Information Technology

Dell success more Tesco than technology

12 Nov 2004

It's time to start thinking of computers as undifferentiated consumer goods. Success comes from quick turnover and selling cheap. Like the successful UK grocer, Dell has entered a virtuous circle of increasing profits via scale and costcutting.

Nortel enters last chance saloon with latest results delay

28 Oct 2004

The telecom equipment maker's accounting problems are verging on the surreal. It has now gone for 15 quarters without reliable figures. Nortel's creditors have held off pitching it into default so far. But if this continues much longer, their patience is likely to snap.

Nanosys pulls IPO

5 Aug 2004

The market has come to the right decision. The US nanotech company had no business being public. The failure throws a welcome glass of cold water on the overheated nanotech sector.

Motorola pushes Freescale out the door

19 Jul 2004

The float of the US company s chip division fetched a third less than had been hoped. But even this was far too much.

Apple finding it harder to profit from iPod

15 Jul 2004

Consumers bought more iPods, the iconic digital music players. But revenues from these sales fell compared to last quarter. It is a good example of just how hard it is to make a buck on consumer electronics.

Intel sets stage for another tech blow-up

14 Jul 2004

The chip giant reported its highest inventory levels in nearly a decade. And stockpiles are growing throughout the sector. These excesses will have to be worked off. Margins look set to plummet.

Atos Origin makes hash of Sema acquisition

14 May 2004

The French IT services transformed itself when it bought Sema. Trouble is, it turned into a turkey. The group now says goodwill from the acquisition is E1.4bn. The original purchase price was E1.3bn. The group now says goodwill from the acquisition is E1.4bn. The original announced price for Sema was E1.3bn.

Infineon considers disposal of memory chips

13 May 2004

Even as the thirdlargest producer of memory chips, the group has not made consistent profits. Now is a good time to exit. Its remaining businesses are higher margin, more stable and require less capital. Separating them out should unlock value.

Price rise may signal end of the chip cycle

6 Apr 2004

The prices of semiconductors have risen sharply over the months, as demand for electronic goods takes off. But chip company stocks already trade at peak multiples. And rising prices usually occur shortly before a bust.

Virus upsurge threatens Microsoft

2 Mar 2004

Because it has ninetenths of the market, the software company is a prime target for every hacker and email evildoer. If the number of viruses continues to increase, Microsoft will ultimately suffer.

IBM issues out-of-money options

25 Feb 2004

For a US first, it's a step in the right direction. But the stock need only rise 10% or more for executives to cash in. A better alignment of management and stockholder interests would see the rewards linked to IBM s outperformance against rivals.

IBM’s earnings rise 42%

15 Jan 2004

The weak dollar juiced IBM earnings in the fourth quarter. Demand still looks weak, but the tech cycle's progress will help the company s service and software divisions.

iPod breaks free from Apple history

15 Jan 2004

The computer company has a history of seeing others profit from its ideas but it looks set to break this with iPod. Apple s dominance of online music sales ensures there will be a ready stream of iPod buyers.

Accounting change could lead to tech merger rush

2 Jan 2004

Proposed US rules make tech and biotech mergers less appealing after December 2004. Acquired R&D can no longer be written down so acquisitive companies will report lower earnings and returns on equity.

Tech set for revival – for some

11 Dec 2003

Technology demand from businesses is perking up. But the New Year's presents may not be evenly distributed. While hardware and software companies can anticipate cash, it looks like nothing but coal for IT services.

Cisco revenue increase feeds telecom bulls’ hopes

6 Nov 2003

John Chambers, CEO of the US telecoms equipment maker, is now more optimistic But the stock s price is still absurd, even with a massive share buyback plan continuing.

STMicroelectronics starts investing for the upturn

23 Oct 2003

The FrenchItalian chipmaker is raising capital expenditure by a third to revamp production facilities. This looks bullish, but is it premature? Chip sales may be going up but margins aren't.

LogicaCMG reaps merger benefits

3 Sep 2003

The AngloDutch IT services group has cut costs admirably, defending its margins from the downturn. But it has produced precious little evidence to suggest revenues can rebound. That must come soon to support its share price.

Tech stocks price in too much growth

22 Aug 2003

Can tech stocks grow annual earnings 12 percentage points faster than the general market over the next four years? That is what it would take to justify their relative price/earnings rating.

Infineon sticks snout back in trough

30 Apr 2003

The German chipmaker is raising capital for the third time in two years despite not obviously needing the money. Infineon has taken a sceptical view of the economy and the rally in markets. Other technology firms should take note.