Information Technology

European IT service problems are structural

19 May 2005

Rising sales at the top three firms LogicaCMG, Atos Origin and Capgemini point to a welcome cyclical upturn for the beleaguered sector. But the industry still faces longterm structural challenges from new technology and third world programmers.

Apple can’t bear whispers

14 Apr 2005

The group s Q2 net income was 70% higher than what the company had predicted. Yet the group s shares were down. Looks like the most irritating boom time excess, whisper numbers, are back in play.

Carly Fiorina quits HP over strategy

9 Feb 2005

Walter Hewlett got it right. The Compaq merger was a mistake and Fiorina pegged her fortunes to it. The promised operational benefits from the deal never materialized. The stock languished. Value was destroyed.

US protectionism threatens IBM PC sale

24 Jan 2005

US regulators may block the purchase of IBM s PC operations by Chinese manufacturer Lenovo on national security grounds. This looks like straightforward protectionism.

Apple feeding off iPod

13 Jan 2005

Roaring sales of the US technology company s iconic music player are flowing through to its computer business. The group s market share for computers has risen for the first time since 2000. This trend looks set to continue.

Blackberry-maker squashed in court appeal

15 Dec 2004

Research In Motion, which makes the ubiquitous mobile phones, has lost a court case relating to a key patent. At best it will be forced to start paying royalties. At worst it could be barred from further US sales. Its stellar rating could be history.

Has IBM found a buyer for its PC business?

6 Dec 2004

The US technology company is in talks to sell its PC business to Lenovo, a Chinese computer company for $1bn$2bn. But it is hard to see where Lenovo will find the money. A joint venture may be the way forward.

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.