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Stock Analysts on PC Industry in 2013 Print
January 2013

We are aware that the PC industry has been under restructuring for a few years and business in this industry will not be as usual in 2013.  The horizontally layered industry structure has gradually lost favour to tight vertical integration as far as consumer PC products are concerned.  Top and large vendors are not sheathed from the impact of industry changes and many of them have sunk multi billions of investments in acquiring companies that may give them a second spring.  Who have succeeded and who have not?  We do not know the answer yet but the stock market has reflected badly on companies that have a majority stake in the traditional PC industry.  This article contains some info that is indicative of the state of the PC industry and is a good read.

Traders in stock can change their bets easily but operators of business do not have the same luxury without going through a huge learning curve.  Can a dentist change to be a colon surgeon?  Can a mechanical engineer change to become an electronic circuit designer?  The degree of difficulty in change increases with specialisation, and yet it is specialisation that differentiates.   This is the sort of lovely dilemma we face everyday.

Most if not all our peers are positioned as system integrators or site service providers for customers.   The challenge to peers is to know which technology or supplier to believe for the foreseeable future.  Cloud computing and BYOD (bring your own device) are two in vogue.  A possible scenario is “one thousand tiny margins” as expressed by Hamish in our last Tech Briefing seminar.  Do we have other options?

The last Tech Briefing seminar has included a session on “Two Oceans of Digital IT”.  See this summary:  The Internet onto which cloud computing and BYOD attach is becoming a consumer network. There are many other networks that are not consumer oriented but producer based.  One such producer network can be bigger than the consumer Internet.  Would those producer spaces offer opportunities to us?  Peers can stay in the existing position of site system integrators for customers but may like to find out if there is gold in producer spaces.  Be cautioned that producer spaces are not as easily reached as consumer spaces.

Compucon has invested and taken actions to diversify into 3 different areas of related technologies.  The core competence of the team has been in designing and building reliable desktop and server computers.  Now we are developing new expertise in big data systems, parallel computing systems, and computer vision systems.  Most of the technology involved would be more suited to producers, infrastructure builders, and MLB (medium to large businesses) than consumers and SMB (small to medium businesses).  Development progress is on schedule and the response has been favourable to date and in fact encouraging.  Two universities have talked to us about our parallel computing industry knowledge.  Large data system business is a step ahead and the market has rewarded us handsomely last year.  We will continue to work on the same agenda in 2013. 

Feel free to contact us for a discussion of your situation as desired.