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Dot-Com Bubble Burst 2.0 - Intel, Microsoft Squeezed by $170B Budget Cuts |
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| Tue, October 14 2008 | 1:35PM | PermaLink |
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"Intel Corp., Microsoft Corp. and the technology companies that so far have escaped the credit crisis relatively unscathed will lose out on as much as $170 billion in sales next year as the crunch catches up with them.
Corporate spending on computers, software and communications equipment may be little changed or fall as much as 5 percent next year as the lending freeze spooks clients, said Jane Snorek, an analyst at First American Funds in Minneapolis who has followed the industry for 13 years. It would be the first decline in the $3.41 trillion market since 2001 after the dot-com bubble burst.
``Business kind of stopped dead in the last two weeks,' said Snorek, whose firm owns Microsoft and Intel stock among more than $100 billion in assets. ``People are pushing off orders and saying, `I have no idea if we're going to have a global meltdown, so I'm not going to buy anything right now.'
While consumer spending growth slowed this year as the economy slumped, corporate budgets stayed fairly constant until now. Snorek said the collapse of financial-services customers, who account for a quarter of technology outlays, and a subsequent surge in interest rates persuaded clients to pare back."
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