TAG | US bailout failure hits consumer-oriented tech stocks hardest |
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| by Stephen Withers | |
| Tuesday, 30 September 2008 | |
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Page 3 of 3 On the other hand, Apple is much more dependent on consumer spending. It takes a significant share of retail computer sales in the US, and if times are tough an obvious place to save some money is to put off buying a new Mac, iPod or iPhone.Featured Whitepaper
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Whether any fall in sales will be sufficient to justify writing down Apple's market capitalisation by some $US20 billion remains to be seen. And as for Google, that company is heavily reliant on advertising revenue. Advertising is one of the first expenses that businesses tend to pare when trouble is looming, and I saw this happen in Australia in the early 1990s ahead of the "recession we had to have." There is already anecdotal evidence of a downturn in Internet advertising, so Google could be facing an environment that's quite different to what it is used to. Analysts note that the big tech companies generally have large cash reserves and little or no debt, so they should be well-placed to ride out the storm. One described Internet stocks as "The cockroaches of this particular nuclear winter" according to Reuters. Google as a cockroach? Now there's an idea for a Google doodle! |
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