The top companies in the hardware industry - a new list

Hardware is big business; all of the companies in the Hardware Top 100 post revenues higher than 1 billion USD. The Hardware Top 100 is an overview of the world’s largest makers of computer- and communications hardware, published by the Top 100 Research Foundation.
The largest companies in the list are computer- and printer-giant HP, electronics company Samsung and high-tech contract assembler Foxconn. While mobile phones tend to get smaller and thinner every season, cellphone giant Nokia is not losing much weight: US$ 46 billion in hardware revenues brought it to the 4th spot in the list.

Diversification
Roughly half of the companies in the hardware list also produce software, and two-thirds of the companies also offer IT services to their customers. Very large IT companies like HP, IBM, Cisco and Microsoft tend to have an all-round product palette, including hardware, software and services, although each has its specialties and its own accents.

Who actually makes PCs?
As the list shows, the hardware industry is not just a bunch of PC makers. In fact, most of the hardware companies don’t make PCs; they only produce certain components. An ordinary PC bought from the store may be composed of a processor from Intel (7th position), a DVD-player from Toshiba (6th position), a hard drive from Seagate (28), a graphics card from Nvidia (66th position), a mainboard from Asus (18) and memory from Kingston (63). The parts might have been assembled into a computer casing by Foxconn (3), and packaged with a printer from Canon (10), a mouse and keyboard from Logitech (84) and a screen from LG (8).
All the mentioned companies have specialised in delivering one or more components. A small minority of the companies actually sells full-fledged PCs. The largest PC makers (HP, Dell Acer and Lenovo) all rely heavily on a network of suppliers.

The main success factor: branding
Because IBM invented the PC to be an open system, every willing company can start making and selling components that fit in PCs around the world. Hence, margins are often razor-thin in the hardware industry, and competition can be very intense. Eventually, the companies that receive some kind of brand recognition from the public are the ones that succeed in making a profitable living from their produce. When people buy a brand they are less sensitive to pricing. Now you understand why Intel started putting that sticker on PCs years ago.

The rise of Asian hardware companies
During the last decade, the Taiwanese and Chinese suppliers and assemblers have looked at the profits made by the big Western brands that were often their customers, and they have boosted their branding efforts in order to get known themselves among the worldwide public. This has paid off handsomely for Asian companies such as Acer, BenQ, Samsung and LG. A low labour cost-base, and excellence in manufacturing will likely bring Asian companies higher up the ranks in coming years.

Software or hardware: where is the most money?
Clearly, the top 100 hardware companies are several times larger than the top 100 software companies in terms of revenues. Profit margins however, are substantially higher among software companies. Any choice would be an arbitrary one; there is a lot of money made in both industries.

The full list of largest hardware companies in the world can be found here. The Hardware Top 100 is a publication of the Top 100 Research Foundation. The list was made according to a methodology that can be found here.