People are used to dips in the technology industry, but there’s something about this particular dip that’s extra-scary. In the past, a softening of the market meant that manufacturers and developers had to scale back a bit on production and possibly lay off some people.
That’s happening this time around, but take a look at company statements. Some of these companies are retooling their operations and overhauling fundamental services. Oracle, for example, is considering ditching its core data management offering. RIM is struggling not because it can’t make phones but because it lost 4 million subscribers. Its earnings just can’t recuperate.
And then there’s HP. Oh HP, the company everyone loves to rag on. The largest maker of PCs and printers just closed its working site in Germany earlier this year. The company needs to restructure its enterprise service business which accounts for a full 25 per cent of its total sales – ouch.
This is very serious. Even EA (Electronic Arts) is feeling the pinch from, of all things, free online games that are competing with its own product line. The company is facing serious pressure from the industry which is predicting free online games will start to generate 1/3rd of all world-wide gaming revenue.
Will the tech industry bounce back? And, even if or when it does, what will it look like?
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