While Apple pioneered the first usable $$personal$$ computing devices, it was IBM that brought PCs into the mainstream in the $1980$s$.$ By the early $1990$s$,$ a new standard known as $$Wintel$($the Windows OS combined with an Intel processor$)$ dominated the industry. Thousands of manufacturers$$ranging from Dell Computer to no$-$name clone makers$$built PCs around standard building blocks from Microsoft and Intel. Growth was driven by lower prices and expanding capabilities. The overall industry continued to boom through the early $2000$s$,$ propelled by Internet demand and emerging markets such as China. But PC shipments hit a high$-$water mark in $2011$ of $352$ million shipments worldwide$\mathrm{.}12$ In $2018$ and $2019,$ roughly $260$ million PCs were shipped, and Gartner predicted the decline would only continue, forecasting $241$ million shipments in $2022\mathrm{.}13$ Average selling prices $($ASPs$)$ were also on the decline: although new PCs were faster and had more memory and storage, ASPs fell by a compound annual rate of $8\%10\%$ per year from the early $1990$s through $2005\mathrm{.}14$ Over the next decade or so$,$ prices finally stabilized: in $2019,$ ASPs were $$632$ dollars, up $$17$ from $2010\mathrm{.}15$ Buyers and Distribution PC buyers fell into five categories: home, small and medium$-$sized business $($SMB$),$ corporate, education, and government. Home consumers represented the biggest segment, accounting for nearly half of worldwide PC shipments$\mathrm{.}16$ While all buyers cared deeply about price, home consumers also valued design, mobility, and wireless connectivity; business consumers balanced price with service and support; and education buyers depended on software availability. SMB customers typically purchased PCs through superstores $($Walmart$,$ Costco$),$ electronics retailers $($Best Buy$),$ and web$-$based retailers. At the same time, the so$-$called $$white$-$box$$ channel$$which featured generic machines assembled by local entrepreneurs$$represented a large channel for PC sales, especially in emerging markets. White$-$box PCs were $40\%$ of the desktop channel in $2017,$ and $15\%$ of the overall PC market$\mathrm{.}17$ PC Manufacturers The PC industry had grown more concentrated in recent years, with the three top PC vendors$$ Lenovo, Hewlett$-$Packard, and Dell$$accounting for $65\mathrm{.}4\%$ of worldwide shipments in $2019,$ up from $51\%$ five years earlier $($see Exhibit $3$b for PC manufacturers$$ market shares$).$ Industry leadership had shifted numerous times in the prior three decades. China$-$based Lenovo vaulted into the front ranks of PC vendors in $2005$ when it acquired IBM$$s money$-$losing PC business for $$1\mathrm{.}75$ billion. Lenovo supplanted Hewlett$-$Packard $($HP$)$ as the market leader in early $2014$ but ceded the top spot to HP in late $2017,$ only to take it back again in $2019$ with a $24\mathrm{.}3\%$ market share$\mathrm{.}18$ Lenovo$$s greatest strength was its dominant position in China, the largest PC market in the world since $2012.19$ Following a rough period after the acquisition of Compaq in $2002,$ HP outsourced most of its production to Asia and dramatically lowered its costs. But HP$$s attempt to maintain PC leadership came at a high price: after $2005,$ HP market share eroded, margins declined, and the board fired three CEOs$\mathrm{.}20$ HP proposed spinning off PCs in $2011,$ recanted, then decided again to break up the company For the exclusive use of A$.$ Gonella, $2024.$ This document is authorized for use only by Anthony Gonella in MGM $399-$ Spring $2024$ taught by SHAWN RILEY, Kutztown University from Jan $2024$ to Jul $2024.$ Apple Inc. in $2020720-4545$ in $2015,$ splitting its PC and printer business off from its data centers, software, and services business$\mathrm{.}21$ HP steadily gained share after $2015,$ retaking the top spot in $2017$ with a $22\mathrm{.}7\%$ share$\mathrm{.}22$ In $2019$ it fell to second, despite raising its share to $23\mathrm{.}6\%\mathrm{.}23$ Dell held the third$-$largest market share, with $17\mathrm{.}5\%$ of PC shipments for $2019\mathrm{.}24$ Its distinct combination of direct sales and build$-$to$-$order manufacturing were popular in the corporate market for a decade. But Dell was late to catch on to a boom in the consumer retail market and struggled with cost controls and poor margins. Faced with a declining share price and investor discontent, founder Michael Dell took the company private with a $$25$ billion deal completed in late $2013.25$ After going private, Dell retained third place in the PC market, growing its share from $12\mathrm{.}0\%$ in $2013.$ In $2016,$ Dell acquired EMC, the largest maker of data storage, in a deal valued at $$67$ billion$\mathrm{.}26$ With a strong new focus on enterprise software and hardware, as well as cloud storage, Dell went public again at the end of $2018$ and had a $$38$ billion market capitalization in early $2020.$ Suppliers, Complements, and Substitutes Suppliers to the PC industry fell into two categories: those that made products $($such as memory chips, disk drives, and keyboards$)$ with many sources, and those that made products $($notably microprocessors and operating systems$)$ that had just a few sources. Products in the first category were widely available at highly competitive prices. Products in the second catego