2.4: Computers are part of life

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The Commoditization of the Personal Computer

Over the past forty years, as the personal computer has gone from technical marvel to part of everyday life, it has also become a commodity. There is very little differentiation between computer models and manufacturers, and the primary factor that controls their sale is their price. Hundreds of manufacturers all over the world now create parts for personal computers which are purchased and assembled. As commodities, there are essentially little or no differences between computers made by these different companies. Profit margins for personal computers are minimal, leading hardware developers to find the lowest-cost manufacturing methods.

There is one brand of computer for which this is not the case – Apple. Because Apple does not make computers that run on the same open standards as other manufacturers, they can design and manufacture a unique product that no one can easily copy. By creating what many consider to be a superior product, Apple can charge more for their computers than other manufacturers. Just as with the iPad and iPhone, Apple has chosen a strategy of differentiation, an attempt to avoid commoditization.