Industry Hegemony and Company Product Development Performance in the Personal Computer Industry

Abstract

Time-based competition in the personal computer (PC) industry has developed in a dramatic way. It is no longer enough to shorten the period from product inception to market presentation for new products. PC manufacturers have to be among the first to bring new computers using the latest logic chips onto the market. They can recover development costs only in the first three to four months after introducing a new generation of microprocessors, because as soon as cut-price competitors launch their PCs, market prices drop dramatically and profit margins on PCs dwindle everywhere. Since the product life-cycle is only six to eight months, there is scarcely time for the amortization of development costs.