The computer industry is still experiencing a great deal of price pressure as a result of overcapacity and competition. This may continue throughout the year 2003 because consumers are not upgrading as quickly as they did once before. Another reason is the popularity of the internet. Many people have computers in their homes that can easily take advantage of all the internet has to offer without going through the expense of upgrading again.
Many consumers even have second pc's in their households because of the continued low prices.
Despite the efficiency of Dell computer, their profits have fallen with the industry as a result of entering the low-end consumer pc market where price competiton is brutal. The industry is becoming highly concentrated among just a few large computer manufacturers. In 1997, worldwide computer equipment industry shipments rose 16 percent. The strongest growth continued to come from the United States which surged approximately 21 percent, according to Dataquest. Before 1997, personal computers had a market penetration in U.S. households of 35 percent.