Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: Bill Harmond who wrote (26445)	11/26/2005 11:28:01 PM
From: Elroy	Read Replies (2) \| Respond to of 57684

Well I retraced what produced this line of discussion, and the source was my surprise that some here now think tech is about to "take off" and we are on the verge of a prolonged expansion in tech. My thoughts were the opposite, that tech was in a pause in 2005, going virtually nowhere, and now the more likely trajectory for 2006 is down rather than up. My rationale was that over half the largest tech companies in the US (IBM, CSCO, DELL, LXK, NTAP, etc.) modestly lowered their forward revenue guidance in 2005, and a continuation of that pattern (modestly lowering rather than modestly raising) seems likely to me. Only handsets didn't slow in 2005. With the largest tech companies' growth rate decelerating, I'm inclined to be bearish on tech rather than bullish. So Lizzie points out that Google is "lighting a fire" under tech, implying that somehow GOOG in 2006 is going to reverse the revenue deceleration trend of 2005. My response was that's crazy, because GOOG has virtually nothing to do with the largest technology companies in the US (IBM, ORCL, MSFT, INTC, DELL, etc). GOOG can be a fine high growth company on its own, and benefit from the transition of ad sales from traditional media to the internet, but that's a unique story, and not a case for expansion in the total technology. Then you started going into this tech guru talk about "smartphones" and "rich media" and other stuff that also has little to do with the general tech industry. All that nwe blah blah can be totally accurate, but unless it drives more PC, cell phone, semiconductor, printer, software and/or IT services sales, it is NOT going to light a fire in the tech industry. It's going to be an isolated growth segment that is tangential to the tech industry, and probably just make the normal tech industry jealous.