Dangerous times for American PC companies

Jan 29, 2013

Will we ever see a day when personal computers are no longer made in the United States?

It may seem unthinkable in the land that gave birth to Apple, Dell, Hewlett-Packard and IBM, but Strategic News Service publisher Mark Anderson is seeing cause for alarm. He explains the situation to KPLU’s Dave Meyer on this month’s edition of The Digital Future.

Historically, Mark says you could draw a correlation between a computer company’s balance sheet and its inventiveness.

Apple, for instance, has always sold its computers at a premium price, and has long been renowned for the quality and innovation of its products.

Dell and HP used to have high margins, but are now struggling. They’re competing with foreign computer companies that are willing to live with very low margins in order to gain market share.

Bringing margins down to compete with foreign companies means lower profits and, in turn, falling stock prices.

IBM, perhaps seeing the handwriting on the wall, sold its PC business to China-based Lenovo in 2004.

HP recently considered getting out of the PC business. But it changed its mind.

Dell appears likely to become a private company again in order to better compete.

Will the US computer industry fall to foreign rivals?

Apple, under Steve Jobs, turned out creative new products. Mark says it was an example of the gazelle staying ahead of the lion. But the gazelle can run out of steam, and that happens when the creativity stops.

According to Mark, focusing on creativity and invention is the key to keeping our PC gazelles out of the jaws of low-margin lions.