The Laptop Industry

By: Orlando Acosta

Date: April 29, 2023
University of Arizona
BCOM 214

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Table of Contents
Table of Figures ............................................................................................................................... 1
Competitive Landscape ................................................................................................................... 2
Major Players .............................................................................................................................. 2
Cost Structure Benchmarks ........................................................................................................ 2
Trends ............................................................................................................................................. 3
New Technological Innovations .................................................................................................. 3
Laptops in the Workplace ........................................................................................................... 4
Future Outlook ................................................................................................................................ 5
Revenue Forecast........................................................................................................................ 5
Conclusion ....................................................................................................................................... 5
References: ..................................................................................................................................... 6

Table of Figures
Figure 1 - Cost Structure of the Laptop Industry (IBIS World) ........................................................ 3
Figure 2 - Working Remotely (Buffer) ............................................................................................. 4
Figure 3 - Expected Revenue Growth (Statista) .............................................................................. 5

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This document provides an in-depth analysis of the laptop industry. By reading this document
investors will acquire the knowledge necessary to determine whether the laptop industry is a
good investment choice. Specially, this report details competitive landscape, trends, and the
future outlook of the industry.

Competitive Landscape
Major Players
The laptop industry is a gigantic global industry that allows companies from all over the world to
participate in. There are well over 60 different laptop brands that can be found in the industry but
there are three specific companies that deviate from the rest. The top three companies based off
total 2023 PC shipments include Lenovo, HP, and Dell (Alsop, 2023a). Each of these brands
have unique features that allow them to rise above other players in the industry.

Lenovo is one of the pioneers in the laptop industries, first beginning to produce laptops in the
1980s. Lenovo’s long reliable history has gone a long way for the company as consumers
developed brand loyalty. Lenovo produces many types of laptops, but it is their business class
laptop that is frequently ranking on the top of people’s list (Global Brands, 2023). What makes
Lenovo’s laptops stand out is their durable hardware, flexible design, and excellent customer
service system.

HP is also one of the earlier laptops to be created and has thus attracted customers based off their
history alone. What makes HP one of the best laptops on the market is their range of creativity.
HP designs laptops that are fan less, detachable 2-in-1s, notebook like, and applicable for
gaming. One of the latest displays of creativity by HP was creating the world thinnest laptop
(Global Brands, 2023). HP also offers a three-year warranty on standard laptops, which is
something you do not see often.

Dell is a very versatile brand that creates laptops for gamers, college students, and just for casual
everyday life. Their specialty comes from the functionality of their laptops. Dell laptops have,
“…Touchscreens, backlit keyboards, powerful processors and long-lasting batteries.” (Global
Brands, 2023). With all of the technological features that Dell offers their laptops still come out
to fair affordable prices.

Cost Structure Benchmarks

When looking to invest in the laptop industry it is important to recognize the cost structure of
the industry. Knowing where a company is allocating its money is important information for
investors. This knowledge is useful as the investor is alerted if a potential cost sector is going to
increase, lowering profit for a company. Figure one provides a visual representation of the
laptop industry’s cost structure.

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Figure 1 - Cost Structure of the Laptop Industry (IBIS World)

Figure 1 displays that the three biggest costs for the laptop industry are purchases at 72.5%,
wages at 17.1%, and depreciation at 2.7%. The purchases are the, “…finished (laptop) parts
provided by semiconductor suppliers” (Berdousis, 2023). When laptop prices are sold at higher
prices is often the result of purchasing higher quality materials or a rise in the current cost of
materials because of material shortages.

Wages are the next biggest cost in this industry. Manual labor is a necessity for assembling
laptops. In 2018, wage expenses were only responsible for 13.6% of costs but that number rose
to 17.1% in 2023 (Berdousis, 2023). Wages are only going to increase in the future so these
costs will continue to rise in the industry. Companies with lower wage costs could be safer
options to invest in when investigating the industry.

Depreciation is the third biggest cost for a company in the laptop business. Each year as a
laptop ages, it’s functionally decreases, and newer laptops diminish the laptop’s value.
Assuming that a laptop’s useful life is only three years, this can be tough on companies that are
unable to sell all of their units. Companies with lots of unsold laptops lose revenue as they
cannot sell the laptop for the same price the year that the laptop was made due to
depreciation.

Trends
New Technological Innovations
The laptop industry can be viewed as very successful today and that will only continue to grow
with new technological innovations being created. Some of the most anticipated innovations
making their way to the laptop industry include 5G data and augmented reality (AR). These
innovations will make laptops more accessible and will enable users to spend more time on
their laptops which could result in more customers and thus more profit.
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5G data can be found in any new smartphone which is big reason why smartphones are as
valuable as they are. Once more laptops incorporate 5G data into the device it will “…enhance
things like live long-distance collaboration [and will provide] immediate access to cloud
storage” (Lopez, 2020). In places where the is no Wi-Fi connection being able to work online
autonomously and with team members is essential. 5G data will make that possible and will
only make laptops more valuable.

Augmented reality (AR) is a digital feature that allows users to combine digital information with
the world surrounding them. Users would be able to try on clothes from their favorite stores
without actually physically wearing it or see what furniture would look like in their house before
they purchase it. AR can be downloaded on the computer and will be accessed by a webcam or
anaglyph glasses (Kolo, 2021). Consumers will no longer have to make unwanted purchases and
get to experience a whole different world; this will increase profitability for the laptop industry.

Laptops in the Workplace

In April 2020 the COVID-19 pandemic took the world by storm when it forced countries to go
into a lockdown. Workers were no longer reporting to in-person work but instead were working
from home. One global survey revealed that 88% of respondents were working from home in
2020 and in 2021 were still required/encouraged to work asynchronously (Klerk et al., 2021).
The laptop industry has benefited from the shift to online work and will continue to benefit
from it as workers have taken a liking to working asynchronously. Figure two provides a
visualization of workers’ desire to remain online.

Figure 2 -Working Remotely (Buffer)

Figure two was a survey with over 2,000 respondents conducted by Buffer, Inc. The two major
takeaways from the survey include: 97.6% of respondents wanting to work remotely as least
some time in their career and 97% of respondents would recommend working remotely to
others. Future companies have an obligation to satisfy their employees and if their employees
want to work remotely it will be done in some capacity. What this means for the laptop

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industry is more sales as employees are going to have to complete complex work online on
suitable formats.

Future Outlook
Revenue Forecast
Currently the laptop industry is in a good place financially earning 121 billion dollars in revenue
in 2022 (Statista, 2023). As new innovations and more retail stores open up from COVID-19 this
number is only going to increase in the future. One field in the laptop industry that is expected
to take a leap is the laptop gaming market. In 2022 The laptop gaming market was valued at
almost 12 billion dollars and by 2032 the number is projected to increase to 18 billion (Alsop,
2023b). This new generation is more attached to the internet than ever before so we can
expect more jobs in the gaming market and other online markets in the future. Figure three
illustrates projected revenue growth till the year 2023.

Figure 3 - Expected Revenue Growth (Statista)

As we can see from figure three, worldwide revenue in the laptop industry is expected to
increase every year starting in 2022. The gaming industry is a big part of this growth but
another reason why revenue will increase in the future is civilizations advancing. Some parts of
the world do not have the necessary infrastructure to support Wi-fi, making laptops impractical.
As these civilizations continue to grow economically laptops sales will begin to increase.

Conclusion
This report provided vital information on the competitive landscape, trends, and the future
outlook of the laptop industry to help inform investors if this is a safe investing opportunity. One
key takeaway from this report is recognizing the three key players in the industry which are:
Lenovo, HP, and Dell. Other takeaways included knowing that purchases are a very large cost
for manufacturers and that revenue is expected to increase in the future due to technological
innovations and the growth of the laptop gaming market. If you need any additional information
on the industry, please contact Orlando Acosta at Orlandoa20@arizona.edu.

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References:
Alsop, T. (2022, August 22). Global Gaming Laptop Market Size 2022-2032. Statista. Retrieved
May 7, 2023, from https://www.statista.com/statistics/1027216/global-gaming-laptop-
sales/#:~:text=In%202022%2C%20the%20global%20gaming,percent%20between%20202
2%20and%202032.

Alsop, T. (2023, January 20). PC Vendor Market Share Worldwide 2022. Statista. Retrieved
May 7, 2023, from https://www.statista.com/statistics/267018/global-market-share-held-
by-pc-vendors/.

Berdousis, D. (2023, January 12). Computer Manufacturing in the US. IBISWorld. Retrieved
May 5, 2023, from https://my-ibisworld-
com.ezproxy4.library.arizona.edu/us/en/industry/33411a/competitive-landscape.

De Klerk, J. J., Joubert, M., & Mosca, H. F. (2021, June 21). Is Working from Home the New
Workplace Panacea? Lessons From the Covid-19 Pandemic for the Future World of Work.
SA Journal of Industrial Psychology. Retrieved May 7, 2023, from
http://www.scielo.org.za/scielo.php?script=sci_arttext&pid=S2071-07632021000100029.

Kolo, K. (2021, January 27). What is Desktop AR and why is it so Cool! Check Out Perception's
Solution! VR/AR Association - The VRARA. Retrieved May 7, 2023, from
https://www.thevrara.com/blog2/2021/1/27/what-is-desktop-ar-and-why-is-it-so-
cool#:~:text=Desktop%20AR%20is%20a%20technology,to%20the%20user's%20viewing
%20positions.

Laptops - Worldwide. (n.d.). Retrieved May 07, 2023, from https://www-statista-

com.ezproxy3.library.arizona.edu/outlook/cmo/consumer-
electronics/computing/laptops/worldwide.

Lopez, N. (2020, January 3). 5 Ways Laptops Should Evolve Over the Next Decade. TNW |
Plugged. Retrieved May 7, 2023, from https://thenextweb.com/news/5-ways-laptops-
should-evolve-over-the-next-decade.

State of Remote Work 2021. Buffer. (2021, September 10). Retrieved May 7, 2023, from
https://buffer.com/state-of-remote-work/2021.

Top Laptop Brands in the World. Global Brands Magazine. (2023, April 6). Retrieved May 7,
2023, from https://www.globalbrandsmagazine.com/top-laptop-brands-in-the-world/.

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