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Competition in Computers among Companies (2)

company competition

The shift from mainframes to PCs was so dramatic that IBM’s stock plummeted from a high of more than $180 in the late 1980s to as low as $43 in 1993, and DEC’s stock price dropped from more than $190 in 1987 to less than $40. In 1993, IBM reported losses of $7.5 billion, the second highest loss ever reported by a corporation.

Contrasting with IBM’s declining value was the growth of Intel and Microsoft, whose stock prices soared in the same period. By 1995 Microsoft and Intel each had a greater market valuation than IBM, even though the two companies’ combined revenues were less than half of IBM’s.

Other big losers included centralized computing stalwarts DEC, Data General, and Amdahl, while big winners included PC-related companies such as Compaq, Dell, Adobe, Novell, and Lotus. Most symbolic of these changing fortunes, Compaq bought DEC in 1998.

Among non-U.S. companies, some of the biggest success stories of the PC era were Japan’s NEC and Toshiba; Taiwan’s Acer, Mitac and FIC; and Singapore’s Creative Technology. Losers included Japan’s Fujitsu and Hitachi, and European companies such as ICL, Siemens, and Groupe Bull.

Company competitiveness can be measured in a number of ways, such as profitability, creation of shareholder wealth, growth, market share, and technology leadership. Each of these is important, but technology leadership and growth are critical in the computer industry.

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