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Tech meltdown hits some harder than others
The Associated Press
7:28 PM EST January 22, 2009
The economic recession is hurting every industry, and technology is no
exception - big names like Microsoft Corp., Intel Corp. and Dell Inc.
have had layoffs as they try to cut costs and stay competitive amid
declining sales.
But the effects of the meltdown haven't been spread evenly across the
sector - even within companies, sales of certain products may fall while
others are more resilient. It seems that the health of tech companies
has a lot to do with what they sell, and who their customers are."It's
definitely a mixed and complicated picture here," Forrester Research
analyst Andy Bartels said.
Here are some questions and answers about how the tech industry is
weathering the financial crisis.
Q: How is this recession different for tech companies than the last one?
A: The 2001 recession stemmed in large part from the bursting of the
tech industry bubble. This time around, the industry has been caught up
in the downturn but is not a major cause - areas like housing and
banking are taking much of the blame.
Another difference: Nowadays, products like MP3 players and cell phones
are more integrated than ever into consumers' everyday lives, and
software and computers are increasingly intertwined with companies'
operating needs.
Q: How are companies that sell things like cell phones and computers
being affected thus far?
A: Retail sales, both on and off the Web, have been slowing as consumers
put off buying new things - electronics included. According to The NPD
Group, U.S. holiday sales of electronics and computers dropped 5.7
percent compared with last year.
This drop-off in spending hurt companies from Intel, which is seeing
less demand for its computer chips as PC sales drop, to Nokia Corp.,
which said the number of cell phones it shipped during the fourth
quarter dropped 15 percent from the year-ago quarter.
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The Associated Press
7:28 PM EST January 22, 2009
The economic recession is hurting every industry, and technology is no
exception - big names like Microsoft Corp., Intel Corp. and Dell Inc.
have had layoffs as they try to cut costs and stay competitive amid
declining sales.
But the effects of the meltdown haven't been spread evenly across the
sector - even within companies, sales of certain products may fall while
others are more resilient. It seems that the health of tech companies
has a lot to do with what they sell, and who their customers are."It's
definitely a mixed and complicated picture here," Forrester Research
analyst Andy Bartels said.
Here are some questions and answers about how the tech industry is
weathering the financial crisis.
Q: How is this recession different for tech companies than the last one?
A: The 2001 recession stemmed in large part from the bursting of the
tech industry bubble. This time around, the industry has been caught up
in the downturn but is not a major cause - areas like housing and
banking are taking much of the blame.
Another difference: Nowadays, products like MP3 players and cell phones
are more integrated than ever into consumers' everyday lives, and
software and computers are increasingly intertwined with companies'
operating needs.
Q: How are companies that sell things like cell phones and computers
being affected thus far?
A: Retail sales, both on and off the Web, have been slowing as consumers
put off buying new things - electronics included. According to The NPD
Group, U.S. holiday sales of electronics and computers dropped 5.7
percent compared with last year.
This drop-off in spending hurt companies from Intel, which is seeing
less demand for its computer chips as PC sales drop, to Nokia Corp.,
which said the number of cell phones it shipped during the fourth
quarter dropped 15 percent from the year-ago quarter.
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© 2008 Microsoft
I am Proteus