Meet tech's biggest losers of 2010

TOI Tech

While the year 2009 saw most companies trying to cope up with the slowdown pressures, 2010 was not very different as they struggled to come out of economic doldrums. Though the markets saw a little upswing in consumer and corporate spending, it still didn't see those highs of pre-recession era.

This dealt a severe blow on the market cap of some of the world's biggest technology companies who struggled to roll out new products amid fears of a looming second recession and global downslide.

As the year comes to a close, The Bloor Group's website 'The Virtual Circle' has put out a list of five biggest technology losers of 2010 based on the market cap as the measurement tool. Here are some of the reasons why these top notch tech brands probably took a beating in the market cap.


Adobe

Topping the list of biggest losers of 2010 is multimedia software maker Adobe Inc with its market cap declining almost 18.03%.

According to the Virtual Circle report, despite Adobe's products including Photoshop, In Design, Acrobat and Dreamweaver getting good returns for the company, Adobe Flash missing from Apple's iconic products has been a severe blow to the company.

Apple CEO Steve Jobs had banished Adobe's Flash video software from his company's iPhone and iPad, calling it unreliable and ill-suited for mobile devices. Once a close ally, Microsoft too joined hands with arch rival Apple in criticising Adobe's widely used Flash software.


Hewlett-Packard

At No. 2 is computer manufacturer Hewlett-Packard with its market cap also declining around the same levels at 18.03% in the year 2010. The company has revenues of around $130 billion and is valued at mere $94 billion.

HP's year was marred by unceremonious exit of CEO Mark Hurd after the company accused him of filing false expense reports to hide a relationship with a female marketing contractor. This year, the company also suffered a major setback as the tablet market popularised by Apple's iPad made a dent in the computer and netbook market.

Analysts were also skeptical if the company could really make something out of its $1.2 billion acquisition of Palm Inc in an emerging smartphone market already dominated by Apple, BlackBerry and Nokia.

The report further points that HP's software division too looks pale, having failed to make a success of the Mercury and OpsWare acquisitions. Recently, the company also revealed that the US authorities have been conducting a probe to find whether current and former employees of Hewlett-Packard paid kickbacks in certain transactions spanning several European countries.

The company's offices in Moscow were raided this year over allegations that HP executives have been offering bribes in return for lucrative government IT contracts. This further knocked the IT behemoth's share price.

Cisco


Networking giant Cisco is the third biggest loser of 2010. The company's market cap declined 18%. Cisco boast of annual revenues of around $40 billion and its market cap is double that amount at $108 billion.

The company's dominance in the data center networking space was challenged by HP after it bought network equipment maker 3Com for around $3 billion. HP is also pitching itself as a low-cost option to Cisco customers.

Recently, HP said it will offer customers 20% off list prices for its A-Series and E-Series switches if they trade in Cisco switches from eligible product lines, including the Catalyst and Nexus series. The report also states that in the past 5 years Cisco's revenue growth has been sluggish, averaging about 8%.

Microsoft

Next on the list of biggest tech losers is software behemoth Microsoft with its market cap declining nearly 8.20%. The company suffered a major jolt this year as Apple, with its soaring market cap, left Microsoft behind for the first time in past two decades.

The world's No. 1 software maker, which launched its touchscreen operating system Windows 7 this year after the failed Vista, is struggling to keep pace with Apple iPhone and Google Android in the cellphone space. The company pulled the plug on its Kin smartphones this year and had launched its new mobile operating system Windows Phone 7 in a bid to revive its fortunes in the mobile market.

However, if media reports are to be believed, Windows Phone 7 is not matching up to its rivals in terms of interface and features.

In the tablet space, Microsoft is also said to be working on a version of its core Windows operating system to take on Apple iPad and other Android devices.

AMD

At No. 5 position is world's number two PC microprocessors maker Advanced Micro Devices (AMD) with 7.25% fall in its market cap.

The company sometime back was rumoured to be on sale after its CEO Dirk Meyer said that "we are happy to listen to any proposal which is in the interest of our shareholders."

His remarks followed after Larry Ellison, CEO of Oracle, said that his firm is keen to make more acquisitions to bolster its technology and a microchip company could be a good fit. In September, AMD lowered its third-quarter outlook blaming weaker-than-expected demand particularly in consumer laptops in Western Europe and North America.

AMD had then said its revenue should fall 1% to 4$ from the second quarter's $1.65 billion. That translates to a drop ranging between $1.58 billion to $1.63 billion.

Source: timesofindia.indiatimes