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Canada's computer market is the eighth largest in the world, and approximately 60 percent of Canada's information technology demand is supplied by imports. The computer and peripherals equipment industry in Canada manufactures a wide range of products used in various computing applications, including computer systems, peripheral equipment, computer storage equipment and devices, loaded computer-processor boards, unpacked computer subsystems, and computer terminals.
Comprised of approximately 300 manufacturers, the Canadian computer and peripheral industry employs an estimated 14,000 people. Canada, with a population of only 30 million, is ranked sixth in the world for the number of installed PCs and is ranked second in the world in the number of PCs per capita. The downsizing of platforms from mainframes to client/server systems has created a surge in microcomputer sales to Canadian corporations as well as to small-office-home-offices (SOHO) and personal use consumers. Exceptional demand in the home market for fully configured PCs is also a key factor in the growth of the Canadian microcomputer market.
The Canadian microcomputer market was valued at US$2,737 million in 1996. In 1997, microcomputer sales totaled US$2,941 million and are projected to grow in 1998 by a real rate of 4.6 percent, reaching an estimated US$3,161 million. Projected microcomputer real market growth of 6-7 percent per year is forecast during the period 1999-2000. Sharply declining prices and resulting affordability of microcomputers, improved product performance, and emerging technologies such as the Internet, e-commerce, and LAN-based client server products all contribute to healthy growth in the Canadian microcomputer market. This growth is fueled by Canadian corporations' need to compete effectively and efficiently in the global marketplace and Canadian households making increased use of computers in their daily lives.
According to the World Competitiveness Year Book, Canada ranks fourth in the world based on the number of computers per capita. According to Industry Canada, there are more than 2.5 million self-employed Canadians. Industry Canada also states that of the nearly 580,000 jobs created between the second quarter of 1996 and the second quarter of 1997, 46 percent or 262,000 were created by companies with fewer than 50 employees. Microsoft Canada estimates that there are approximately 3 million small businesses in Canada, defined as companies having between one and 50 PCs. Microsoft Canada also estimates that about 2 million of these have fewer than five PCs. Because of the great numbers and diversity of small businesses in Canada, segmenting the market and identifying their needs is very difficult.
According to AC Neilsen's fourth annual Home PC and Entertainment Study, 54 percent of Canadian homes have at least one computer. While this represents one of the highest per capita PC penetration rates in the world, there are still great opportunities in this subsector of the Canadian microcomputer market.