The computer industry is capital intensive and technologically driven and can be divided into three main segments; the supercomputer, mainframe, and personal computer. There have been several factors that have impacted the computer industry, but none like the Internet. The Internet has helped to develop the growth in the PC segment, which is currently the most popular mechanism for gaining access to the Internet. As we enter the paperless age, people now do their banking, payment of bills, shopping, and communicating via email and video conferencing which is all done through their PCs. This new technology shifted the demand for PCs to the right as people wanted access to the new superhighway. Although the new demand increased revenue for several of the companies in the industry, it also attracted new entrants, which in turn lowered PC prices and began a decrease in economic profits. This, in turn, led many computer manufacturers to look for less expensive parts, which drove many of the component suppliers to move their manufacturing operations overseas in search of a cheaper labor force.
             The server segment, once a high margin market, is also becoming more competitive as new companies enter it to offset the price declines in the PC segment. The barriers to entering the computer industry can be extensive, from capital and technologically intensive, to governmental regulations and trade treaties, and the lack of intellectual property protection (patent infringement).
             The computer industry is price elastic and affected by world economies. New technologies are also beginning to compete with the computer industry, thus shifting the demand curves for computers to the left. With this, we believe the future of the computer industry will lie within the microchip sector. Currently microchips are used, not only in computers, cell phones, and other gadgets, but also the medical field. The health industry is using microchip techn...