International Tech Funds
So where are the bright spots in the tech stock market, and where
are the pitfalls?
Though it’s hard to generalise, there seem to be growing
doubts about the hardware end of the industry and fewer worries
about the services end. IBM, Apple and the failed satellite telecommunications
systems Iridium and Ionica, are just a few examples of the companies
that have been struggling with slowing demand recently. Dell Computers
has been taking a wall of criticism over founder Michael Dell’s
decision to sell off his own equity stake, little by little.
International Tech Funds & Telecommunications
There have been a few uncertainties in the telecommunications
market, for reasons that probably take more explanation than we have
room for here. Some of the world’s most important telecoms companies
- AT&T, Deutsche Telekom, British Telecom and Japan’s NTT
- have been experiencing pangs of investor uncertainty that have shifted
them from their usual place in the blue-chip pantheon to the riskier
fringes of the investment scene.
The trouble is that their power has been built, with few exceptions,
on their existing hardware systems (the cables, fibre-optics, telephone
exchanges and routing computers) that most people regard as essential
to the functioning of a modern communications system. But the rapid
emergence of next-generation wireless systems has placed a big question
mark over the actual relevance of these expensive infrastructures
to tomorrow’s public. In many parts of the world, especially
in East Asia and Eastern Europe, whole countries have moved seamlessly
from no-telephone to mobile-telephone status, and the names that
are driving the trend are new and frighteningly unfamiliar.
International Tech Funds - Media
In many cases, media companies are making all the running. The writing
went up on the wall last year when the Time Warner broadcasting and
leisure group bought America On Line (AOL), the world’s biggest
internet service provider. It continued this year with an aggressive
move into multimedia on the part of Rupert Murdoch’s News International
and Sky Broadcasting systems, and by the German publisher Bertelsmann’s
extensive forays into new media. The Disney Corporation is just one
of the giants currently trying to snap up a chunk of the new broadband
technology. In short, everything you thought you knew about
the shape of the new tech world is going out of date faster
than you can actually register it. For the moment, it looks
as though the larger and more traditional media groups are simply
buying up the market share that they’ll need to compete
with each other in five years’ time - which is fine for
small service providers (and their investors) as long as they
don’t feel a need to make the big time themselves.
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