PC- The Economic Indicator

The Information Technology industry is unlike any other

. No matter the product or service a company provides, the infrastructure of any successful 21st Century business is dependent upon IT support. It is impossible to do the most basic business functions in its absence.

For this reason we can look at the purchase patterns of products to determine the welfare of the economy. Relatively few computers were purchased in late 2008 and 2009; consistent with the bear market, but here is the good news. The Interactive Data Corp (IDC) reports an upswing of computer purchases starting in the fourth quarter of 2009 which continued strong through the first quarter of 2010. Because quarter four spend is largely driven by consumers, a season decline into quarter one is expected; but was not the case this year. Some experts believe this is yet another sign that we are headed towards economic recovery.

Small businesses (defined as companies with less than 500 employees) account for a significant percentage of computer purchases making this is an important group to monitor. In 2008, there were 29.6 million businesses in the United States, according to Office of Advocacy estimates. Small business represents 99.7% of all employer firms. They pay 44% of the total US private payroll and employ over half of all private sector employees (U.S. Small Business Association numbers from 2009).

Small businesses are likely to purchase Windows 7 and upgrade equipment/software before their larger firm counterparts. Commercial customers who include both small businesses and large enterprises are ready to spend on new computers for employees after several quarters of dormancy.

Looking at the broader spectrum, to include more than just traditional desktop and laptop computers, sales are also trending upwards. Early sales of the Apple iPad (devices starting at $500) were in excess of 500,000 touch screen tablets. Smart phone manufacturers, particularly Apple and RIM, enjoyed an increase in sales at the end of 2009.

79.9 million PCs shipped during the first quarter of 2010. These are the top vendors worldwide with the percent of market share reported by IDC.

1. 1. Hewlett-Packard - 19.7%

2. 2. Acer - 13.6%

3. 3. Dell - 13.3%

4. 4. Lenovo - 8.8%

5. 5. Toshiba - 5.8%

In the U.S. alone 17.5 million PCs were shipped in the first quarter. These are the top domestic vendors with the percent of market share reported by IDC.

1. 1. Hewlett-Packard - 25.4%

2. 2. Dell - 24.1%

3. 3. Acer - 13.1%

4. 4. Toshiba - 8.6%

5. 5. Apple - 6.4%

Purchasing, upgrading and maintaining equipment is an ongoing task that will ultimately contribute, positively or negatively, to the bottom line of any business.

The best products and the optimum times to buy are different for each company. Recent IT purchasing trends suggest a comeback for both the economy and the computer and IT industry as a whole, but each small business has its own cycle and stages and purchasing decisions are made from these factors. It is best to find the right mix of IT products that will work for your business.

PC- The Economic Indicator

By: Alex Famili

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