iEntry 10th Anniversary
Technology
Contact UsThe first quarter of 2009 is behind us. The usual spate of bad news has continued to pour from the press, but amidst the national jeremiad are some unsung melodies of success. Those unsung melodies of success intonate from the technology sector. Here is one encouraging example.
Intel, the mammoth semiconductor corporation, claims over 80% of the PC microprocessor market. Last year, when the government started bailing out everyone from homeowners to carmakers to banks, the technology sector became strangely quiet. Although the recession put the kibosh on high PC sales, Intel saw a profit in the first quarter of 2009. This earning was directly contrary to the projections by Wall Street gurus, who claimed that PC purchasing was essentially dead for the remainder of 2009.
But there is the rub. Analysts aren’t sure whether Intel got a boost from an increase in PC sales or whether their boost is coming from manufacturers who need more chips. On the one hand, it is nearly shocking that consumers would go back to buying PCs since the fear of the Great Recession is so fresh. Yet savvy consumers are being drawn to the low-cost netbook, which seems an ideal replacement for the higher-dollar PCs they were accustomed to buying. So, maybe it’s true. Maybe consumers are buying computers.
There is another possible explanation for Intel’s Q1 profit. In a recession, manufacturing firms allow inventories to run low in order to save cash. It is all part of the customary undulations of the manufacturing industry. Now that the big scare is past, computer makers may be restocking their inventory, and purchasing more microprocessor chips to do so.
Either way, Intel’s got something going on-profit. It is a something that ought to breathe a bit of optimism into the technology sector as a whole. All is not doom and gloom.