on such emerging technologies as pen-based computing, hand-held PCs and multimedia. Says John McCarthy, director of technology at Forrester Research: "If you're just a boxmaker, with nothing else to offer, your days may be numbered...
...strategy is both to outpace the competition with unique products such as the ThinkPad notebook PC, and to beat them at their game of discounting. The company has filled practically every market channel with a new line of PCs, including models aimed at homes and small businesses. Next month Big Blue will introduce a bargain-basement line called Ambra that will not carry the IBM logo. The overall strategy has apparently worked. After losing $2 billion in the past two years, IBM's PC business is expected to report a small profit this week. "We're here to stay," says...
BUSINESS: The PC Industry Short-Circuits...