Technology industry fell into a landslide situation

Now that the U.S. economy has begun to gradually recover, the tech industry has, on the contrary, surprisingly fallen into a landslide.

According to the "Los Angeles Times" online edition, after the iPhone was introduced in 2007 by Apple in 2007 and stimulated six years of boom in the technology industry, today's technology industry is in an extraordinary position to change in the U.S. economy's recovery process Has become a "backward" behind.

Despite some bright spots in the tech industry, some companies, such as those that help other companies manage their data or offer cyber-security products, are still booming, but many of the largest companies in the industry are in trouble and have to Find out how businesses and individual consumers buy and use technology patterns that have changed. In these awkward technology giant, Microsoft, Google (microblogging), IBM and Dell, etc.

The past, the growth of the industry, "engine" impressively.

This situation has become so serious that there are even signs that the "dysfunction" of the technology industry is causing more widespread effects. When retail giant Wal-Mart posted disappointing quarterly results last Thursday, executives said the lack of exciting new products in the consumer electronics industry was one of the reasons for the poor performance.

It should be said that the technology industry has not yet reached the stage of the bubble burst, at least for the time being. In fact, what people can see on the land in Silicon Valley is that technology companies are still fiercely competing for talent.

But in recent months, tech companies have been showing signs of declining profits. Among the tech companies that have announced their earnings, many have slowed their growth or even turned into landslides. On the other hand, the venture capital so far absorbed by the technology industry so far this year has also dropped by nearly 7%, while mergers and acquisitions activities in the technology industry have also been faltered.

In the stock market, the performance of technology stocks also lagged behind the broader market. As of early August, the S & P 500 index was up 19.68%, while technology stocks in the index gained only 11.1%, making it one of the worst performing. While many are still optimistic about the long-term prospects of the tech industry, the industry itself is already "whispering" and wants to know if it is a temporary situation or has become a "new normal."

In the process of economic recovery in the United States, the science and technology industry has also unilaterally become a follower. Sheraz Mian, an analyst with Zacks Investment Research, said in a recent report: "The technology industry is still a big factor that has hindered the growth of the company's profitability, which is pretty bad."

It is incredible things to label the "drag-and-go" for the tech industry. So, why in the end the industry will lose their "magic"?

There appears to be more than one role as a "bad guy" in the fall of the tech industry. Mian pointed out that the bleak global economy is one of the reasons for the decline of the technology industry. Technology companies are relying more on overseas sales and profits, while corporate spending in overseas markets is still weak. In the US market, personal computer sales fell faster than expected, but also led to damage to the technology industry.

One of the reasons for the slump in PC sales is tablet PCs, but the tablet market is now in a dilemma, even as Apple iPad sales declined during the previous quarter. According to market research firm IDC data released in the second quarter, the global tablet shipments in the first quarter fell nearly 10%.

Of course, some big technology companies have been in trouble many years ago, such as BlackBerry, Nokia, Yahoo and Hewlett-Packard. In addition, Dell is facing a privatization deal led by its founder, Michael Dell, and private equity firm Silver Lake.

However, the slide of many other tech giants is surprising. In recent weeks, the financial performance of Oracle, Intel, NVIDIA and IBM have been disappointing, with IBM also said it will cut its workforce by up to 8,000. This summer, disappointing Google and Microsoft also posted disappointing earnings, a decline of $ 900 million due to sluggish Surface tablet sales. Apple's growth has also slowed down, but its share price is still rising sharply after the earnings announcement, in part because the company's performance is not as bad as many people fear.

According to data released by Zacks, in the first quarter and the second quarter of this year, the total profits of technology companies fell by 4.5% and 10.6% respectively over the same period of last year, which was the opposite of analysts' expectation. Thomson Reuters survey showed analysts in the average expected in January this year, second-quarter technology company profits will grow by 7.5%.

This industry is not only affected by the phenomenon of those giant technology, start-up companies have also been affected. According to statistics compiled by the National Venture Capital Association (NVCA) and Thomson Reuters, the total venture capital raised by technology start-ups in the first half of 2013 was $ 12.7 billion, down from $ 13.6 billion in the same period last year.

At the same time, tech companies have become rare on the market, and even mergers and acquisitions have suffered as well. In spite of the large number of listed companies in July, the total number of mergers and acquisitions in the technology sector has been substantially reduced to 240 from 341 in the same period last year.

In the past few months, technology giants have quietly lost their momentum; but by last week, the plight of the technology industry had entered the public eye.

Although the technology industry is facing a difficult financial situation, many companies believe they can not afford to reduce the costs associated with R & D spending and hiring activities. Oracle, for example, is transitioning its business from selling hardware, software and commercial applications to renting out those products through cloud services. In the cloud services arena, the competitive landscape is becoming increasingly fierce.

"We have been hiring more salespeople in the cloud services arena," said Larry Ellison, Oracle's chief executive, at a June earnings call.

In fact, the competition between technology giants such as Google, Apple, Facebook and Samsung has become too fierce that they have a hard time slowing down to invest in innovative activities.

The shift in the tech industry is more of an evolution than a revolution; in this situation everyone is looking for stimulating momentum. Something amazing will inspire another boom in the industry in the future, such as wearable computing devices, Internet-TV robot cars and Google Glass. At the same time, some in the tech industry would want to know the answer to one question as to how long these companies can retain their hires and investments if their revenues and profits continue to decline pace.