patrick.net

They are going to cut jobs in the U.S. and outsource those jobs to India.

I agree this is the long term trend, but supposedly things were looking up for tech earlier this year.

Tech is not going a way, companies will always ware out their welcome.
It's just the trappings of being a publicly traded company. You are expected to earn every quarter and produce. Often at the detriment of the quality of your brand. Just putting out cheap crap for the sake of putting out cheap crap for the populous.

Have you seen the quality of Hewlett-Packard lately?

I don't think this is a long term trend, tech will always be apart of our productivity, companies will come and go. I envision the day of Google's demise, that day will come.

When it comes to tech, you gotta stay out on the edge, and never gauge the market by the losers.

Tech is tanking because the economy as a whole is not doing well. We have what is called the recoveryless recovery.

Electronic and computers are very much subject to economic laws of gravity.

Electronics have never been cheaper, you can get an electronic computing device, that has more than enough computing power to send Apollo 11 to the moon, for cheaper than a single bag of groceries.

Tenouncetrout says

When it comes to tech, you gotta stay out on the edge, and never gauge the market by the losers.

But who are the real winners right now? Amazon? Dell? RenRen?

And what happens when China really gooses their other competitor clone sites?

Apple, Microsoft, Google they are still giants and doing great.

This whole outsourcing is stealing our jobs needs to be put into perspective. Here is a quick and dirty article outlining whats expected. http://www.mackinac.org/6822

From 2003 to 2015 it's expected 3.4 million jobs will be lost, our of about 138 million jobs in the US. Or about 300K per year. Or put another way, 25,000 jobs per month. How many jobs do we need to create per month to get back up out of this recession? Or how many were laid off each month? 25,000 jobs a month is nothing but a drop in the bucket, as more and more jobs are needed.

If no one has experience using out sourcing, they really have no idea what it costs and the productivity losses they're going to experience over all. Huge companies, like GE, IBM, INTEL can setup large centers and hire managers and everything else required.

Smaller companies can't do that. They can contract out to a company, they end up hiring someone, then they need local managers, then they need to pay the contracting company extra of course, like any good contractor. In the end the savings aren't massive. Especially not for the first couple of years while you "learn" how to utilize these outsourced poeple.

Then top it off with the traditional 3 month turn around time for each employee,or you're training a new employee every 3 months or so. How long does it take to train someone new? How much extra time needs to be spent there?

People think outsourcing the bane of all IT types of outsourcing, it's a drop in the bucket at best.

Apple, MS, Google, HP and Dell all reported respectable numbers. Perhaps they didn't blow the doors off their expectations, but they also didn't come in at like 40% below expectations or "massive losses with massive layoffs required"

Remove the sensationalism and simply look at the raw numbers.

pkennedy says

25,000 jobs a month is nothing but a drop in the bucket, as more and more jobs are needed.

It's about 10% of what is added per month these days... and who exactly sponsors the Mackinac center? They claim to be non-partisan but what is their mission?

pkennedy says

Apple, MS, Google, HP and Dell all reported respectable numbers.

Do you mean for Q1? How do you think they will do in Q2 and Q3?

quesera says

Microsoft and Google are making tons of revenue and profit, but MSFT and GOOG have been pretty uninteresting lately. There are some smart people who think MSFT (and also CSCO, for similar reasons) is tremendously underpriced right now.

Thats what I see too, tremendous revenue. It will eventually make the stock price go up since they are expected to make bank.

An average person isn't willing to invest now and hence will lose out once these companies start to grow.

ChrisLA says

An average person isn’t willing to invest now and hence will lose out once these companies start to grow.

As MSFT and CSCO "Start to Grow"!? Where in the hell have you been for the last 30 years?

Tenouncetrout says

As MSFT and CSCO “Start to Grow”!? Where in the hell have you been for the last 30 years?

Been holding for the past x years. They have been very stagnant in the last few years, but I'm still waiting.

As much as I think Ballmer is a charlatan, I think MSFT deserves more love for their performance in the last ten years. They've done quite well, but the stock price doesn't reflect it. Maybe they were overpriced ten years ago, and their complete price stagnation in the interim was just perfectly expressed in market realignment.

I don't think so. I think they're out of fashion and suffering. They might need to change CEOs just to become fashionable again. Ballmer doesn't project the kind of forward-thinking image that a tech company needs to sustain tech industry multiples...

Whom would you hire? Let's assume that Steve Jobs isn't interested. :)

MSFT is facing a future of being irrelevant.

Win32 was a beautiful platform lock, but the company is losing all platform locks as HTML finally abstracts away the OS and API stack.

Google's netbook is the future.

Troy says

MSFT is facing a future of being irrelevant.

Agreed.

pkennedy says

Apple, MS, Google, HP and Dell all reported respectable numbers. Perhaps they didn’t blow the doors off their expectations, but they also didn’t come in at like 40% below expectations or “massive losses with massive layoffs required”

Massive layoffs are not required... yet. Friday's BL&S regional and state employment/unemployment report should give some insight into where things are headed on this front.

The ipad and iphone are going to face increasing competition from cheaper and more sophisticated gadgets from here on out. Maybe Apple will again i-design something new to save their butts, but who knows what the future holds... Consider what will happen to Apple stock when the first post-Steve Jobs product flops big time!

Troy says

MSFT is facing a future of being irrelevant.
Win32 was a beautiful platform lock, but the company is losing all platform locks as HTML finally abstracts away the OS and API stack.
Google’s netbook is the future.
“Nessuna soluzione . . . nessun problema!„

The biggest Irony of all, is Bill Gates Championed the very thing that will ultimately kill "Windows".

But lets face it, Microsoft cries foul, and the investors can say they aren't making money. But Microsoft isn't going anywhere. Their Servers from Mail, to Database and Office suites, or everything they do on the Enterprise, will keep them around long after Microsoft on the consumer PC is distant memory.

Well I say everything in the Office, but the truth is Microsoft's investments in OPP is what is killing them. Like Dynamics, and trying to compete with B2B and Document sharing. Biztalk and Sharepoit for example.

I think Micrsoft needs to get back to basic, and focus on their Virtual Servers, Office products, Mail server, SQL server, Development tools, Net OS, things they do well. And stop with the trying to be the end all to end all can integrate into anything everywhere anytime sloppy architecture and stop trying to reinvent XML, and use the standard that already exists. They would do much better.

They should leave all of the bridging and gaping technology up to the developers that depends and could use those jobs.

More like they were in 2000, it was the Devlopers creating the solutions for the corporations, using Microsoft development tools, that keep them in the enterprise and Microsoft orders coming.
The more we did the more servers the companies needed.

Then Microsoft tried to buy up all of the failed business tools that over promised and never delivered. That psuedo tech savvy business people could replace room full of developers, using tools like Biztalk and Sharepoint.

He promised companies the moon, yet, just to skin a Sharepoint site, you have to register GUID, and write and create libraries for it, things that are way beyond most developers let alone business people.

They lied to Corporate America and threw the Developers under the bus, over promised and grossly under delivered.

They are still half baking technology not ready for prime time.

When Microsoft does a few things they do it very very well, when they try to do everything, they do it all very half assed.

The biggest thing they have going in their favor is,
this is the age Half Assery, they just have to be the best Half Assed tech company out there, and they are in like Flyn.

Apple already has competition on all fronts, phones, computers, tablets, etc, but they excel at all of them.

Take tablets---while the competitors are catching up to iPad first gen, Apple has its second, and more iterations in the pipeline.

Plus, a mature application distribution system that the others are working on, but you can't create the developers or the demand overnight.

I think their early lead gives them a leg up, while the laptop, mini and Appletv lines have been under-appreciated in the past, but that too is changing. So, in these spaces Apple has the potential to take a bigger chunk away from MSFT or even Dell.

Now, regarding HP..their servers are still good, and their switch offerings were brilliant. They offer lifetime warranties without the smartnet nonsense of Cisco, and decent fabrics, 10GB, nice fabric.

So the question is, is HPQ a buy now that its stock has tanked? Or do we need Mark Hurd back? :)

I think Carly went and got her old job back as a Kelly Girl. :)

CL says

Apple already has competition on all fronts, phones, computers, tablets, etc, but they excel at all of them.

Take tablets—while the competitors are catching up to iPad first gen, Apple has its second, and more iterations in the pipeline.

Plus, a mature application distribution system that the others are working on, but you can’t create the developers or the demand overnight.

I think their early lead gives them a leg up, while the laptop, mini and Appletv lines have been under-appreciated in the past, but that too is changing. So, in these spaces Apple has the potential to take a bigger chunk away from MSFT or even Dell.

With all due respect, while I agree that Apple does excel at most of the areas that you mentioned, for now, they have a monolithic, proprietary philosophy. I believe it will be their undoing, just as it was for microsoft and AOL (relatively speaking of course). It's really the actual innovators (people) that matter in this game, long term.

zamagent says

With all due respect, while I agree that Apple does excel at most of the areas that you mentioned, for now, they have a monolithic, proprietary philosophy. I believe it will be their undoing, just as it was for microsoft and AOL (relatively speaking of course). It’s really the actual innovators (people) that matter in this game, long term.

Ya know though? People don't mind proprietary stuff if it's good. When one has an ATV, iPhone, iPad and iPod along with the Airport Express and Time Capsules, the stuff just works and it works great.

If you choose the items piecemeal, or get a knockoff, it works but there are things that don't work well together.

They own multimedia right now, and they've innovated in ways that most users don't even realize they need yet, like Airplay.

It's the same reason the world uses Windows + Exchange + Office and there still hasn't been a revolt (and one could argue that the MSFT combo isn't even that good!)

@terriDeaner

You would have thought all the MP3 players would have decimated apples sales from day one. There were lots of them out there. There are lots of clones out there now.

Same with their laptops. You can get a better unit for far less.

Surprisingly, people keep buying them.

Their tablets will not be the cheapest, nor will be the only ones in town, but I"m betting they do very well for the next couple of years off them because people will throw down lots of money for them.

They make hundreds of dollars of profit. They only need to make a small fraction of the sales of other competitors to still make HUGE amounts of money.

Microsoft is in the commodities game. Cisco used to have this huge moat, but it's gone. It used to be you bought Cisco when you bought routing equipment. Then harder times came, and slowly others made inroads through price, until they made enough inroads that others would actually buy their competitors products for a fraction of the price and feel comfortable doing so. Lots of these companies are entering into commodity area, which isn't a great place to be. Apple isn't for sure!

a lot of stocks tanked today. They'll be back up by Tuesday with profit.

ChrisLA says

a lot of stocks tanked today. They’ll be back up by Tuesday with profit.

I'd keep an eye on what's happening in Europe - that's partly what spooked the market today. Plus, there is bound to be some pre-post-QE2 profit-taking over the next few weeks, I suspect.