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The article focuses on the U.S. computer industry companies Dell and Hewlett-Packard. The companies' efforts to adjust to the declining use of microcomputers by businesses and consumers due to the introduction of technological innovations such as tablet computers and cloud computing are discussed. The idea of "verticalization" within high technology industries, where companies produce and market hardware, computer operating systems and computer software rather than specialize, is considered.

This article reports on the business problems experienced by Dell Computer Corporation. The largest computer maker in the world, Dell suffered declines in its stock prices, lost market share and had its growth rate fall in 2005-06. Low computer prices, the resurgence of rival computer makers and changes in the computer market played a part in the decline of the company.

Focuses on the market trends in the personal computer (PC) industry in the U.S. Rise in the share price and profits of Dell Computer Corp. by 250% and 60% respectively; Adoption of direct sale strategy by Dell for selling its computers; Use of direct sales strategy by Dell to gauge trends in demand in the computer industry; Impact of the fall in the price of memory chips, which make up about 20% of the cost of a PC, on the sale of Dell's PC; Focus set on consumers by Gateway 2000 Inc., Dell's biggest competitor.