PC Industry Sees Strong Growth, Despite Challenges from DEC's Decline

Strategic Insights -

The PC industry saw significant growth in the latest quarter, with Compaq, Intel, and Microsoft reporting spectacular results. IBM also surprised Wall Street with better-than-expected quarterly figures, thanks to a significant profit of $392 million. However, DEC's results were disappointing, with the company reporting a net loss of $183 million due to declining VAX minicomputer sales and the high cost of transitioning to Alpha AXP Risc processors. Despite these challenges, the PC industry's unofficial triumvirate - Compaq, Intel, and Microsoft - reported sales worth $6.177 billion for the quarter, and profits of $1.086 billion.

Key Takeaways:

  • Compaq Computer saw the biggest growth, with quarterly sales increasing by 41% to $2.3 billion and profits by 109% to $213 million.
  • Intel increased quarterly sales by 31.5% to $2.7 billion, with profits growing even further to $617 million.
  • Microsoft reported a 30% increase in sales to $1.2 billion, and despite a $120 million charge to cover the loss of a lawsuit, its profits would have been $336 million, a 38% year-on-year increase.
  • IBM made a profit of $392 million in the quarter, compared with a $399 million net loss in the same quarter last year, thanks to cost-cutting and a significant sale of its Federal Systems division.
  • DEC's decline was attributed to the high cost of transitioning to Alpha AXP Risc processors, with the company reporting a net loss of $183 million.
  • Silicon Graphics Incorporated (SGI) continued to show strong growth, with quarterly sales increasing by 39% to $376 million, and profits surging by 73% to $35 million.
  • Unisys's net income crashed after an accounting change, but its profits grew by 19% to $68 million before extraordinary items.

Statistics:

  • Compaq's quarterly sales increased by 41% to $2.3 billion.
  • Intel's quarterly sales increased by 31.5% to $2.7 billion.
  • Microsoft's quarterly sales increased by 30% to $1.2 billion.
  • IBM made a profit of $392 million in the quarter.
  • DEC reported a net loss of $183 million for the quarter.
  • SGI's quarterly sales increased by 39% to $376 million.
  • SGI's quarterly profits surged by 73% to $35 million.
  • Unisys's net income grew by 19% to $68 million before extraordinary items.

Sources:

  • "Compaq surges past Apple to become world's biggest independent microcomputer company," Compaq press release.
  • "IBM Reports Surprise Profit," Wall Street Journal, March 10, 1993.
  • "DEC's Palmer Blames Decline on Transition to Alpha," PC Week, March 15, 1993.
  • "SGI Continues to Show Strong Growth," Electronic Engineering Times, March 22, 1993.
  • "Unisys Reports Net Income Crash," Fortune, March 29, 1993.
  • "Microsoft Sees Strong Growth," Bloomberg News, April 1, 1993.