Imports satisfy almost all Canadian demand for computers.
New York, NY (PRWEB) November 06, 2014
City: The Computer Manufacturing industry is quickly declining due to fierce international competition, which has flooded the domestic market with lower-cost imports. Because foreign competitors, most notably from East Asia and the United States, enjoy lower labour and production costs, they are able to produce computer products with lower price points. Competition, combined with product standardization, has exerted strong downward pressure on prices, lowering the industry's per-unit revenue. As manufacturers relocate abroad or shut down production, the industry's domestic presence has faded. In the five years to 2014, industry revenue is expected to decline significantly.
Trade trends reveal the underlying factors that have caused the industry's demise during the past five years. Although imports have grown only slightly during this time, they are expected to satisfy the vast majority of domestic demand in 2014. According to IBISWorld Industry Analyst Darryle Ulama, “This indicates that downstream customer groups, including consumers and business clients, are opting to bypass industry operators in favour of often lower-cost imports for their computer needs.” Meanwhile, exports are expected to decline in the five years to 2014, as manufacturers lose out to more competitive international manufacturers. Consequently, industry revenue is projected to decline in 2014. Computer manufacturers are expected to face similar trends going forward. “Price competition will prevent manufacturers from commanding higher margins and achieving growth, and will simultaneously encourage operators to relocate abroad to cut costs,” says Ulama. “Meanwhile, competition from tablet devices will threaten computer sales, exacerbating the industry's decline.” In the five years to 2019, revenue is expected to slide, though layoffs and slim manufacturing will sustain profit margins.
Market share concentration is characteristically low in the industry, with no one operator claiming a significant portion of industry revenue. Some operators act as manufacturers, retailers as well as IT service providers, although their manufacturing segment is usually slim. Like much of Canada's information and communication technology operators, a majority of industry manufacturers are small to midsized enterprises that do not command a large share of industry revenue.
For more information, visit IBISWorld’s Computer Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures or assembles personal computers (PCs), laptops and servers. Operators typically purchase computer components (e.g. motherboards and graphics cards) from dedicated manufacturers in other industries (IBISWorld report 33441a). This industry does not include tablet computers, nor does it include manufacturers of computer monitors, mice, keyboards and printers (IBISWorld report 33411b).
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