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Software industry

Tech Giants Defy Economic Downturn, Boost Investment in Next-Generation Products

Strategic Insights

— 1 min read

Major global technology companies, despite a significant decline in electronics sales, are planning to invest heavily in developing next-generation products. At the recent Consumer Electronics Show (CES) in Las Vegas, companies like Microsoft, Intel, Sony, and Cisco emphasized the importance of innovation and research in overcoming the economic downturn. Despite the bleak sales forecast, these companies believe that investing in new technologies will not only drive growth for their own businesses but also stimulate consumer spending and drag the global economy out of recession.

Key Takeaways:

  • Major technology companies, including Microsoft, Intel, Sony, and Cisco, plan to invest heavily in research and development, despite a decline in electronics sales.
  • Research by MasterCard shows US electronics sales dropped 26% over Christmas compared to last year.
  • Analysts at iSuppli estimate LCD TV sales will drop by $2.6bn to $21.8bn (pounds 14.3bn) next year.
  • Only 5% of consumers plan to increase electronics spending this year, according to a survey by Forrester research.
  • Microsoft invested $8bn in research and development last year and plans to continue spending more than its competitors.
  • Software applications are expected to play a key role in driving growth, particularly in mobile devices.
  • Industry analysts believe that innovation will be the driving force in beating the recession.

Statistics:

  • 26% - Decline in US electronics sales over Christmas compared to last year (MasterCard research)
  • $2.6bn - Expected drop in LCD TV sales next year (iSuppli estimate)
  • $8bn - Microsoft's research and development investment last year
  • 5% - Proportion of consumers planning to increase electronics spending this year (Forrester research)
  • 130,000 - Number of attendees at the Consumer Electronics Show 2009
  • $172bn - Electronics industry revenue in 2008
  • $171bn - Conservative estimate of electronics industry revenue in 2009
  • 42 years - Duration of the Consumer Electronics Association's staging of the Las Vegas show
  • 25 - Number of Mobile Internet Devices (MIDs) powered by Intel chips

Sources:

  • MasterCard research
  • iSuppli estimate
  • Forrester research
  • Microsoft Corporation
  • Intel Corporation
  • Sony Corporation
  • Cisco Systems
  • Consumer Electronics Association

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