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

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In short, everything you thought you knew about the shape of the new tech world is going out of date faster than you can actually register it.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.