Computer equipment manufacturers are warning that the demand for computer hardware generated by computer makers has become saturated, while computer equipment generators (CGEs) are warning the market will not recover without the growth of new, high-volume, high cost-capable software and services.
The CGEs say the current crop of software and service offerings, which includes some of the most popular products on the market, has failed to address a critical gap in the marketplace.
“The market has become so saturated with products and services, you can’t grow a business on your own,” said Michael R. Fassbender, chairman and CEO of the American Institute of Certified Computer Scientists.
“We’ve created an environment that makes it impossible to grow your business.”
The industry is struggling to find ways to create value for its members, Fassender said.
“The most common answer we get is, ‘We don’t know how to grow our business,'” he said.
“It’s the same thing with software: If you have a software product that doesn’t deliver the promised benefits, how do you grow your software business?
How do you build your business?”
The question is no longer a hypothetical one.
Fassbender’s group has a growing number of CGE groups, which include a number of large companies, he said, including Intel Corp., Motorola Solutions Inc., Microsoft Corp. and IBM.
CGE groups have seen their stock prices rise and their sales and profits grow in recent years, he noted.
The CGE industry was one of the first to see the growth in the popularity of personal computers and tablets, and the industry has seen a surge in the number of software offerings.
In 2010, a CGE was listed on the Nasdaq Stock Market.
In the year since, it has climbed more than 10,000%.
The rapid growth of the CGE market has been driven by companies looking to capitalize on the rapid growth in demand for PC and mobile computing.
One of the reasons that CGE sales have been so strong is that, as the technology has evolved, so have the demand and prices, said Doug Eichelberger, president and chief operating officer of the Consumer Electronics Association, the industry’s trade group.
This is what’s causing demand to grow, he added.
Last year, the average selling price for PCs in the U.S. was $4,200, up from $2,300 in 2006.
Eichelberg noted that sales of tablet computers are up almost 10 percent this year compared with last year.
Meanwhile, the number, size and type of PCs being sold have also grown in recent months, he continued.
For instance, last year, PC sales grew by nearly 13 percent, while tablet sales rose nearly 7 percent.
More people are using tablets than PCs for many purposes, including gaming, entertainment and banking, said Matt Balsamo, an analyst with research firm IBISWorld.
But even with the growth, the demand has not been sufficient to grow the PC and tablet market, he argued.
While the CCEs’ warning that demand for CGE products has not grown enough is not new, it is important to understand the current state of the market and the future of the industry, Balsamos said.
“The demand for the products is there,” he said in an interview.
“There is no way for an CGE to create that demand.
They’ve created a situation where the supply of the product is low.
And that means that there’s no growth in CGE demand.”
Fasbender said he believes the current glut in software and CGE offerings is caused by the high cost of the technologies.
He pointed to the software companies that are using software as an example.
“[Microsoft’s] Skype is an application that is going to be a great tool for many applications.
But it’s going to cost $200, and you can get that application for $100 on the Web.
So it’s not that big of a deal,” he told Medical News Now.
There are many more applications that are going to run on the device that will cost less than $100 and you’re going to get the same results.
However, there are software companies, especially large ones, who have the ability to use software and have a big financial interest in keeping the price high.
So, if they can increase the cost of an application, they will.
That’s what’s driving the CPEs’ warnings.
Fascbender said the CMEs have been telling their members that they need to be prepared to grow their sales.
It’s a problem that we have had for a long time, and we’ve got to find a way to fix it, he told MedNanet.
Some of the companies that we work with are saying, “We are not growing enough, we need to