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How the 2 Largest US Computer Stores Started

Sep 13, 2008
Dell Computer Corporation and Hewlett-Packard are the 2 largest US computer stores. They both started with small capital investments and limited infrastructure. Through innovations and hard work, these companies earned millions of dollars, and continue to thrive in today's modern world.

Michael Dell, the founder of Dell Computer Corporation, is the longest-serving chief executive officer of Dell today. Dell started selling personal computers when he was a freshman at the University of Texas in Austin in the early 1980s. He bought wholesale parts and put them together as IBM computer clones. He also used the mail order market to reach his customers. Due to his success, he left school that same year and incorporated his business. This was how DELL Computer Corporation began.

Michael Dell believed in the direct selling strategy. He eliminated middle men who added to the cost of the machines. This direct selling model of Dell allows them to build their system, which includes selling via ordering privileges and giving customers powerful computer systems at competitive prices. In addition the company introduced the latest technology faster than other companies.

Through this strategy, Dell achieved millions of dollars from its sales margins after only 2 years. In 1987, Dell dominated the mail order market. Yet, it was clear to Dell that in order to continue growing, he had to expand beyond mail order. He knew that he needed a larger professional management staff in order to reach his goal. As early as 1986, the company engaged E. Lee Walker, a former investment banker, as its President.

Dell Computer Corporation continued to grow rapidly. It opened a London office that sold $4 million worth of computers in 1988 alone. The company also formed a subsidiary in Canada. In early 1988, it organized various divisions to raise the company's profile. In 1987, it reported a $159 million sale. It went public in June 1988 with 3.5 million shares.

In 2001, Dell Computer Corporation gained the leading share of the global PC market. In 2003, the company changed its name to Dell Inc. Thus, in 2004, Michael Dell announced that he will step down as CEO but will remain as Chairman. The corporation has continued to grow since then.

Hewlett-Packard

Hewlett-Packard, just like Dell Computer Corporation, has its rags to riches story. In 1934, Dave Packard and Bill Hewlett both graduated from Stanford University. It was during their post graduate stint at Stanford when they started HP in a small garage along Palo Alto.

Packard and Hewlett formally introduced their partnership in 1939. They started with an investment of US$538. Via toss coin, Dave won to use his name for the business, but he chose to name their electronics manufacturing enterprise as Hewlett-Packard (HP).

Their first successful product was a precision oscillator: the model 200A. Walt Disney was HP's earliest customers for oscillators, which it used it to improve surround sound systems for theaters in the movie Fantasia. The oscillators sold well for 33 years, and became the longest selling basic electronic design of all time.

HP lacked focus when it was beginning. It tried to create a wide range of electronic products for industry and agriculture. Later on, the company concentrated on production of high quality electronic test and measurement equipment.

HP is recognized as the symbolic founder of Silicon Valley. Hewlett-Packard's HP Associates division developed semi conductor devices which were used in calculators and other electronic instruments.

HP used Digital Equipment Corporation minicomputers along with its instruments. In 1966, HP entered the computer market with its HP2100/HP1000 series of minicomputers. These powerful models that lasted for a good twenty years were similar to the INTEL X86 architecture.

HP also introduced the HP2640 series of smart and intelligent terminals. These terminals form-based interfaces to ASCII terminals and screen labeled function keys. They are now commonly used on gas pumps and bank ATMs.
In 1968, HP created their 9100A and called it a desktop calculator. Bill Hewlett called it a calculator because it does not look like an IBM computer. It was a breakthrough in engineering at the time because the logic circuit was produced without any integrated circuits. CPUs were entirely executed in discrete components.

Wired Magazine acknowledged and publicized HP as the producer of the world's first personal computer. The company earned global respect because of the variety of its innovative products. These include:

* HP-35, the world's first handheld scientific calculator, introduced in 1972;
* HP-65, the first handheld programmable calculator was made in 1974;
* HP 41C the first programmable and expandable alphanumeric calculator, in 1979;
* HP 28C the first graphical symbolic calculator, was released the same year;
* In 1984, HP introduced both inkjet and laser printers for desktop PCs. HP also produced successful multi-function products, among which the most significant is the printer/scanner/copier/fax machine-in-one device.

In the 1990's, HP expanded their computer product line. They started to closely observe universities, research facilities, and enterprises for their computing needs.

The company changed its name to HP Home & Home Office Store in 2005. HP became one of the leading manufacturers of desktop and laptop computers as well as database servers for many different markets. The Palo Alto garage where the 2 young men started their business is now a historical California landmark.
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